Is Upstart predatory?
What the hell is this. 12% origination fees? How predatory is this? This is about 30% APr for personal loan. Interest is fine and can be high for risky credit but 12% origination fees? Wtf #finance #upstart #loan
Last time I used them they wouldnāt let me pay into the principal. Never using them again even as a last resort.
Your assumptions about the business model would lead anyone to believe the statement above is true but since Upstart doesnāt actually hold the loan they do not actually make money from APR the bank the loan is sold to does. The only part the is true about your assumption is that origination fee that Upstart collects since it originated the loan. Which is standard business practice for any loan underwriter/originator. Understanding and knowledge is key. The assumption lacked actual understanding of Upstarts business.
I understand the business and how the company makes money. Iām sure they sell the loan with a margin depending on the risk profile and appetite. That being said, 12% origination fees is just outright predatory. That is what Iām trying to see.
We donāt sell the loan as we never owned it in the first place. The lending partner owns the loan which we originated for them
How bad you need money? SOFI and discover offer the bestā®ļø
Yeah. I got funded through lending club luckily. Was less than half the APr
You have shared a single pricing, and for a very very high personal loan amount. Unsecured loans at high dollar amounts are inherently risky. Lots of factors go into pricing, and it's silly to extrapolate from a single pricing. We always try to show an offer when we can, and our pricing engine gives folks the ability to fine tune the deal. We tend to have significantly better offers than competitors for folks that traditionally have had a hard time gaining access to affordable credit. I believe a fair bit of this data is shared publicly and part of our marketing to potential lenders
Unsecured loans are definitely risky and Iām aware of that. Risk is inherently transferred to the loan originator I assume with a percentage share or time period risk. Luckily, I secured a loan with lending club with a way better rate and origination fee.
Yes
Who has the inferior model? @upstart or @lendingclub
Very predatory.
Yeah. This was just to much. 5% is reasonable but 12. Wtf. :(