Upgrade Personal Loans 2021 Review: Flexible Options, But Relatively High APRs

An image to accompany a review of Upgrade personal loans Illustration/NextAdvisor
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Launched in 2017, online fintech company Upgrade offers a variety of financial products, including personal loans, credit cards, a rewards checking account, and free credit monitoring services. The company describes itself as “a mobile banking experience” that has served over 500,000 customers who have collectively borrowed more than $7 million since the company’s launch.

Upgrade’s wide range of loan terms and loan amounts, as well as minimum credit score requirements in the upper end of the “poor” range, offer flexibility to borrowers. In addition, Upgrade offers certain benefits to customers who use multiple Upgrade products, such as a potential rate discount on their personal loans if they have an Upgrade rewards checking account. However, Upgrade’s loan APR (annual percentage rate) range is on the high side compared to some competitors, so an Upgrade loan might not be the best choice for everyone.

What to Know Before Getting a Personal Loan

Before you apply for a personal loan, you should understand how personal loans work. Personal loans are issued in a lump sum and are repaid with a fixed monthly payment for a specific term or period of time, so they’re different from credit cards. Personal loans typically come in two types: secured and unsecured. With a secured loan, you put up an asset as collateral, such as the equity you have in your vehicle or home. That puts the asset at risk of being taken away if you default. 

Before you apply for a personal loan, you should shop around and check your rate with different lenders. Most lenders offer a pre-approval process, which only requires a soft credit check that won’t hurt your credit score. You’ll get an idea of what you’d pay in interest based on your credit information, although your actual rate could change slightly when you’re formally approved. Still, comparing personal loan rates is the best way to ensure you don’t overpay for a loan. 

Some personal loans also come with origination or application fees, so compare the APR, which represents the total cost of borrowing, when choosing a lender. You should also avoid lenders that charge prepayment penalties. Once you receive your money, practice healthy financial habits. Set up automatic payments so they’re never late, and budget to ensure you’ll have the funds available each month. 

Alternatives to Personal Loans

Depending on your individual financial situation, one of these alternatives may better suit your needs:

  • Home equity loan or HELOC: If you have at least 15-20% equity in your home, you may be able to qualify for a home equity loan or home equity line of credit. These often come with lower interest rates than personal loans because they are secured by your house. But be careful; if you default on payments, you could lose your home.
  • Balance transfer credit card: If your goal is to consolidate debt, you may be able to complete a balance transfer to a card with a 0% introductory APR. But you should only consider this as an alternative if you can pay off the balance during the introductory period, which is typically 12 to 18 months. Otherwise, you’ll need to pay high credit card APRs on the remaining balance after the introductory period ends.
  • Free credit counseling: If you feel overwhelmed, consider seeking assistance from a nonprofit credit counseling agency. They can tell you if a budgeting or savings strategy would help, if you need a debt management plan, or if you should consider bankruptcy. 
  • Savings strategy: If you don’t need cash urgently, reevaluating your budget and setting more of your income aside in a high-yield savings account can help you reach your financial goals without borrowing. 
  • Borrowing from friends and family: If you have bad credit, getting a low interest rate on a personal loan can be difficult. You’ll likely pay less in interest if you can borrow from a friend or family member. If you don’t know anyone with the funds, you might also consider asking a creditworthy family member or friend to co-sign on a personal loan for you. Although not all lenders offer the option to do this, adding a co-signer might increase your chances of qualifying for a loan or help you get a lower interest rate.  

Pros and Cons of Upgrade Personal Loans

Pros

  • One-day funding

  • Choose your own due date

  • No prepayment penalties

  • Available in 48 states

  • Free credit health tools

  • Joint applications allowed

  • Potential personal loan rate discounts for rewards checking account customers

  • Low minimum credit score requirement

Cons

  • 2.9% to 8% origination fee

  • Late payment penalties

  • Requires employment and income verification

  • Not available to residents of IA, DC, and WV

Upgrade Compared to Other Lenders

UpgradeBest EggUpstart
Current APR5.94% – 35.97%5.99% – 35.99%6.86% – 35.99%
Loan Term Range24 to 84 months36 to 60 months36 or 60 months
Loan Amount$1,000 to $50,000$2,000 to $50,000$1,000 to $50,000
Credit Score Needed560640600
Prepayment PenaltyNoneNoneNone
Origination Fee2.9% – 8%0.99% – 5.99%0% – 8%
Unsecured or Secured DebtBothUnsecuredUnsecured

The above rates and loan information is accurate as of September 7, 2021. The NextAdvisor editorial team updates this information regularly, though it is possible APRs and other information has changed since it was last updated. Some of the lowest advertised rates might be for secured loans, which require collateral such as your home, car, or other asset. Also, some loan offerings may be specific to where you live.

How to Qualify for an Upgrade Personal Loan

To get an Upgrade personal loan, borrowers must meet the following basic requirements:

  • Be a U.S. citizen, permanent resident, or live in the U.S. with a valid visa
  • Be at least 18 years old (19 years old in Alabama and certain other states)
  • Provide a verifiable bank account and a valid email address

Upgrade doesn’t list a minimum credit score requirement on their website, but a company representative confirmed that you’ll need a minimum FICO score of 560 to qualify for a loan. The company says it’ll take your credit score, credit usage, and history into account when evaluating your application. If you think your credit score may be too low to qualify for a loan with a reasonable APR, Upgrade does allow joint applications. Applying with a co-borrower with a higher credit score than you may help you qualify for lower rates or a larger loan amount, but it comes with its own pros, cons, and risks. 

A company representative also confirmed that there is no minimum income needed to qualify for a personal loan. You will be required to submit documents to verify your income, however, and Upgrade may use your income when evaluating your application. Self-employed applicants may need to submit additional documents to verify income. 

If you already have a personal loan with Upgrade, you may still qualify for a second loan. Upgrade says it’ll look at a variety of factors to determine your eligibility.

Who Should Get an Upgrade Personal Loan

Like most personal loans, Upgrade loans can be used for a variety of purposes, from consolidating debt to paying for large expenses. Some things they can’t be used for include post-secondary education and student loans, investing, and gambling of any kind.

The long loan terms and high loan amounts available make Upgrade a good option for larger expenses, such as home improvements. However, it’s worth noting that qualifying for the larger loan values may be dependent on your creditworthiness. Upgrade’s minimum credit score requirement of 560 falls in the upper end of the “poor” range, according to credit bureau Experian, offering greater flexibility to borrowers with less-than-stellar credit. Upgrade also offers auto secured loans that use a borrower’s car as collateral, which can provide another option for borrowers who can’t qualify for an unsecured loan at a reasonable rate. Just be aware of the pros, cons, and risks of secured loans before taking one out.  

However, Upgrade’s APR range is higher than some competitors, like SoFi or LightStream, so if you have a good credit score, you may be able to get better rates elsewhere. 

Pro Tip

Upgrade doesn’t charge a prepayment penalty, so you’ll save money on interest if you can pay off your personal loan early.

Because Upgrade offers multiple financial products beyond personal loans — including a credit card, rewards checking account, and free credit monitoring services — it can be a good option for those who want a one-stop shop for all their financial needs. In addition, customers who have a rewards checking account may be eligible for up to 20% lower rates on Upgrade loans and cards. While there are some benefits to having multiple Upgrade products, you should always evaluate each product individually before signing up to decide if it’s right for you. 

How to Apply for an Upgrade Loan

If you’ve decided that an Upgrade loan is right for you, here’s how to apply for one:

  1. Check your rate. You can check your rate on Upgrade’s website before you officially apply. You’ll need to provide some personal information like name, address, and income. Upgrade will perform a soft credit check, which won’t impact your credit score. 
  2. Choose your offer. After you’ve submitted your information, Upgrade will provide you with a list of loan offers that include amount, term, and rate. Choose the offer you want based on what’s available to you.
  3. Accept the offer and submit the required documents. Once you’ve accepted the offer you want, you’ll need to submit certain documents that verify your income and your identity. Examples of documents that you need to provide include copies of government issued IDs, recent pay stubs, and bank statements. Upgrade will provide a to-do list of tasks you need to complete or documents you need to provide to finalize your application. You can check on the status of your application through your Upgrade account. 
  4. Wait for your loan to fund. After you’ve accepted your offer and cleared the necessary verifications, you should receive your funds within one day. Funds paid directly to your creditors, if using a debt consolidation loan, may take up to two weeks to clear. Once your loan is funded, Upgrade will perform a hard credit inquiry which may affect your credit score.

Upgrade FAQs

Is Upgrade good for personal loans?

Upgrade offers personal loans with a wide variety of loan terms, no prepayment penalties, and comparatively lenient credit score requirements, making the lender a flexible option for borrowers with poor or fair credit. However, its APR range is higher than several competitors, so those with a good credit score may be able to find better rates elsewhere.

What credit score do you need for an Upgrade loan?

The minimum credit score required by Upgrade is 560, making this a good option for borrowers with fair or poor credit. However, Upgrade will evaluate your credit score and income when determining your rate, and the lowest rates are only available to the most creditworthy borrowers.

Can you get an Upgrade personal loan with bad credit?

Upgrade’s minimum credit score requirement is 560, which is on the upper end of the “poor” range, according to credit bureau Experian. Borrowers with bad credit may qualify for an Upgrade loan, although Upgrade will look at multiple factors, including income and credit history, when evaluating applications. Be aware that those with a low credit score may not qualify for the best rates. Since Upgrade offers pre-approval, you can easily check your eligibility and rate without submitting a formal application.

Does an Upgrade loan hurt your credit?

While you can get pre-approved with a soft credit check that won’t affect your credit score, a formal application to Upgrade will cause a small but temporary dip in your credit score. However, like with any personal loan, making on-time payments could improve your credit score. You can also monitor your credit score with Upgrade’s free credit health tools.