Upstart and LendingClub are two fintech lenders that disrupted personal lending — Upstart with AI-powered underwriting, LendingClub as the pioneer of marketplace lending (now a full bank). Both serve borrowers who might struggle to qualify at traditional banks, but they take very different approaches. Upstart uses artificial intelligence to evaluate creditworthiness, while LendingClub leverages its banking infrastructure. Here’s how they compare.
TL;DR:Upstart is better for borrowers with thin credit files, recent graduates, and anyone whose FICO score doesn’t reflect their true creditworthiness — its AI model looks at education and career factors. LendingClub is better for debt consolidation (direct pay to creditors), joint applications, and borrowers who want a real bank behind their loan.
The origination fee significantly impacts true cost. Here’s the real comparison:
Scenario
Upstart
LendingClub
Excellent credit
APR
7.80%
8.98%
Origination fee
0% ($0)
3% ($300)
Amount received
$10,000
$9,700
Monthly payment
$313
$317
Total paid
$11,268
$11,412
True cost
$1,268
$1,712
Good credit
APR
12.50%
11.98%
Origination fee
4% ($400)
5% ($500)
Amount received
$9,600
$9,500
Monthly payment
$335
$332
Total paid
$12,060
$11,952
True cost
$2,460
$2,452
Fair credit
APR
22.00%
20.98%
Origination fee
8% ($800)
7% ($700)
Amount received
$9,200
$9,300
Monthly payment
$388
$380
Total paid
$13,968
$13,680
True cost
$4,768
$4,380
At the top and bottom of the credit spectrum, Upstart tends to win. In the middle (good to fair credit), LendingClub is often cheaper when you factor in origination fees.
AI Underwriting: Upstart’s Key Differentiator
What Upstart’s AI Evaluates
Traditional Factors
Upstart AI Factors
Credit score (FICO)
Credit score + 1,600 additional variables
Income
Income + earning potential based on field
Debt-to-income ratio
DTI + cost of living in your area
Credit history length
Education level + graduation year
—
Field of study + school attended
—
Employment history + job type
—
Area of residence + local economy
—
Behavioral data + transaction patterns
Who Benefits Most from AI Underwriting
Borrower Profile
Traditional Lender
Upstart
Improvement
Recent graduate, no credit history
Likely denied
Approved (education weighed)
Access to credit
Good income, low FICO (thin file)
High rate or denied
Lower rate (income weighed)
Rate savings
New to US, limited credit
Likely denied
May qualify (holistic review)
Access
Stable career, past credit issues
Very high rate
Moderate rate possible
Potential savings
Excellent FICO, traditional profile
Low rate
Low rate
No difference
Upstart’s AI is most valuable for borrowers whose FICO score doesn’t tell the full story. If you have a strong income, good education, and stable employment but a thin credit file or past credit issues, Upstart may offer significantly better terms than traditional lenders.
Debt Consolidation
Feature
Upstart
LendingClub
Debt consolidation eligible
✓
✓
Direct pay to creditors
✗
✓
Balance transfer tracking
✗
✓
Consolidation-specific features
None
Purpose-built
Funds to your account
✓
✓ (or direct pay)
LendingClub’s direct creditor payment feature is a genuine advantage for debt consolidation. They’ll send loan proceeds directly to your credit card companies, ensuring the funds are used for their intended purpose. This is especially valuable if you’re concerned about self-discipline — the money never sits in your checking account.
Joint Loan Options
Feature
Upstart
LendingClub
Joint application
✗
✓
Co-signer option
✗
✓ (joint applicant)
Benefits
—
Better rate, higher approval odds
Both parties responsible
—
Yes (both on the hook)
LendingClub allows joint applications — both borrowers’ income and credit are considered, which can improve approval odds and lower rates. Upstart is individual-only.
Funding Speed
Milestone
Upstart
LendingClub
Pre-qualification
Instant (soft pull)
Instant (soft pull)
Full application
5-10 minutes
10-15 minutes
Approval decision
Instant (AI-powered)
1-3 business days
Funding after acceptance
1 business day
2-4 business days
Total time from application to funds
1-2 business days
3-7 business days
Upstart’s AI delivers near-instant decisions and next-day funding — significantly faster than LendingClub.
Customer Experience
Metric
Upstart
LendingClub
BBB rating
A+
A+
Trustpilot rating
4.6/5
4.0/5
CFPB complaints (per $1B lent)
Below average
Average
Repeat borrower rate
High
Moderate
Mobile app
✓
✓
Customer service
Phone, email
Phone, email, chat
Service hours
Mon-Fri 9am-8pm ET
Mon-Fri 9am-6pm ET
Upstart has significantly higher customer satisfaction scores, likely driven by its fast approval process and AI-driven rates that often surprise borrowers favorably.
WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy
