Yes — Upstart is a Legitimate Lender
Upstart is a publicly traded company (NASDAQ: UPST) founded in 2012 and approved by the CFPB as a fair lending model. It has originated over $35 billion in loans and is one of the most innovative personal loan lenders for borrowers with limited credit history.
Pros
- ✅ Publicly traded (NASDAQ: UPST)
- ✅ CFPB-approved fair lending model
- ✅ Accepts 300+ credit score
- ✅ AI-powered approval considers education and employment
- ✅ $35B+ in loans originated
- ✅ Fast funding (1 business day)
Cons
- ❌ Origination fees up to 12%
- ❌ High APR for lower credit scores (up to 35.99%)
- ❌ No co-signer option
- ❌ Loan amounts limited to $50,000
- ❌ No rate discount for autopay
How Does Upstart Work?
Upstart uses artificial intelligence to evaluate loan applications beyond traditional credit scores. In addition to your FICO score, Upstart considers your education level, field of study, employment history, and income. This allows Upstart to approve borrowers that traditional lenders would reject — including those with credit scores as low as 300.
✓ Pros
- Fixed monthly payments
- Lower APR than credit cards
- No collateral required
- Fast funding (1–3 business days)
✗ Cons
- Origination fees (1–8%)
- Hard credit inquiry required
- Prepayment penalties possible
- Higher rates for bad credit
Is Upstart's Origination Fee Worth It?
Upstart charges an origination fee of 0%–12% of the loan amount, which is deducted from your loan proceeds. This is higher than no-fee lenders like SoFi and LightStream. However, for borrowers who can't qualify elsewhere, Upstart's origination fee is often worth paying to access a personal loan at a reasonable APR (vs. payday loans at 300%+ APR).
Has Upstart Had Any Regulatory Issues?
In 2023, the CFPB issued guidance on AI-based lending models, which Upstart has worked to address. Upstart is one of the few lenders to receive a no-action letter from the CFPB, meaning regulators have reviewed its model and found it does not violate fair lending laws.