Due to growing consumer demand, the personal lending space continues to expand, making it increasingly difficult to compare and contrast companies. The market is dominated by a host of online-only lending platforms offering easy access and the best interest rates with little else to differentiate them. Two of the faster growing companies – 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 online lending platform 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 the lowest APR currently available at 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 repayment terms 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.
To qualify, borrowers must be a U.S. citizen at least 18 years old. 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). 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. Upstart 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.
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.
Author: Jeff Gitlen
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