Upgrade Inc. is a famous fintech company that offers unique financial products, business solutions, and a variety of credit cards with unique hybrid functionality. The company also offers personal loans ranging from $1,000 to $50,000.
Before we delve into the types of loans that Upgrade offers, let’s first understand the main types of personal loans that lending companies or banks offer.
Difference Between Secured and Unsecured Personal Loans:
1- Secured Personal Loan
These types of loans are asset protected. It means that the applicant has to keep something valuable like property, shares, etc. in the form of collateral against the loan.
This is the reason why secured personal loans have a lesser risk for the lending company. If the borrower fails to repay the debt by the end of their term, the lending company automatically becomes authorized to claim the borrower’s collateral as their own.
This asset protection gives security to the lending company. And that is the reason why the interest rates are considerably lower than unsecured loans, and the repayment terms are usually longer.
Lenders often do not charge an origination fee also for these loans, and it’s all because of the collateral that they keep as security.
Another important thing to remember is that secured personal loans are usually higher amounts than the borrower requires for business investment, home expansion, etc. Home equity and home equity credit lines can also be included in these loans.
2- Unsecured Personal Loan
Unsecured Personal Loans are not asset protected. It means that the borrower does not necessarily need to put anything in the form of collateral against the loan they are borrowing from the lender.
Now, these types of loans are riskier for lending companies. Because there is no security for them in case the borrower fails to repay the loan within their repayment term.
Since there is no security for the lenders, the interest rates are higher than secured personal loans and the repayment terms are shorter too. Especially when compared against secured personal loans.
Because of the same fact, the lenders also charge an origination fee, since there is no other solid security or guarantee factor for them in the form of collateral.
Unsecured personal loans come with a lower borrowing limit too, as compared to secured personal loans.
Student loans, credit lines, credit cards, home improvement loans, and signature loans are all included in the unsecured personal loans category.
Upgrade Personal Loan Offers:
1- Upgrade Unsecured Personal Loans
The personal loans that Upgrade offers are mainly Unsecured. But the best thing about Upgrade’s offers is that they are available even for people who have fair credit scores.
Usually, lending companies offer personal loans to people with good to excellent credit scores only. But with Upgrade, anyone with a fair to excellent score can easily apply for it.
Secondly, these loans are not asset protected and have easier repayment terms ranging from 24 to 84 months.
2- Upgrade Secured Personal Loans
In some cases, Upgrade offers the option of secured personal loans too to some of its borrowers. When the company receives an application for a loan, they carry out a thorough background check. And after that, if they deem fit, they offer the applicant to opt for a secured personal loan. In this case, the company keeps the applicant’s vehicle as collateral. This is called a “secured auto loan.
Where can Upgrade personal loans be used?
Upgrade personal loans, especially the unsecured ones can be used for:
- Home Improvement
- Home Renovation
- Debt consolidation
- Medical/health loans
- For major purchases
Where can Upgrade personal loans be not used?
Upgrade personal loans have some limitations. They cannot be used for:
- High school/college tuition fee
- Post-secondary college fee
- Hostel/ lodging expenses
- Personal loan refinancing
- Upgrade operates in all the states of the US except for Washington D.C.
Frequently Asked Questions:
1- Does Upgrade charge an origination fee for personal loans?
Yes. For Upgrade’s unsecured personal loans, there is an origination fee of 2.9% to 8%.
2- Is it difficult to apply for an Upgrade Personal Loan?
Not at all! It is actually quite simple. All you have to do is to:
- Go to the official website
- Enter your desired amount of loan
- Some basic questions will be asked that you will have to answer
- Once all that is done, you can click “Check your rate”
When you do this, Upgrade will carry out a soft inquiry about your credit. It will not negatively impact your credit scores.
If you meet the minimum borrowing requirements of the company, you will then be sent an offer. At this point, you will be required to submit a formal application.
Upgrade will also give you different loan options and you can choose the one that is most suitable for you.
Once you accept an offer, you will then be subjected to a hard inquiry or a hard pull. This will impact your credit scores too, and they may come down temporarily. But do not worry because if approved, the company will issue your loan, and you will be funded within 1 to 4 working days.
3- Does it take very long to get pre-approved for the loan?
Not really. The company takes a few days only to verify all your credentials and background. But once you are pre-approved, the rest of the loan funding process is very quick.
4- Who can qualify for an Upgrade Personal Loan?
- Anyone with a credit score of 560 and above can apply for this loan
- The applicant must have 2 credit accounts
- There is no minimal annual income requirement, so anyone can apply and get qualified
5- Does Upgrade allows other people to be added to a personal loan application?
Yes. Upgrade allows the applicants to add a co-borrower when they submit their application for a personal loan. Adding a co-borrower maximizes their chances to get pre-approved too. Also, these co-borrowers have the authority to access the proceeds of the loan too. This is a beneficial factor as compared to the companies that allow a co-signer to be added with the main borrower. A co-signer is usually not able to access the proceeds of the loan.
Jamie Johnson is a sought-after personal finance writer with bylines on prestigious personal finance sites such as Quicken Loans, Credit Karma, the U.S. Chamber of Commerce, Bankrate, and The Balance. Over the past five years, she’s devoted more than 10,000 hours of research and writing to topics like mortgages, loans, and small business lending.