Due to growing consumer demand, the personal lending space continues to expand, making it increasingly difficult to compare and contrast lenders. The market is dominated by a host of online-only lenders offering easy access and the best interest rates with little else to differentiate them. Two of the faster growing lenders – Best Egg and Upstart – offer very similar rates and terms, but upon closer examination, it’s clear they cater to very different types of borrowers.
Best Egg vs. Upstart: Comparison
|Rates (APR)||5.99% – 29.99%||8.69% – 29.99%|
|Loan Terms||3 – 5 years||3 or 5 years|
|Loan Amounts||$2,000 – $35,000||$1,000 – $50,000|
|Origination Fees||0.99% – 5.99%||0% – 8%|
Personal Loan Essentials
Best Egg is a Delaware-based lender with more than $4 billion in loan originations. The best way to describe its approach to lending is “straightforward” – not a lot of extras and very transparent. Best Egg offers unsecured personal loans between $2,000 and $35,000. Creditworthy borrowers can qualify for up to $50,000, and the lowest APR currently available is 5.99%.
Depending on the loan amount, loan term, and the credit standing of the borrower, the APR can range up to 29.99%. The average loan amount for a Best Egg borrower is $15,000, and the average APR is 15 percent. Borrowers can choose between a three-year term and a five-year term.
Best Egg does charge an origination fee, which is deducted from the loan proceeds. The fee ranges from 0.99 percent and 5.99 percent depending on the state, loan amount, and creditworthiness of the borrower. The only other fees Best Egg charges are a $15 late payment fee and a $15 returned payment fee, both lower than the typical fees charged by other lenders.
To qualify, borrowers must be a U.S. citizen at least 18 years old. Although there is no annual income requirement, and the minimum credit score requirement is 640, it takes $100,000 of income and a 700 credit score to qualify for Best Egg’s lowest rates. Borrowers with incomes over $150,000 can qualify for a $50,000 loan. The average credit score for Best Egg borrowers is 700 with an average credit history of seven years.
The application process is quick, easy, and straightforward. You provide your email address, Social Security number, contact information, and basic information about your income and Best Egg will respond with a decision in a matter of minutes. Funding is also quick – the next day in most cases. Best Egg only does a soft pull on your credit so applying will not affect your credit score.
Ideal Borrower Profile for a Best Egg Personal Loan
Generally, Best Egg would be a good fit for borrowers with a high income and good credit scores who want to consolidate high interest debt. If you can’t qualify for its lower rates and origination fees, there is no real advantage to a Best Egg loan.
Personal Loan Essentials
Upstart is similar to Best Egg in several ways – offering a similar APR range (8.69% – 29.99%), similar loan terms (three or five years), and fees (0 – 8 percent origination fees, and $15 late payment and returned payment fees). The average APR for Upstart borrowers is 16 percent. But, that is where the similarities end. Upstart actually has an interesting value proposition – to allow borrowers with thin or non-existent credit histories obtain financing on reasonable terms and then helping them build their credit.
Upstart is a part of the new generation of online-only lending platforms that relies less on credit scores and more on other data points to qualify borrowers. The minimum income requirement for a loan is just $12,000, but Upstart also weighs a borrower’s educational background and career potential in determining creditworthiness. The company utilizes proprietary algorithms to assess factors such as the type of college degree, areas of study, and earning potential. Upstart requires a minimum credit score of 620, however Upstart considers other factors in addition to credit score.
The application process is quick and easy with approval in minutes, and funds typically available the next day.
Ideal Borrower Profile for an Upstart Personal Loan
Upstart is especially appealing to young credit builders who are working towards a promising career. While SoFi and Earnest are two top competitors who also consider your educational background and career potential, they both require much higher credit scores.
Best Egg vs. Upstart: Final Thoughts
Qualified borrowers (good credit score and high income) can get a lower rate with a Best Egg loan, but Upstart is the place to go for credit novices with a high earning potential.
Best Egg Disclosures
To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you.
The Annual Percentage Rate (APR) is the cost of credit as a yearly rate and ranges from 5.99%-29.99%, which may include an origination fee from 0.99%–5.99% that is deducted from loan proceeds. Any origination fee on a loan term 5-years or longer will be at least 4.99%. The APR offered will depend on your credit score, income, debt payment obligations, loan amount, loan term, credit usage history and other factors, and therefore may be higher than our lowest advertised rate. Requests for the highest loan amount may result in an APR higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest rate. Best Egg loans are unsecured personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. Equal Housing Lender. “Best Egg” is a trademark of Marlette Funding LLC. All uses of “Best Egg” on this site mean and shall refer to “the Best Egg personal loan” and/or “Best Egg on behalf of Cross River Bank, as originator of the Best Egg personal loan,” as applicable. Loan amounts generally range from $2,000-$35,000. Offers up to $50,000 may be available for qualified customers who receive offer codes in the mail. The minimum individual annual income needed to qualify for a loan of $50,000 is $130,000. Borrowers may hold no more than two open Best Egg loans at any given time. In order to be eligible for a second Best Egg loan, your existing Best Egg loan must have been open for at least six months. Total existing Best Egg loan balances must not exceed $50,000. All loans in MA must exceed $6,000; in NM, OH must exceed $5,000; in GA must exceed $3,000. Borrowers should refer to their loan agreement for specific terms and conditions. Your verifiable income must support your ability to repay your loan. Upon loan funding, the timing of available funds may vary depending upon your bank’s policies. To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you.
Author: Jeff Gitlen
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