Upgrade Bad Credit Loan Review

Upgrade is a direct lending company that extends loans in a traditional style using their partnership with WebBank.

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    The founders of the company, Soul Htite and Renaud LaPlanche, are the co-founders of LendingClub. Htite also founded Dianrong, one of the largest marketplace lending platforms in China.

    The reputation of the founders speaks volumes about their new venture. The reviews and customer sentiments thus far only serve to support this. The company suffered very few complaints, and now, it boasts many satisfied borrowers.

    Upgrade started operating in April 2017, and its offers include personal loans, credit lines, and credit monitoring software, with plans of expanding in the future. Another planned venture for their future is becoming a resource for credit improvement aid.

    As CEO LaPlanche says, they offer a more comprehensive service than similar lenders. That's true due to the fact they combine loans with credit monitoring, education features, and alerts.

    While Upgrade does reward its users for good credit, they cater to a wide range of credit scores and customers. So, even if you have a bad (or no) credit history, they might be right for you. Read on, and we'll help you decide.

    Upgrade Financial Terms in a Glimpse

    Loan Amounts$1,000 - $50,000
    Term Length
    36 - 60 months
    Loan Rates
    6.98% - 35.89% APR
    Min Credit Score
    600
    Better Business Bureau RatingA+
    Time to Funding
    Same Business Day

    Upgrade Highlights

    What differentiates Upgrade from their competition is the mission they set for themselves. They want to help people manage, and ultimately, improve their credit.

    So, even if they deny your application, they will provide you with some support. However, here is what you'll get to enjoy if Upgrade accepts you.

    Pre-Qualification With Soft Credit Pull

    With Upgrade, you may check your rate and the offers available to you with a soft credit pull. This feature means that you can do some window shopping without suffering an impact on your credit score.

    Remember that, if you accept the offer, this will trigger a hard pull and all its side-effects, though.

    High DTI Ratio Allowed

    This company allows for a quite high DTI or debt-to-income ratio for their borrowers. You calculate this by dividing your monthly debt payments by your income. Upgrade provides loans to customers with a 60% or better ratio.

    Line Of Credit

    The company also offers a personal line of credit, which is a unique product in the world of online lending.

    This alternative allows you to use your loan like a credit card. The lender will approve the total amount, up to $50,000 in Upgrade's case, at once. You will only pay interest on the amount you use.

    Repayment terms for the line of credit vary from a year to five years, and advances come with fixed annual rates.

    Credit Health Tools

    As we mentioned, one of the goals of this company is to help consumers understand and improve their credit scores. Their credit health tools include credit monitoring, a credit simulator, various alerts, as well as free access to educational content in the form of blogs.

    Hardship Programs

    If, after you get a loan, you experience sudden hardship (loss of a job, death in the family, home disaster), you may qualify for the hardship program.

    The perks include temporary reduction of your monthly payment or permanent modification of the loan, extending the repayment terms.

    No Prepayment Penalty

    A prepayment penalty charges you for paying off your loan early. Some loans are not subject to these fees, so check when you take out a loan to see if this is an issue.

    However, Upgrade doesn’t charge prepayment penalties for most of their deals, which means that, if you happen to earn more than you expect, you may pay off more of your debt, avoiding some of the interest.

    Note: if you repay a part of your loan early, there will be no consequences. However, being late with your repayments does trigger a penalty.

    Unsecured Loans

    The structure of personal loans with Upgrade is pretty standard. All loans are unsecured, so they won't ask for collateral to ensure you repay your debt.

    Upgrade Fees

    New visitors to the website can check their rates online before they apply. The process is straightforward and takes a few short minutes on their website. Upgrade charges an origination fee as compensation for putting the loan in place, and this ranges from 1.5% to 6% of the loan value.

    If you want to qualify and get a loan with this lender, you'll need to meet the following criteria:

    • A minimum credit score of 600.
    • No minimum annual income, but most of the applicants who get accepted earn over $30,000 a year.
    • A minimum monthly free cash flow of $800.
    • As mentioned, the maximum debt-to-income ratio must be 60% or better.

    The company will accept co-signers as long as they meet the minimum credit score requirements.

    Unfortunately, these services aren't available to borrowers in Iowa, Colorado, Vermont, Maryland, and West Virginia. Residents of other states are free to take advantage of them.

    If you do qualify, apply for an amount that works for you. After that, there will be a hard credit pull, and Upgrade will deliver the money to your bank account within the same workday.

    General Conditions for Applicants

    Since the application process to Upgrade is online, you won't need to visit any particular office to get a loan. As we discussed, you'll get to enjoy fixed interest rates, pay an origination fee, and provide no collateral.

    However, besides the qualification conditions we discussed above, there are some general conditions you need to fulfill to get a loan. They include the following:

    • Your age needs to be 18 or older. Some states, such as Alabama, raised this minimum to 19 years old. So, it will depend on your residence.
    • You need to be either a US citizen, a permanent resident, or a person living in the US with a visa (you'll need to show your valid documentation in this case). Plus, you must live in one of the 50 states, excluding the ones we mentioned above.
    • You need to have a valid bank account
    • You need to provide a valid email address

    Once you provide this documentation, Upgrade will check all the information, including your income, credit history, previous usage, and everything else discussed above.

    Bottom Line

    Upgrade may not be the best choice on the market when it comes to terms and rates, but for those of us with bad credit, they could be what you need for your finances. It is essential to be aware of your repayment capability as taking out loans that you can’t pay back could see you in further financial trouble.

    If you need to consolidate and build for the future, Upgrade could be the service you need to get your credit rating back on track. Make sure you check out where the best deals are before you apply for finance.