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In today’s growing financial market, non-traditional lenders are becoming a feasible option for many consumers who need access to cash but don’t want to or can’t go through the bank-lending process.
Upstart and SoFi represent two alternative lenders, both of which offer personal, unsecured loans to those who meet eligibility requirements.
The biggest difference between the two lenders is that SoFi targets borrowers with good credit while Upstart targets borrowers with fair to bad credit.
In this comparison:
Upstart vs. SoFi: At a glance
|Rates (APR)||8.69% – 29.99%1||5.74% – 16.99%|
|Min Credit Score||600||660|
|Loan Amounts||$1,000 – $50,0002||$5,000 – $100,000|
|Fees||Origination fee: 0% – 8%|
Prepayment penalty: None
|No origination fee or prepayment penalty|
SoFi vs Upstart: Which lender is right for you?
Both SoFi and Upstart offer qualified applicants access to several lending products, including personal loans.
If approved for a personal loan from either lender, you can cover a variety of expenses, including medical bills, weddings and events, automobile financing, and debt consolidation. Both lenders also offer an easy online application process, rate quotes, and fast funding.
You can learn more about both options in our full reviews:
However, there are significant differences between the two lenders, the likes of which may make one more suitable for your needs or current circumstances.
To help you determine which is right for your situation, here are a few scenarios where one lender might make more sense than the other.
- If you need to borrow a large amount
- If you have good credit
- If you have fair credit
- If you already use other SoFi products
- If you live in West Virginia
- If you’re looking for career coaching
- If you’re a visa holder
- If you want a “fee-free” loan
If you need to borrow more than $50,000
If you need to borrow more than $50,000, then SoFi is likely your best bet. With a SoFi personal loan, you can borrow anywhere between $5,000 and $100,000. Upstart, on the other hand, caps loans at $50,0002.
If you have good credit
If you have good credit, then you may be able to score a better deal through SoFi. SoFi’s minimum credit score is 660, which is substantially higher than Upstart’s minimum score requirement of 620. But Sofi’s rates are also lower than Upstart’s—if you can qualify.
If you have fair or bad credit
Contrary to the previous point, Upstart’s low minimum credit requirement of 620 means that even borrowers with fair or bad credit may still be eligible for a loan from the lender.
Upstart also looks at an applicant’s education and employment as well as their current and potential income, which is another perk if you have the potential to earn but are still working on your credit score.
If you already use other SoFi products
Existing SoFi customers can enjoy a 0.125% rate discount when they take out another loan. If you already use SoFi to finance your mortgage or student loans, then you may want to consider becoming a repeat customer to save on interest.
If you live in West Virginia
Though Upstart originates loans to citizens across the nation, West Virginia residents are out of luck. If this is your current state of residence, then SoFi will be your best option by default.
If you’re looking for career coaching
SoFi offers many membership benefits and resources, but one of the most attractive ones is career coaching.
As a SoFi customer, you get access to several career-building tools, including customized support through a career coach, personal branding tips, and assistance with finding a new job or transitioning to a new job or industry.
If you’re a visa holder
If you need a personal loan but are a visa holder, then SoFi will be the best option for you. SoFi will originate loans for eligible J-1, H1B, E-1, O-1, or TN visa holders.
Only applicants with valid social security numbers will be eligible for loans through Upstart.
If you want a “fee-free” loan
If you don’t want to add any unnecessary fees to your loan, specifically origination fees, then SoFi is a better option. That’s because SoFi does not charge origination fees.
Borrowers who take out a loan with Upstart, however, may need to pay an origination fee between 0% – 10%.
SoFi vs. other lenders
You can also check out our guide to the best personal loan lenders to see which lenders ranked at the top.
1 The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 15% and 36 monthly payments of $33 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
2 Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.
Author: Jennifer Lobb