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Upgrade Personal Loans: 2021 Review

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Launched in 2017, online fintech company Upgrade offers a variety of financial products, including personal loans, credit cards, a rewards checking account, and free credit monitoring services. The company describes itself as “a mobile banking experience” that has served over 500,000 customers who have collectively borrowed more than $7 million since the company’s launch.

Upgrade’s wide range of loan terms and loan amounts, as well as minimum credit score requirements in the upper end of the “poor” range, offer flexibility to borrowers. In addition, Upgrade offers certain benefits to customers who use multiple Upgrade products, such as a potential rate discount on their personal loans if they have an Upgrade rewards checking account. However, Upgrade’s loan APR (annual percentage rate) range is on the high side compared to some competitors, so an Upgrade loan might not be the best choice for everyone.

What to Know Before Getting a Personal Loan

Before you apply for a personal loan, you should understand how personal loans work. Personal loans are issued in a lump sum and are repaid with a fixed monthly payment for a specific term or period of time, so they’re different from credit cards. Personal loans typically come in two types: secured and unsecured. With a secured loan, you put up an asset as collateral, such as the equity you have in your vehicle or home. That puts the asset at risk of being taken away if you default. 

Before you apply for a personal loan, you should shop around and check your rate with different lenders. Most lenders offer a pre-approval process, which only requires a soft credit check that won’t hurt your credit score. You’ll get an idea of what you’d pay in interest based on your credit information, although your actual rate could change slightly when you’re formally approved. Still, comparing rates is the best way to ensure you don’t overpay for a loan. 

Some personal loans also come with origination or application fees, so compare the APR, which represents the total cost of borrowing, when choosing a lender. You should also avoid lenders that charge prepayment penalties. Once you receive your money, practice healthy financial habits. Set up automatic payments so they’re never late, and budget to ensure you’ll have the funds available each month. 

Alternatives to Personal Loans

Depending on your individual financial situation, one of these alternatives may better suit your needs:

  • Home equity loan or HELOC: If you have at least 15-20% equity in your home, you may be able to qualify for a home equity loan or home equity line of credit. These often come with lower interest rates than personal loans because they are secured by your house. But be careful; if you default on payments, you could lose your home.
  • Balance transfer credit card: If your goal is to consolidate debt, you may be able to complete a balance transfer to a card with a 0% introductory APR. But you should only consider this as an alternative if you can pay off the balance during the introductory period, which is typically 12 to 18 months. Otherwise, you’ll need to pay high credit card APRs on the remaining balance after the introductory period ends.
  • Free credit counseling: If you feel overwhelmed, consider seeking assistance from a nonprofit credit counseling agency. They can tell you if a budgeting or savings strategy would help, if you need a debt management plan, or if you should consider bankruptcy. 
  • Savings strategy: If you don’t need cash urgently, reevaluating your budget and setting more of your income aside in a high-yield savings account can help you reach your financial goals without borrowing. 
  • Borrowing from friends and family: If you have bad credit, getting a low interest rate on a personal loan can be difficult. You’ll likely pay less in interest if you can borrow from a friend or family member. If you don’t know anyone with the funds, you might also consider asking a creditworthy family member or friend to co-sign on a personal loan for you. Although not all lenders offer the option to do this, adding a co-signer might increase your chances of qualifying for a loan or help you get a lower interest rate.  

Pros and Cons of Upgrade Personal Loans

Pros

  • One-day funding

  • Choose your own due date

  • No prepayment penalties

  • Available in 48 states

  • Free credit health tools

  • Joint applications allowed

  • Potential personal loan rate discounts for rewards checking account customers

  • Low minimum credit score requirement

Cons

  • 2.9% to 8% origination fee

  • Late payment penalties

  • Requires employment and income verification

  • Not available to residents of IA, DC, and WV

Upgrade Compared to Other Lenders

Upgrade Best Egg Upstart
Current APR 5.94% – 35.97% 5.99% – 29.99% 6.76% – 35.99%
Loan Term Range 24 to 84 months 36 to 60 months 36 or 60 months
Loan Amount $1,000 to $50,000 $2,000 to $50,000 $1,000 to $50,000
Credit Score Needed 560 640 600
Prepayment Penalty None None None
Origination Fee 2.9% – 8% 0.99% – 5.99% 0% – 8%
Unsecured or Secured Debt Both Unsecured Unsecured

The above rates and loan information is accurate as of August 9, 2021. The NextAdvisor editorial team updates this information regularly, though it is possible APRs and other information has changed since it was last updated. Some of the lowest advertised rates might be for secured loans, which require collateral such as your home, car, or other asset. Also, some loan offerings may be specific to where you live.

How to Qualify for an Upgrade Personal Loan

To get an Upgrade personal loan, borrowers must meet the following basic requirements:

  • Be a U.S. citizen, permanent resident, or live in the U.S. with a valid visa
  • Be at least 18 years old (19 years old in Alabama and certain other states)
  • Provide a verifiable bank account and a valid email address

Upgrade doesn’t list a minimum credit score requirement on their website, but a company representative confirmed that you’ll need a minimum FICO score of 560 to qualify for a loan. The company says it’ll take your credit score, credit usage, and history into account when evaluating your application. If you think your credit score may be too low to qualify for a loan with a reasonable APR, Upgrade does allow joint applications. Applying with a co-borrower with a higher credit score than you may help you qualify for lower rates or a larger loan amount, but it comes with its own pros, cons, and risks. 

A company representative also confirmed that there is no minimum income needed to qualify for a personal loan. You will be required to submit documents to verify your income, however, and Upgrade may use your income when evaluating your application. Self-employed applicants may need to submit additional documents to verify income. 

If you already have a personal loan with Upgrade, you may still qualify for a second loan. Upgrade says it’ll look at a variety of factors to determine your eligibility.

Who Should Get an Upgrade Personal Loan

Like most personal loans, Upgrade loans can be used for a variety of purposes, from consolidating debt to paying for large expenses. Some things they can’t be used for include post-secondary education and student loans, investing, and gambling of any kind.

The long loan terms and high loan amounts available make Upgrade a good option for larger expenses, such as home improvements. However, it’s worth noting that qualifying for the larger loan values may be dependent on your creditworthiness. Upgrade’s minimum credit score requirement of 560 falls in the upper end of the “poor” range, according to credit bureau Experian, offering greater flexibility to borrowers with less-than-stellar credit. Upgrade also offers auto secured loans that use a borrower’s car as collateral, which can provide another option for borrowers who can’t qualify for an unsecured loan at a reasonable rate. Just be aware of the pros, cons, and risks of secured loans before taking one out.  

However, Upgrade’s APR range is higher than some competitors, like SoFi or LightStream, so if you have a good credit score, you may be able to get better rates elsewhere. 

Pro Tip

Upgrade doesn’t charge a prepayment penalty, so you’ll save money on interest if you can pay off your personal loan early.

Because Upgrade offers multiple financial products beyond personal loans — including a credit card, rewards checking account, and free credit monitoring services — it can be a good option for those who want a one-stop shop for all their financial needs. In addition, customers who have a rewards checking account may be eligible for up to 20% lower rates on Upgrade loans and cards. While there are some benefits to having multiple Upgrade products, you should always evaluate each product individually before signing up to decide if it’s right for you. 

How to Apply for an Upgrade Loan

If you’ve decided that an Upgrade loan is right for you, here’s how to apply for one:

  1. Check your rate. You can check your rate on Upgrade’s website before you officially apply. You’ll need to provide some personal information like name, address, and income. Upgrade will perform a soft credit check, which won’t impact your credit score. 
  2. Choose your offer. After you’ve submitted your information, Upgrade will provide you with a list of loan offers that include amount, term, and rate. Choose the offer you want based on what’s available to you.
  3. Accept the offer and submit the required documents. Once you’ve accepted the offer you want, you’ll need to submit certain documents that verify your income and your identity. Examples of documents that you need to provide include copies of government issued IDs, recent pay stubs, and bank statements. Upgrade will provide a to-do list of tasks you need to complete or documents you need to provide to finalize your application. You can check on the status of your application through your Upgrade account
  4. Wait for your loan to fund. After you’ve accepted your offer and cleared the necessary verifications, you should receive your funds within one day. Funds paid directly to your creditors, if using a debt consolidation loan, may take up to two weeks to clear. Once your loan is funded, Upgrade will perform a hard credit inquiry which may affect your credit score.

Upgrade FAQs

Is Upgrade good for personal loans?

Upgrade offers personal loans with a wide variety of loan terms, no prepayment penalties, and comparatively lenient credit score requirements, making the lender a flexible option for borrowers with poor or fair credit. However, its APR range is higher than several competitors, so those with a good credit score may be able to find better rates elsewhere.

What credit score do you need for an Upgrade loan?

The minimum credit score required by Upgrade is 560, making this a good option for borrowers with fair or poor credit. However, Upgrade will evaluate your credit score and income when determining your rate, and the lowest rates are only available to the most creditworthy borrowers.

Can you get an Upgrade personal loan with bad credit?

Upgrade’s minimum credit score requirement is 560, which is on the upper end of the “poor” range, according to credit bureau Experian. Borrowers with bad credit may qualify for an Upgrade loan, although Upgrade will look at multiple factors, including income and credit history, when evaluating applications. Be aware that those with a low credit score may not qualify for the best rates. Since Upgrade offers pre-approval, you can easily check your eligibility and rate without submitting a formal application.

Does an Upgrade loan hurt your credit?

While you can get pre-approved with a soft credit check that won’t affect your credit score, a formal application to Upgrade will cause a small but temporary dip in your credit score. However, like with any personal loan, making on-time payments could improve your credit score. You can also monitor your credit score with Upgrade’s free credit health tools.

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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