Upstart and LendingClub both offer consumers easy prequalification processes, convenient online applications and accessible credit score requirements. Though somewhat more flexible than traditional financial institutions, these online lenders still have advantages and disadvantages that make them better for some borrowers.
To compare Upstart versus LendingClub, evaluate how each lender’s qualification requirements, loan amounts and interest rates meet your borrowing needs. Also consider repayment terms and available perks when choosing between the two lenders. Upstart’s non-traditional approval criteria make it a good option for borrowers with fair credit scores. Still, LendingClub may be a better option for borrowers who want small loans with more flexible repayment periods.
How Upstart Personal Loans Work
Upstart is a fintech company that uses artificial intelligence (AI) to evaluate prospective borrowers for personal loans from $1,000 to $50,000. Because the lender considers non-conventional variables such as education, employment and residence, it may be easier to get a personal loan—especially for less-qualified borrowers.
Like many top lenders, including LendingClub, Upstart offers a prequalification process that lets consumers see the interest rate they’re likely to qualify for based on a soft credit check.
That said, Upstart’s repayment terms are limited, and payments can only be spread out over three- or five-year terms. Annual percentage rates (APRs) are also high among top lenders—around 7% to 36%—and Upstart does not offer discounted rates for borrowers who make automatic payments. Customers also incur an origination fee between 0% and 10% of the loan amount, which Upstart deducts from the loan proceeds at disbursement.
Upstart Personal Loans Pros and Cons
Pros
- Accessible qualification requirements. Upstart imposes a minimum credit score requirement of 600—the same as LendingClub. In contrast to many lenders, however, Upstart also evaluates applicants based on non-traditional factors, like college education, job history and residence. The lender also utilizes AI to assess an applicant’s debt-to-income (DTI) ratio, past credit inquiries and history of bankruptcies or delinquent accounts.
- Prequalify with a soft credit check. Prospective Upstart borrowers can prequalify for a personal loan with just a soft credit inquiry. This feature, which LendingClub also offers, means prospective borrowers can more easily compare loan options without harming their credit scores.
- Loans start at $1,000. Upstart’s personal loans start at just $1,000, making them a good choice for consumers who only need to borrow a small amount. Still, loans only go up to $50,000, which may not be enough for many borrowers. LendingClub’s loan amounts are similar but slightly more restrictive as they only go up to $40,000.
- Hardship program. Upstart borrowers who face financial hardship—like a job loss—may be eligible for the lender’s relief program. Those who qualify for the perk may have their payments temporarily suspended. Interest still accrues, but the program can effectively reduce monthly expenses in a pinch.
Cons
- Limited repayment terms. Upstart personal loans are only available with 36- or 60-month repayment terms. This is much less flexible than LendingClub, which offers loan terms from 24 to 60 months.
- High maximum interest rates. Upstart’s interest rates start around 7%, and the lender’s maximum rates are almost 36%—higher than those available through many top lenders. These rates are similar to those available from LendingClub, which extend from 9.57% to 35.99%.
- No autopay discount. In addition to charging higher interest rates than many lenders, Upstart doesn’t offer a discount to borrowers who sign up for automatic payments. The same is true for LendingClub.
- Origination fees. Upstart charges borrowers an origination fee of 0% to 10% of the loan amount. While the highest fee charged by the lender is higher than LendingClub’s maximum origination fee (6%), not all borrowers encounter this fee. In contrast, all LendingClub borrowers pay an origination fee of at least 2%.
When To Consider Upstart Personal Loans
For borrowers with fair credit, Upstart can be easier to qualify with than other lenders. However, the lender’s interest rates are high, and terms are somewhat limited. Still, it may be well-suited to consumers who won’t qualify for more competitive terms elsewhere.
Upstart only requires a minimum FICO score of 600, and prospective borrowers can follow the prequalification process to see what rate they’ll qualify for. Loan applications are also reviewed based on non-traditional variables, and qualifying with limited credit history may be possible.
Upstart may be among the best personal loans if you want a small loan. The lender’s minimum loan amount is only $1,000 in most states but is higher in Georgia ($3,100), Hawaii ($2,100) and Massachusetts ($7,000).
Featured Partner Offer
1
Upstart
600
6.40% to 35.99%
$1,000 to $50,000
How LendingClub Personal Loans Work
LendingClub is a digital marketplace offering personal loans and a range of banking and investing services.
Loan amounts are lower than those from some top lenders and only go up to $40,000. However, the minimum $1,000 loan amount makes the lender a good option for borrowers who only need to borrow a small amount. Repayment terms range from 24 to 60 months (two to five years), making the lender a more flexible option than Upstart—especially for more qualified borrowers.
LendingClub’s APRs, ranging from around 9.50% to 36%, are comparable to those available from Upstart, though the minimum rate is slightly higher. As with other lenders, LendingClub reserves its lowest APRs for borrowers with excellent credit. LendingClub charges 2% to 6% origination fees but—like Upstart—does not charge prepayment fees. Late payment fees are equal to either 5% of the late payment amount or $15, whichever is greater.
LendingClub Personal Loans Pros and Cons
Pros
- Low credit score requirements. LendingClub requires consumers to have a minimum FICO score of 600 to qualify for a personal loan. However, the average LendingClub borrower has a score of 705. Only applicants with excellent credit can access the lender’s most competitive rates.
- Prequalify with a soft credit check. Like many top lenders, including Upstart, LendingClub lets consumers see what rate they’ll likely qualify for without a hard inquiry. Plus, the first step in the prequalification process is choosing whether to apply alone or with a co-borrower—making it easier to qualify with the help of a more creditworthy co-applicant.
- Loans start at $1,000. As with Upstart, LendingClub’s personal loans start at $1,000. That said, LendingClub’s maximum loan amounts are also low—topping out at just $40,000.
- Flexible repayment terms. LendingClub’s repayment terms range from 24 to 60 months—or two to five years. This offers more flexibility than Upstart, which only offers three- or five-year terms. The lender also provides payment date flexibility that allows borrowers to temporarily or permanently change their payment due dates.
Cons
- Origination fees. LendingClub charges origination fees between 2% and 6% of the total loan amount. This means all LendingClub borrowers encounter an origination fee, whereas some Upstart borrowers can take advantage of a 0% fee. Still, LendingClub’s maximum origination fees are lower than Upstart’s (10%).
- High maximum interest rates. LendingClub’s APRs start around 9.50% (slightly higher than Upstart’s minimum rate) and go up to 36%—about the same as the maximum rate imposed by Upstart.
- Does not allow co-signers. LendingClub does not allow borrowers to take out a personal loan with a co-signer. However, co-applicants are permitted and can make it easier to qualify for a more competitive interest rate.
- No autopay discount. Like Upstart, LendingClub borrowers don’t receive a rate discount for signing up for automatic payments.
When To Consider LendingClub Personal Loans
LendingClub is a good option for borrowers who want to access small loans and won’t be impacted by the lender’s low borrowing limit of just $40,000. Likewise, consumers faced with smaller expenses can benefit from LendingClub’s low minimum borrowing amount ($1,000).
Not only does this prevent borrowers from taking on more debt than necessary, but it can also keep monthly payments and interest accrual low. LendingClub’s more flexible repayment terms also mean you can pay off your loan more quickly than with Upstart—or access lower monthly payments with a longer term.
Featured Partner Offer
1
LendingClub Personal Loans
$1,000 and $40,000
600
9.57% - 35.89%
Upstart vs. LendingClub: Which Should You Choose?
| Upstart | LendingClub | |
|---|---|---|
|
Minimum credit score
|
600 | 600 |
|
Available loan amounts
|
$1,000 to $50,000
|
$1,000 to $40,000
|
|
Repayment terms
|
36 or 60 months
|
24 to 60 months
|
|
Interest rates
|
7.80% to 35.99%
|
8.98% to 35.99%
|
|
Origination fee
|
0% to 10%
|
2% to 6%
|
|
Prepayment fee
|
None
|
None
|
|
Funding time
|
Next business day
|
Up to five business days
|
|
Co-signers permitted
|
No
|
No
|
|
Best for
|
Fair credit
|
Small loans
|
