Upgrade Personal Loans Review
Upgrade is a convenient, user-friendly online lender that specializes in unsecured personal loans and lines of credit. Customers can borrow money for a variety of purposes, with many clients seeking to refinance or consolidate existing debt, fund a major purchase, or renovate their home. Thanks to Upgrade’s quick, easy process, borrowers can access capital at highly competitive rates in as little as one business day after approval.
With the burgeoning online lending industry inspiring fierce competition, you may be wondering how Upgrade compares to other companies. In this review, we’ll take a look at Upgrade’s personal loans, examine how they work, and look at the pros and cons of choosing Upgrade the next time you need to borrow money.
Upgrade was founded in 2017 by Soul Htite and Renaud Laplanche, two of the co-founders of Lending Club. Htite and Laplanche envisioned Upgrade as an intelligent alternative that uses online and mobile platforms to deliver and efficient and customer-centric user experience built on empowerment through education. Their goal is to provide borrowers with safe, smart, and responsible access to credit sources. Since its 2017 founding, Upgrade has fielded more than 10 million loan applications, and has distributed in excess of $3 billion in capital to borrowers.
What Makes Upgrade Unique?
Upgrade was founded with the explicit purpose of filling in some of the market gaps that the founders’ previous venture, Lending Tree, did not address. For example, Upgrade is purpose-built to cater to the needs of consumers whose loan applications have been rejected, and to help educate borrowers on the fine details of money management and the credit score system.
Upgrade strives to empower consumers through education. The company has launched innovative credit simulator tools, which provides a practical demonstration of responsible borrowing and shows users how responsible management of personal loans can be a powerful credit-building tool. All Upgrade customers are able to access these resources free of charge.
What Kind of Loans Does Upgrade Offer?
Upgrade primarily offers unsecured personal loans. This means that borrowers do not have to pledge any collateral as consideration for the loan. Upgrade functions as a direct lender: borrowers are not routed to third-party institutions or a loan marketplace. Instead, the company supplies funds directly. Borrowers do not deal with any other lenders or outside companies.
Here’s a snapshot of Upgrade personal loan offerings as of June 2020:
- Loan types: Unsecured personal loans
- Loan amounts: $1,000 to $35,000
- Annual percentage rates (APRs): 7.99% to 35.99%
- Repayment periods: 36 months to 60 months
One thing to note: most borrowers are asked to choose a repayment term of either 36 months/3 years or 60 months/5 years. Upgrade doesn’t offer customized repayment periods in the vast majority of cases. Its interest rates also change with overall conditions in the financial markets: when the prime rate rises, Upgrade increases its APRs, and when the prime rate falls, Upgrade adjusts them downward.
As an alternative to standard loans, Upgrade also offers personal lines of credit through its Upgrade Card program. The Upgrade Card functions much like a regular debit or credit card, except that it is linked to a revolving line of credit. Eligible borrowers can set credit limits of up to $20,000, making the Upgrade Card program an appealing alternative to customers who want more flexibility than Upgrade’s standard personal loans typically offer.
Who Is Eligible?
Like all other United States-based online lenders, you must be at least 18 years of age (19 in some jurisdictions) to borrow money through Upgrade. The service is also restricted to U.S. citizens or documented permanent residents.
Additional eligibility requirements include:
- A FICO credit score of at least 620
- At least $1,000 per month in free cash flow, which is defined as funding left over once the borrower has covered his or her mandatory expenses such as housing, food, and transportation
You may be asked to demonstrate that you meet the company’s free cash flow requirements to prove your eligibility. In most cases, this means that you will have to submit supporting documentation that verifies your income. Examples include pay stubs or tax returns.
How Upgrade’s Borrowing Process Works
If you want a standard unsecured personal loan from Upgrade, you will follow an easy three-step process:
- Apply online to obtain a rate quote for the loan you want. The entire process only takes a few minutes.
- Select the loan you want from the options for which you qualify. Most applicants will receive multiple loan offers.
- Accept the offers that best matches your needs. Once Upgrade processes all your paperwork, the funds will be released to your bank account within one business day.
Customers who want to apply for an Upgrade Card line of credit also follow a three-step process:
- Apply online for your line of credit, with credit limits maxing out at $20,000.
- Make purchases and payments with your Upgrade Card, or transfer funds from your Upgrade Card account to your personal bank account.
- Manage your line of credit by making regular monthly payments. You can set up automatic payments from your regular bank account if you wish, and you will never pay any penalty fees for making lump-sum prepayments.
If you have questions about any access of the Upgrade borrowing process, you can engage a customer service representative at any time.
Pros and Cons of Upgrade
The company’s advantages include:
- A fast, easy online application process that takes only a few minutes to complete
- The flexibility to choose a standard unsecured personal loan or a revolving line of credit
- Excellent educational and tracking tools that empower customers through knowledge and help them manage their credit more effectively
- High levels of transparency
On the flip side, commonly cited drawbacks include:
- The “free cash flow” requirement of at least $1,000 per month can make it difficult for some borrowers to qualify, especially if they are already managing multiple credit accounts and are seeking to consolidate them
- Upgrade applies origination fees to its loans, which can be as high as 6% of the borrowed proceeds
- Late fees may apply to behind-schedule payments on unsecured personal loans
Notably, Upgrade also offers hardship plans that protect borrowers who lose their jobs, and they also facilitate co-signed and joint loans. These features inspired many positive comments from both professionals and customers.
Upgrade is accredited by the Better Business Bureau (BBB), and it holds a BBB rating of A+. On Trustpilot, Upgrade holds an aggregate rating of 4.8 out of 5 as of June 2020, with more than 6,000 reviews. Of those reviews, 84% gave the company a perfect 5 out of 5, and an incredible 97% reflected scores of 4 out of 5 or better.
Our take: Upgrade boasts some of the most impressive customer satisfaction metrics of any online lender we’ve reviewed. If you meet the company’s eligibility standards and you’re looking for a lender that will help you improve your financial literacy and boost your credit score, Upgrade is hard to beat.