Obtaining personal loans using conventional means can often be a time-consuming and cumbersome process. If you want to avoid such hassles, this comparative analysis of Upstart and LendingClub can help you choose the right lender based on your loan requirement and preference.
What is Upstart?
Upstart is a lending platform that uses artificial intelligence technology to connect borrowers with lenders. It considers more than 1,500 non-traditional variables in providing loans to potential borrowers with fair or no credit. Loan amounts range from $1,000 to $50,000 depending on the borrower’s application status.
What is LendingClub?
LendingClub is an online digital marketplace offering banking and personal loans to potential borrowers. It works with a network of investors to help borrowers get loans between $1,000 and $40,000 with loan terms of 36 and 60 months. Their less stringent eligibility requirement makes LendingClub suitable for applicants with a fair to good credit history.
What do they both offer?
Potential borrowers looking for lower amounts of personal loans can take loans as low as $1,000 from both Upstart and LendingClub. Approval may vary based on different parameters.
Both offer an Annual Percentage Rate (APR) of up to 35.99% with only a marginal difference between them. Neither offers autopay discount.
There are origination and late fees for borrowers opting for personal loans. There is no prepayment penalty.
Borrowers can expect to receive the loan proceeds as early as the next business day upon successful approval of the application and signing of the loan agreement. Both companies offer loan terms of three years or five years.
What is Upstart’s unique offer?
Upstart offers a unique Hardship Program that allows borrowers to temporarily suspend their loan payment in case of any economic hardship such as job loss. However, the interest keeps on accruing during the suspension period.
What is LendingClub’s unique offer?
Some of the perks and features of taking loans from LendingClub are:
Borrowers with a good standing current account can change the payment due date either temporarily or permanently. While any permanent change in the due date needs to be done directly from the user account or via telephone, any temporary changes can be made via email or phone at least 3 days before the payment due date.
In addition to providing personal loans to potential borrowers, LendingClub provides auto refinancing and patent financing. Since its acquisition of Radius Bank, LendingClub is now referred to as a digital marketplace bank.
The LendingClub website is optimized for use on mobile phones, making it easier for customers to track their loan details, autopay information, and application status.
What are the interest rates?
Upstart interest rates
The APR varies from 5.4% to 35.99%. This is mainly determined by the period of which the loan is taken, and the financial status of the borrower among other factors. Unlike other service providers, Upstart does not offer any discount to borrowers opting for the autopay mode.
LendingClub interest rates
The APR varies from 6.34% to 35.89% while the average APR is somewhere around 15.95%. The applicable rate is determined by a number of factors like debt-to-income ratio, credit history, desired loan amount, among others. However, there is no rate discount for borrowers opting for the autopay mode.
To be eligible for an Upstart loan, potential borrowers need to meet the following criteria:
Below are the eligibility criteria for applying for a personal loan at the LendingClub platform:
Which has a better reputation?
While Upstart is suitable for lenders with a fair or no credit score, LendingClub is ideal for those who have a fairly good credit score. Borrowers will be able to take personal loans of up to $40,000 at LendingClub compared to $50,000 at Upstart. Both have a good market reputation when it comes to serving customers.
In our opinion, Upstart is suitable for individuals requiring a larger amount of personal loans with fair or no credit while LendingClub is ideal for individuals with good credit scores and looking for loan amounts of up to $40,000.
Both have been in business for more than a decade and served billions of customers. The two platforms have obtained good ratings from online customer review platforms and garnered ratings of more than 4 out of 5 from Trustpilot. The ease of the application process and continued customer support service are what make them reliable for personal loan requirements.
Upstart features a unique hardship program that allows borrowers to suspend their loan repayments in case of economic hardships like job loss. The interest keeps accruing on the pending loan amount during the suspension period. LendingClub allows its customers to change their loan repayment date either temporarily or permanently. But any failure to pay installments beyond a stipulated time from the due date without prior intimation will incur a penalty.
The target customers for Upstart and LendingClub are different. While Upstart helps potential borrowers with fair or no credit in obtaining personal loans of up to $50,000, LendingClub helps borrowers with a good credit score in obtaining loans of up to $40,000.
While Upstart claims to credit the loan proceeds as soon as the next business day after signing the loan agreement, LendingClub may take up to five business days to provide the loan funds. All depends on furnishing of the proper documents at the time of the loan application.
Both Upstart and LendingClub allow their customers to use the loan proceeds for credit card and debt consolidation, wedding loans, home improvements, and medical emergencies. The funds cannot be used for any illegal activity, procurement of illegal drugs, or any investment. Potential borrowers should contact customer support before starting an application.