Upstart Upstart
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Upstart Review

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Rating:
Bottom Line:
Evaluation of academic, credit and work histories makes this a great choice for recent grads or students starting a business; strong customer service

Full Review:
Founded by former Google employees and based in Silicon Valley, Upstart's tagline is, "You are more than your credit score." This personal loan service sets itself apart from its competition by considering academic performance as well as an applicant's financial information and employment history. For students or recent graduates looking to take out a loan for their new business, Upstart could be the best option against using a bank or even other personal loan services.


Types of Loans Available

Entrepreneurs who take out a loan from Upstart for their business are taking a personal loan for business use, not a business loan. This means the individual will be held financially responsible — not their business. Loans are unsecured and fixed rate, and you can borrow between $1,000 and $50,000; however, if you live in Ohio or Massachusetts, your borrowing rates will be different. The minimum loan for residents of these two states is $6,000 for Ohio and $7,000 for Massachusetts. Potential APRs range from 7.39% to 29.99%, and they are determined based on the loan grade an applicant is assigned.

Loan grades are AAA to D, with AAA being reserved for applicants with the highest qualifications. Upstart evaluates a variety of personal and financial information that borrowers provide during the application process to determine what grade to assign.


Qualifying

To qualify for a loan from Upstart, borrowers must be a U.S. citizen or permanent resident currently living in the U.S. and at least 18 years old with a verifiable name, birth date and social security number. You must have a valid email address and a U.S. bank account, as well as a minimum personal credit score of 620 or higher. Additionally, you are required to have one or more of the following: a full-time job, a full-time job offer starting in at least six months, a regular part-time job or another source of regular income.


Most forms of income — including job wages, rental property income, trust fund disbursements, pension and social security payments — are considered personal income by Upstart. However, any other type of earnings will not be considered. A full list of qualifying criteria is available on Upstart's FAQS, so you can check if you aren't sure whether the money you earn will count.

Upstart's commitment to its tagline is evident in its evaluation of your academic records if you are applying within four years of graduating from college. The academic records required are standardized test scores (SAT and/or ACT) as well as your transcripts. Applicants attending a business or law school do not need to supply their SAT/ACT test scores. While unorthodox, the consideration of academic performance can certainly be helpful to young business owners fresh out of school (or still working towards a degree) — most of whom don't have a lot of credit built up or work history to help them qualify for a loan.


Application Process

Similar to other personal and business loan services, Upstart's application process is simple and can be completed online in minutes. You begin by checking your rate, which doesn't affect your credit score. You will be asked to select the purpose for your loan ("start or expand a business"), indicate how much you want to borrow and provide some personal information. This includes your education level and details (such as where you went to school and your area of study), employment status, any sources of income outside your job, personal details like your name, address, whether you rent or own (and how much you pay on rent/mortgage payments every month), how many dependents you have and the amount of money in your savings or investment accounts, if applicable.


Once you've provided all the necessary information, you can see whether you qualify and what kind of rate Upstart can offer you. If qualified, you can continue with the application process, which includes providing additional information and documents to determine whether you can be approved for a loan or not. Once approved, you will be asked to sign an online acceptance form and then the loan funds will be disbursed to your bank account within a few days. According to Upstart, if you accept your loan by 5 p.m. ET on a weekday, you can expect to receive your funds by the next day.

If you do not qualify for a loan, Upstart will tell you immediately, and it might suggest you try one of its partner services. If at any time during the qualification or application process you are denied, Upstart will send a message to your email as well as post to your account the details why and provide your credit score on the date of your application. You are encouraged to reapply if your situation changes, and you can even authorize Upstart to obtain your credit information once a month to check whether you qualify — something the service promises won't affect your credit.


Repayment and Fees

Upstart's loans all have three-year (36-month) repayment periods, and payments begin within 20 to 30 days after the date you receive your loan. You can pay by ACH bank transfer or check, but keep in mind that every check payment will be subject to a $15 processing fee. Should you wish to take out a second loan after your first, you can do so if you've made on-time payments for six months or more, have no more than one outstanding loan from Upstart at the time of application and owe no more than $35,000 of the principle loan amount.


An origination fee is deducted from every loan made through Upstart. Your origination fee is dependent upon your assigned loan grade, and it will range between 0% for AAA-grade loans to 8% for D-grade loans. Upstart does not charge any fees for paying off your loan early, but there are fees for late or failed payments. Late payments made more than 10 days past your due date will be subject to a fee of 5% of the total amount past due or $15 (whichever is higher), while a failed ACH transfer or check will be charged a flat $15 fee.

If you want to make additional payments or pay your loan off early, you can do so easily from your account dashboard. Upstart reports all payments to all three credit bureaus, so be sure to make your payments on time — doing so will help build your individual credit and help improve your chances if you should need to take out a larger business loan in the future. If you have trouble making payments, Upstart encourages customers to call and make arrangements.


Trustworthiness and Customer Support

Upstart has only been around since 2012, but it has garnered a lot of positive attention during that time. It's accredited with the BBB, and it has a solid A+ rating with the organization. Loans are made through Cross River Bank, an FDIC-insured commercial bank in New Jersey that is also accredited with the BBB and holds an A+ rating with the organization.

Customers can contact Upstart support through a variety of methods — phone, email, an online contact form and live chat. Phone support and live chat are both available Monday through Friday from 6 a.m. to 5 p.m. PT, and the online form and email can be used anytime with responses sent during business hours. We had pleasant interactions both online and over the phone with Upstart's customer service representatives and found them to be helpful and knowledgeable. The website itself is easy to navigate and offers a searchable FAQ with answers to most questions borrowers might need to ask.


Conclusion

Students and recent graduates with little credit history might think they don't have a shot at taking out a loan to start their business, but Upstart bridges that gap with its evaluation of academic performance. The application process feels personal, and customer support is top-notch. Even if you aren't a student/recent graduate or have a solid credit history, Upstart is a worthwhile service to consider for your small business loan.

Apply for Upstart | Compare to Other Small Business Loans

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Service Details

Minimum/Maximum Loan Amount:$1,000 - $50,000* (*$6,000 for OH; $7,000 for MA)
APR:7.39% - 29.99%
Terms Available:36 months
Origination Fee:0% - 8%
Owner's Credit Rating:620+

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