Artificial Intelligence-Driven Loans For Those With Fair Credit or Poor Credit
Upstart, a popular online lender, claims it is powered by artificial intelligence and makes affordable credit more accessible to borrowers using the power of technology. Upstart was founded by ex-Google employees and has facilitated $10.8 billion worth of loans with 71% fully automated. Upstart claims its personal loan interest rates for personal loans are 10% lower than traditional lenders. The lender claims it accepts 26% more applications because it can review non-traditional data. This means that borrowers new to credit may have a greater chance of qualifying than other lenders.
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How to Get a Personal Loan?
Although personal loans are a fast way to get cash, it is important to make wise decisions. Before you apply, it is important to plan how you will use the money and what you will do with the money. Compare multiple lenders to get the best interest rates and terms.
Keep in mind that your interest rate could differ from advertised rates when you shop for lenders. Rates and loan terms are determined by factors such as your credit score, income and amount of loan. You may be able to pre-qualify for a loan, or get a rate estimate with a soft credit inquiry. This won’t impact your credit score. It is important to check the fees that you will pay, such as prepayment penalties and origination fees. These fees can have an impact on the cost of your loan.
Alternatives to Personal Loans
A personal loan is a great way to pay for expenses but it’s not your only option. Personal loans can be used in lieu of a personal loan.
You could cash-out refinance your home to get some cash. You might also consider a home equity loan, or a home equity credit line of credit, if you have recently seen your home’s value rise. Before you move forward, make sure to understand the pros and cons associated with a HELOC.
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Balance transfer credit cards: This credit card allows you transfer unpaid debts to a credit line. They usually have a 0% introductory rate for a period of approximately 15 to 18 months. This is a great option to consolidate multiple debts such as personal loans and credit card balances. Make sure to check the fees and devise a plan for paying off the debt by the end of the promotional period. Otherwise, you will be charged a high interest rate on the balance.
How do you qualify for an upstart loan?
You must have a minimum credit score of 600 to be eligible for an Upstart personal loan. According to Experian credit bureau, this is considered “fair credit.” This lender may still approve you if you are new to credit. Upstart will also review your credit reports. If you have had at least six hard inquiries in the last six months (not including student loan inquiries or vehicle loans inquiries), then you might not be eligible. Even if you meet all the requirements, a lower score could mean a higher interest rate.
You’ll need to be able to:
- You must be at least 18 years of age (or 19 in Alabama or Nebraska).
- You must reside in the United States (except West Virginia or Iowa) and possess a Social Security Number
A personal bank account in the U.S
Upstart will not accept a cosigner for a loan. Your application will only be evaluated if you provide your personal information.
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Who should get an upstart loan?
Upstart personal loans are a good choice if your credit score is 600 or higher. A clean credit history, with regular payments, no bankruptcies and very few hard inquiries is required.
Personal loans are used to finance large purchases, consolidate debt or pay unexpected bills. These personal loans are great for people with good credit and fair credit. Upstart loans are not recommended for those who have lost their source of income recently. You will need to prove that you have a job and earn money.
How to apply for an upstart loan?
1. Calculate how much money you will need to borrow
Knowing how much money you have available each month will allow you to avoid borrowing too much. Understanding the amount of your monthly payments can also help you decide the best term for you. While a shorter term will result in higher monthly payments and lower interest, you’ll still pay less overall. Upstart can offer loan amounts between $1,000 to $50,000, with terms of three to five years. Some lenders may offer different loan terms and ranges.
2. Online prequalification
Upstart lets you check your interest rates online. This won’t affect your credit score. This will give you an idea of the amount you can borrow, your interest rate, and the term of your loan. To get the best rate, we recommend getting rates quotes from several lenders.
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3. Submit your application
Once you are ready to apply for an Upstart personal loans, you will fill out the application. You’ll also need to submit any documentation such as a photo ID and proof of income. Upstart will conduct a credit check on you at this stage. This may cause your credit score to drop by a few points.