Upgrade is a financial services company that provides personal loans, credit lines, and rewards checking accounts. Within the personal loan market, Upgrade is known for its high level of application flexibility, specifically through support for joint applications and direct-to-creditor payment options for debt consolidation.
The platform targets a broad spectrum of borrowers, including those with fair to good credit.
At a glance
- Lender: Upgrade, Inc. (Partnered with Cross River Bank and WebBank).
- Loan Amount: $1,000 to $50,000.
- APR Range: 8.5% to 35.9%.
- Origination Fee: 1.85% to 9.99%.
- Minimum Credit Score: Generally 580+.
Joint application mechanism
One of Upgrade’s primary structural advantages is the ability to add a co-applicant to a loan request.
- Income Pooling: Upgrade allows two individuals to pool their income on a single application. This can help borrowers who might not qualify individually due to high debt-to-income (DTI) ratios.
- Credit Strengthening: If one applicant has a significantly better credit score or history than the other, the joint score can lower the interest rate for the entire loan.
- Legal Obligation: Both parties are equally responsible for the repayment of the loan, and the debt appears on both individuals’ credit reports.
Direct-to-Creditor payment logic
For borrowers using loans for debt consolidation, Upgrade offers an automated “Direct Pay” feature.
When a borrower selects this option:
- Selection: The user identifies the credit card accounts or other debts they wish to pay off.
- Disbursement: Rather than sending the funds to the borrower’s personal checking account, Upgrade sends the funds directly to the specified creditors.
- Incentive: In many cases, using the direct-to-creditor option triggers a lower interest rate offer (APR discount) compared to a standard cash-disbursement loan.
This mechanism ensures that the loan proceeds are used specifically for the intended consolidation, reducing the risk of “re-leveraging” for the lender.
Costs and fee structure
Upgrade’s pricing model relies on a combination of risk-based interest and upfront fees.
- Origination Fee: A one-time fee ranging from 1.85% to 9.99% is deducted from the loan proceeds. For a $10,000 loan with a 5% fee, the borrower receives $9,500.
- Monthly Repayment: Loans are amortized over 24 to 84 months.
- Prepayment: Upgrade does not charge prepayment penalties. Borrowers can pay off the balance early at any time to avoid further interest accrual.
Eligibility and constraints
Upgrade’s platform has specific guardrails for applicants:
- Cash Flow: Underwriting requires a minimum amount of “free cash flow” each month after all other debt obligations are met.
- State Availability: Available in most U.S. states, though terms and loan amounts vary by local regulation (e.g., higher minimums in Georgia and Massachusetts).
- Loan Limits: Maximum of $50,000, which is higher than fair-credit competitors like LendingPoint but lower than prime-specialists like LightStream.
See also: Upstart Review, LendingPoint Review, Personal Loan Comparison
