Home Web marketing SoFi vs. Upstart Personal Loans

SoFi vs. Upstart Personal Loans

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Why We Love SoFi

While there’s no perfect lender, there’s a lot to like about SoFi, especially for borrowers with impressive credit histories and other qualifications.

Competitive interest rates

SoFi has relatively strict lending standards, but its interest rates are among the most competitive in the industry. This can make SoFi a great choice for highly skilled individuals who need to consolidate debt or finance major purchases.

No charges

SoFi does not have origination fees, late fees, or prepayment penalties for prepaying a loan. Many personal lenders are missing one or two of these fees, but not having all three is quite rare. This can be a big differentiator between SoFi and other lenders, as many (including Upstart) often charge quite high origination fees.

Large loan limits

SoFi offers personal loans up to $100,000, which is one of the highest upper limits in the industry. SoFi is focused on high-qualified, high-income borrowers, so that makes sense.

Excellent mobile app and comprehensive financial ecosystem

SoFi offers a fantastic mobile app that allows customers to manage their accounts from anywhere. It also offers checking and savings accounts, an investment platform, credit cards, other types of loans, and more, all of which can be viewed, requested, and managed from the same app.

>> Learn more: SoFi Personal Loans Review

Where Upstart is Better

SoFi is not for everyone. If you have a low credit score or haven’t yet officially established a credit history, for example, you might struggle to get approved by SoFi. But that’s where Upstart comes in. Upstart is designed for credit situations that don’t meet most lenders’ definitions of “prime”. So here are some of the areas where Upstart stands out.

Easier (and different) qualifications than most lenders

Upstart’s core mission is to provide access to credit to more borrowers than most lenders, without the need for co-borrowers for people with low credit scores. It uses a complex lending methodology that aims to go beyond traditional metrics such as the FICO® score and integrates over 1,000 customer data points into its process. Upstart Loans have been approved for borrowers with FICO® scores as low as 580, and in some cases, for borrowers with no assessable credit history.

Wide range of loan amounts

Upstart provides loans for as low as $1,000 or up to $50,000. This is a much wider range than most lenders use, especially on the lower end, which makes Upstart a solid choice for borrowers who only need to borrow a few. thousands of dollars.

>> Learn more: Our full review of Upstart personal loans

Where SoFi can improve

As mentioned, no lender is perfect, and SoFi is certainly no exception. Here are some of the biggest downsides to SoFi’s personal lending business.

Few options for subprime borrowers

To be perfectly clear, SoFi focuses on qualified borrowers. It uses a somewhat different methodology than most banks, but most people approved for SoFi loans have excellent credit histories, have not been unemployed recently, have relatively high incomes, and have other solid qualifications. For this reason, SoFi notably lacks options for borrowers without a prominent credit and employment history.

High minimums

As mentioned earlier, SoFi has one of the highest maximum loan amounts in the industry, but with a minimum of $5,000, it also has one of the highest low-end thresholds. In other words, all borrowers need borrow $5,000 or more, and SoFi could improve by offering low-balance loans to customers.

Where Upstart can improve

Because it focuses on borrowers who might struggle to get approved or receive competitive loan offers elsewhere, Upstart has some major downsides, mostly related to cost.

Assembly costs

Upstart Setup Fee box be zero, but it can also be up to 8% of the loan amount (many in the middle of the range). Granted, origination fees are much more common in the world of subprime lending, which is Upstart’s bread and butter, but it can be a significant cost differentiator.

High APRs

Because it focuses on borrowers without stellar credit histories and high incomes, Upstart’s APR range is a bit high end. For many borrowers, Upstart’s rates might actually exceed the fees charged by credit cards.

Mobile app

Upstart does not offer a mobile app, which means customers must apply for and manage their loans through the company’s desktop platform.