When comparing personal loan options from Upstart and SoFi, it’s important to consider several factors, including interest rates, loan terms, fees, and eligibility requirements. Both companies are popular in the personal loan market, but they cater to slightly different audiences and offer unique benefits. Here’s a detailed comparison to help you decide which lender might be the better choice for you.
1. Interest Rates
Upstart:
- Range: 5.4% to 35.99% APR.
- Factors: Upstart considers non-traditional factors like education, employment history, and income in addition to your credit score when determining interest rates. This can benefit borrowers with limited credit history but a strong overall profile.
SoFi:
- Range: 8.99% to 25.81% APR (with autopay discount).
- Factors: SoFi focuses on more traditional factors such as credit score and income, typically favoring borrowers with higher credit scores.
Verdict: Upstart offers a wider range of interest rates, which can be advantageous for those with a non-traditional credit profile. However, SoFi generally offers lower maximum interest rates, which might be better for borrowers with excellent credit.
2. Loan Amounts
Upstart:
- Loan Amounts: $1,000 to $50,000.
- Best For: Borrowers looking for smaller loans, especially those with a limited credit history.
SoFi:
- Loan Amounts: $5,000 to $100,000.
- Best For: Borrowers looking for larger loans, particularly those with strong credit profiles who need significant funding.
Verdict: SoFi is the better option if you need a larger loan, up to $100,000. Upstart is more flexible with smaller loan amounts, starting at $1,000.
3. Loan Terms
Upstart:
- Term Lengths: 3 to 5 years.
- Flexibility: Limited options, with only two loan terms available.
SoFi:
- Term Lengths: 2 to 7 years.
- Flexibility: More options for borrowers to choose a repayment period that fits their budget, ranging from short-term to long-term repayment plans.
Verdict: SoFi offers more flexibility in loan terms, making it a better choice for borrowers who want to customize their repayment plan.
4. Fees
Upstart:
- Origination Fee: 0% to 10% of the loan amount, deducted from the loan proceeds.
- Late Fees: Yes, typically $15 or 5% of the past due amount.
- Prepayment Penalty: None.
SoFi:
- Origination Fee: None.
- Late Fees: None.
- Prepayment Penalty: None.
Verdict: SoFi clearly wins in this category with no fees, including no origination fees and no late fees, making it a more cost-effective option.
5. Eligibility Requirements
Upstart:
- Minimum Credit Score: 300 (but other factors are heavily considered).
- Other Factors: Upstart takes into account your education, job history, and other non-credit factors, which can help those with a limited or less-than-perfect credit history.
- Best For: Borrowers with limited credit history or those who might benefit from a non-traditional underwriting process.
SoFi:
- Minimum Credit Score: 680.
- Other Factors: SoFi focuses on credit history, income, and other traditional financial metrics. SoFi also offers perks like unemployment protection.
- Best For: Borrowers with good to excellent credit who meet higher eligibility requirements.
Verdict: Upstart is more accessible for those with lower credit scores or a thin credit history, while SoFi is better suited for those with higher credit scores and strong financial profiles.
6. Customer Service and Perks
Upstart:
- Customer Support: Upstart offers standard customer service through phone and email.
- Perks: No major additional perks beyond the loan itself.
SoFi:
- Customer Support: SoFi offers robust customer support, including financial advisors and career coaching.
- Perks: SoFi provides additional perks such as unemployment protection, career coaching, financial planning, and access to community events.
Verdict: SoFi stands out with its extensive range of member benefits and customer support options, offering more than just a loan.
7. Speed of Funding
Upstart:
- Funding Time: Funds can be available as soon as the next business day after approval.
- Best For: Borrowers who need quick access to cash.
SoFi:
- Funding Time: Typically, SoFi funds loans within a few days of approval.
- Best For: Borrowers who are not in urgent need of funds and prefer a more thorough process.
Verdict: Upstart is better if you need funds quickly, often providing next-day funding.
Conclusion: Which is Better?
- Choose Upstart if: You have a lower credit score, limited credit history, or want to benefit from a lender that considers non-traditional factors in the approval process. Upstart is also a good choice if you need quick access to funds or a smaller loan amount.
- Choose SoFi if: You have a strong credit score, need a larger loan amount, or prefer a lender with no fees and added perks like unemployment protection and financial planning. SoFi is ideal for borrowers who value customer service and the additional benefits that come with being a SoFi member.
Both Upstart and SoFi offer valuable personal loan options, but the best choice depends on your individual financial situation, loan needs, and preferences.