A clear advantage of using a personal loan to consolidate debt is that you will not become overburdened by too many payments and due dates.
Two leading online lenders that offer personal loans with simple applications are Upstart and OneMain Financial. In this review, we compare and contrast them to determine which is best for you.
What is OneMain Financial?
OneMain Financial provides personal loans online and offline through its more than 1,500 physical branches spread across four states. It is ideal for people having trouble obtaining a personal loan from a conventional bank because of poor credit ratings. OneMain is one of the few online lenders that offers joint loans in addition to secured and unsecured loan options.
What is Upstart?
Upstart is an online platform that brings together investors and borrowers seeking personal loans. Its use of artificial intelligence (AI) to pair borrowers and lenders differentiates Upstart from traditional lending partners. The AI approval process is helpful because it is more supportive of borrowers with bad credit.
What do Upstart and OneMain Financial offer?
OneMain Financial, like Upstart, employs a peer-to-peer lending model. Investors provide finance directly, and consumers benefit from more affordable loan terms.
You can choose between two-, three-, and five-year term lengths for your personal loans. Fortunately, both OneMain and Upstart allow borrowers to change their payment dates. They also offer the option to send money directly to creditors for those consolidating debt. Both offer financial services like debt consolidation, credit card refinancing, personal loans, auto refinancing, and more.
OneMain and Upstart make it easy to get a personal loan approved. OneMain evaluates every application individually and has no minimum credit score requirement. Upstart does not rely solely on FICO scores. But for people with a credit history, Upstart expects the metric to be 600 or higher. Those without a credit score or history can still have their application reviewed. As such, both are suitable for people who can't obtain personal loans due to low credit scores or a lack of credit history.
Like Upstart, OneMain offers unsecured loans. It usually provides borrowers with funds within a day or two. Likewise, Upstart has a quick application process and aims to credit funds to borrowers within one business day. Both provide borrowers with access to flexible repayments.
What is OneMain’s unique offering?
OneMain Financial offers loans to people with bad credit who are not eligible for traditional loans. No specific credit score is required, but you need to fill out a prequalification form in their website.
OneMain Financial has more than 1,500 physical branches nationwide spread out across four states, where you can meet with their representatives to clarify your alternatives.
You can receive your funds the same day if your loan is approved by noon.
If you want to know more about OneMain Financial, read a full OneMain Financial Review here.
What is Upstart’s unique offering?
Using AI, Upstart automates the personal loans application process. The AI weighs all relevant factors to help you make an informed decision.
Personal loans, auto refinancing, loans for home improvements, loans for weddings and other celebrations, medical loans, debt consolidation, and more are all offered by Upstart.
Personal loans can get approved within just 1-3 days. After approval, a personal loan is deposited to your account within a business day 99% of the time.
Upstart provides personal loan rates which are 10% lower than those offered by conventional lenders.
You can pay off a portion of it anytime. You won't incur penalties.
If you want to know more about Upstart, read a full Upstart Review here.
How do their fees compare?
OneMain Financial Services fees
What are the interest rates?
OneMain Financial interest rates
OneMain Financial offers loans from $1,500 to $20,000, but loan amounts vary from state to state. You can select an unsecured or secured loan with flexible repayment terms from 2 to 5 years. The APR range is steeper than others, ranging between 18% to 35.99%.
Upstart interest rates
Upstart requires a minimum 600-credit score. However, if you have a suitable income, a good education, and a steady job, their AI system could let you get away with a lower rating. Upstart provides unsecured personal loans with terms ranging from three to five years and loan amounts ranging from $1,000 to $50,000. The APR interest rate ranges from 5.40% to 35.99%.
What are the eligibility criteria for OneMain Financial and Upstart?
OneMain Financial eligibility criteria
Upstart eligibility criteria
Which has a better reputation?
OneMain is open about its requirements and fees. It has a great mobile app, plenty of financial education resources, and a straightforward application process with prequalification based on soft credit checks. OneMain received an A+ rating from the Better Business Bureau and a 4.9 score from Trustpilot.
The Upstart website provides information about its AI-based approach. However, you cannot manage loans using the Upstart mobile app at this time. The Better Business Bureau has given the lender a B+ rating. Upstart also has a 4.9-star rating out of 5 on Trustpilot. Credit card consolidation loans from Upstart have received praise for their ease of application and simplicity.
Bottom Line: Which personal loan provider wins?
People with bad credit can apply for a personal loan from either of these lenders. However, OneMain offers smaller loan amounts, although with more scalable repayment terms.
Upstart provides more in terms of minimum and maximum loan amounts ranging from $1000 to $50,000. OneMain Financial's lowest available APR of 18% is nearly double that of Upstart's lowest APR of 5.40%. Both companies have a similar maximum APR of 35.99 %.
OneMain has branches in the 44 states where it provides personal loans. Though a borrower can obtain a loan without visiting a branch, those who prefer to interact with a loan officer in person may visit a OneMain branch. Furthermore, OneMain borrowers have seven days to change their minds and cancel the loan without making any payments. This feature is available from only a few lenders.
Your loan application may be approved for either a secured or an unsecured loan. While an unsecured loan doesn't require any collateral, a secured loan requires you to provide collateral, such as a vehicle.
Personal information such as credit history, income, expenses, debts, and available collateral can influence your terms. For instance, if you borrowed $6,000 with a 24.99 % APR and a five-year term payment, your monthly payments would be $176.07. This example assumes a typical consumer with decent credit.
OneMain's loan calculator on their website can help you estimate monthly payments for various loan amounts.
If you accept the terms before 5 pm ET, Monday to Friday except for holidays, Upstart claims the funds are transferred the following business day. The funds are transferred the next business day if the terms are accepted after 5 pm ET, whether on a weekend or a holiday, provided that the money is not used to pay off credit cards. There is an additional three business days between accepting your loan and receiving the finances for education-related loans.
The company anticipates 14 days after signing the promissory note for you to receive the car loan funds. Many factors control the timeframe for title administration and can differ widely by state. They foresee that this process will take between 30 and 60 days after loan origination, but certain situations may delay the lien perfection process even further.
Your credit score will not get affected by checking your rate on Upstart.
They conduct a "soft credit inquiry" once you check your rate. Your credit score is unaffected by soft credit inquiries on your report.
A "hard credit inquiry" will only be carried out to confirm the accuracy of your application if you accept the loan offer and continue with the application. This action will be recorded as an inquiry on your credit report and may affect your credit score.
The time it takes to apply for and receive a loan varies at OneMain Financial depending on when you submit your application, how many documents are required to approve your application, and the time needed to get those documents, along with other factors.
Under 10 minutes is the average time it takes to complete the application and receive an initial response to your request. Getting a final determination will take longer and depends on how much time is needed to verify your application details.
You will receive your loan funds after signing your loan documents:
Acceptable collateral examples include:
To determine whether the collateral has sufficient value, all of it will get appraised. Vehicles used as collateral must also be insured against physical damage for the duration of the loan.
Vehicles cannot be pledged as collateral for loans to active-duty service members, their spouses, or any dependents protected by the Military Lending Act.
If you want to get more information on collateral, contact your OneMain Financial local branch.