Universal Credit personal loan review: Rate discounts for debt payoff

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In a Nutshell

Universal Credit offers personal loans for people with less-than-perfect credit. If you’re looking to consolidate debt, it may be a good option since Universal offers rate discounts if the loan pays off a certain percentage of your debt. But the loan has an origination fee, and if you have strong credit, you may be able to find lower rates elsewhere.

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Pros Cons
Rate discount for autopay and direct debt payoffs Origination fee
May receive funds quickly Other personal loan lenders offer lower rates
Small loan amounts available

What you need to know about a Universal Credit personal loan

Universal Credit is an online lender operated by Upgrade Inc., which also offers personal loans, credit lines and checking through Upgrade.

The lender says it aims to “provide you with access to credit when you need it most.” It offers personal loans between $1,000 and $25,000, though the amount may differ if you apply through Credit Karma.

While Universal Credit does charge an origination fee (that’s taken out of your loan funds), its loans come with fixed payments and no prepayment penalties. But it does charge late fees.

Rate discount for autopay and direct debt payoffs

There are two ways to lock in a rate discount with Universal Credit. One way is to sign up for autopay so that your monthly payments are automatically deducted from your bank account. The other option is to use at least half of your loan funds to pay off your credit cards or other loans.

That makes Universal Credit worth a look if you want to consolidate high-interest debt.

You may be able to find lower rates elsewhere

Universal Credit’s personal loans are best for people with less-than-perfect credit.

If you have strong credit, you’ll probably be able to find a lower interest rate with another lender. A lower rate can save you money over the life of your loan.

May receive funds quickly

Once you accept your loan offer, Universal Credit says it can send you the money within one business day as long as all “necessary verifications” are met. That’s good news if you need the cash soon.

But keep in mind that the exact timing will depend on your bank, and it could take longer.

Common question: Are Universal Credit personal loans available in all 50 states?

Universal Credit offers personal loans in most states, but there are a handful where they aren’t available: Iowa and West Virginia, as well as Washington, D.C. If you apply through Credit Karma, you may find other states where loans aren’t available.

How to apply with Universal Credit

To apply for a Universal Credit personal loan, you can first check your potential rate with a prequalification application, which won’t hurt your credit scores. Note that prequalification isn’t a guarantee of approval, and you may be offered different terms after completing a full application.

The lender says it may request documents to verify your income and identity during the loan review process.

If you’re prequalified and accept a loan offer, Universal Credit will perform a hard credit inquiry, which may affect your credit scores.

Not sure if Universal Credit is right for you? Consider these alternatives.

  • Avant personal loan: Avant may be a better fit if you’d like to choose between a secured and unsecured loan.
  • Upstart personal loan: If you want to borrow more money, an Upstart personal loan may be a good option.

About the author: Anna Baluch is a freelance personal finance writer from Cleveland, Ohio. You can find her work on sites like The Balance, Freedom Debt Relief, LendingTree and RateGenius. Anna has an MBA… Read more.