topic Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer? in General Credit Topics

Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

leo187um — Mon, 28 Nov 2022 14:03:51 GMT

My oldest opened credit card account is 1 year; trying to position myself the best I can to apply for Chase or Amex business credit cards with high limits in 6-9 months time. My FICO is 730+ across the three bureaus but my profile i young and have had a bunch of inquiries over the past year.

I have one personal loan outstanding with Upstart; is it a good idea to pay this off before applying?

I've been thinking about using my BoA card (6000 limit) to get a $2000 balance transfer for three consecutive months; 3% fee and 17% APR but still better than the 33% APR i pay on the upstart loan.

Would appreciate your suggestions as to what the best course of action for me to take given my goal of applying for a new credit card in 6-9 months?

Thank you.

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

SlideOrInsert — Mon, 28 Nov 2022 19:26:02 GMT

it is a good idea to pay off upstart because it is almost criminal.

33/100/12 * 7500 = $206.25 monthly in interest.
vs.
33/100/12 * (7500-5728) = $48.73 monthly interest.
17/100/12 * (5728*1.03) = $83.58 monthly in interest.

just do the balance transfer in one shot. 5728*1.03 = 5900 balance of 6000 limit. sure you "max" the card out, but that 33% is ruining progress. pay off the upstart remaining balance urgently.

17% is not great either, in your case I would be looking for 0% balance transfer cards. not sure why you are seeking business cards.

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

MileHigh96 — Mon, 28 Nov 2022 19:29:27 GMT

@leo187um wrote:
My oldest opened credit card account is 1 year; trying to position myself the best I can to apply for Chase or Amex business credit cards with high limits in 6-9 months time. My FICO is 730+ across the three bureaus but my profile i young and have had a bunch of inquiries over the past year.

I have one personal loan outstanding with Upstart; is it a good idea to pay this off before applying?
I've been thinking about using my BoA card (6000 limit) to get a $2000 balance transfer for three consecutive months; 3% fee and 17% APR but still better than the 33% APR i pay on the upstart loan.

Would appreciate your suggestions as to what the best course of action for me to take given my goal of applying for a new credit card in 6-9 months?

Thank you.

Another option would be to refinance it. I had the same issue with Lending Club. I had a personal loan with them last year and the interest rate was in the low 30% range. I looked around about refinancing it and I went with Upgrade and I was able to get a 12.53% APR with them versus that 30-something percent that I got with Lending Club.

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

leo187um — Mon, 28 Nov 2022 19:28:56 GMT

I have the money to pay it back now but wanted to see whether it makes sense to use the Bank of America card as i can transfer the balance without a hard inquiry. Using the full balance would kill my utilization and my credit score will drop.

I want business cards as they have high limits and don't affect your personal credit score (unless I default).

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

RSX — Mon, 28 Nov 2022 19:36:49 GMT

if you have the money to pay it off now, pay it down to 8%

wait for it to report - then app for the cards you want

once you get the cards, finish paying off the loan entirely

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

leo187um — Mon, 28 Nov 2022 19:46:54 GMT

Curious as to why only pay down until 8% rather than pay off the full balance? I need to garden anyways so it might be a smart move to use the BoA card transfer after my 0pct APR period ends in March 2023.

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

SlideOrInsert — Mon, 28 Nov 2022 19:47:02 GMT

@leo187um wrote:
I have the money to pay it back now but wanted to see whether it makes sense to use the Bank of America card as i can transfer the balance without a hard inquiry. Using the full balance would kill my utilization and my credit score will drop.

I want business cards as they have high limits and don't affect your personal credit score (unless I default).

"pay it back now" then and save yourself so much money in interest.

to build a relationship, deposit that monthly money saved into a deposit account for 6-9 months with whatever bank you might seek out a business card with.

finances > fico.

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

leo187um — Mon, 28 Nov 2022 19:52:16 GMT

I need time to garden and wait for past inquiries to roll off so don't see a rush to use 7.5k of capital to pay it off.. just thought it would be better to deposit more cash into chase and Amex and pay off the balance over a couple months..

It's not like I'm struggling with debt or anything..

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

RSX — Mon, 28 Nov 2022 20:06:16 GMT

the reason to drop it to 8% - then applying - then paying it fully off is because

1. if it is your only loan, you will take a hit for not having a loan in your credit mix

2. loans give a good point boost when they drop below 9%

so my plan above is to help you boost your score for 1-2 months - get your apps done while your score is higher (at the cost of 2 months interest)

then pay it off!

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

RSX — Mon, 28 Nov 2022 20:07:58 GMT

i call having $7500 at 33% struggling with debt......

when you pay it off, you will be able to build it back up fairly quickly, since you won't be wasting that @$200+ in interest loss

pay it off - then use the monthly amount you save on loan payments to build up your saving accts

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

SlideOrInsert — Mon, 28 Nov 2022 21:34:40 GMT

@leo187um wrote:
It's not like I'm struggling with debt or anything..

ah okay that makes anything rational...

so you're going to spend 33% on $7500 to keep $7500 "capital" in a deposit account where it earns <1% or more likely nothing? heck why not invest the capital in bitcoin or stonks.

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

leo187um — Tue, 29 Nov 2022 00:14:45 GMT

I was an expat and left the us when I was 21 (closed the credit card I had at the time since I didn't know any better).

Came back last year so had to start building credit from scratch. The personal loan was taken so I can boost my credit score. That takes precedence over the monthly payments I make which is not significant to me.

I feel that cash is better spent depositing into my chase, usbank, and Amex checkings/savings accounts to position myself better for higher limits.

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

Jnbmom — Tue, 29 Nov 2022 00:44:47 GMT

@leo187um wrote:
I was an expat and left the us when I was 21 (closed the credit card I had at the time since I didn't know any better).

Came back last year so had to start building credit from scratch. The personal loan was taken so I can boost my credit score. That takes precedence over the monthly payments I make which is not significant to me.

I feel that cash is better spent depositing into my chase, usbank, and Amex checkings/savings accounts to position myself better for higher limits.

Pay that off now 33% to have a loan report 😳 You could get a SSL to satisfy a loan reporting

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

leo187um — Tue, 29 Nov 2022 00:48:35 GMT

What is a SSL?
I am also not trying to get any more inquiries until I apply in 6-9 months time..

Will it be ok if my utilization on the boa card jumps for a month or two as long as I bring it back to 1-4pct in 6-9 months?

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

RSX — Tue, 29 Nov 2022 17:27:06 GMT

points lost by high utilization are gained back when the utilization drops

they are a snapshot in time

so yes, you can max the one card - lose a bunch of points - then as you pay it down, they will come back

you seem set on keeping that 33% loan, so i wont mention that one again

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

RSX — Tue, 29 Nov 2022 17:27:53 GMT

SSL =

https://www.bankrate.com/loans/personal-loans/what-is-a-shared-secured-loan/

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

leo187um — Tue, 29 Nov 2022 17:46:47 GMT

No just trying to understand the credit game better, if one time high utilization does not impact my application negatively 6-9 months done the road, then putting the max on my BoA card makes sense..

I am not as knowledgeable a you guys btw so just want to understand how these credit algorithms grade certain actions (one time I laid off my credit card balance off and my score tanked 100 pts which didn't make sense to me).

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

Remedios — Tue, 29 Nov 2022 18:20:43 GMT

In this thread you started you had two Opportun loans. Those loans would have had same or higher APR than this one

In fact, their website joyfully announces "no Apr higher than 35%"

Given your extremely short history, you would have been at the tail end of their range.

You got this one to pay off those other ones, meaning your interest was higher than 33% on those.

In that same thread, and multiple times in this thread you've mentioned having money to pay them off, but you'd rather "deposit" money so you can get credit card from Chase/Amex.

Are you really willing to pay thousands in interest to get puny credit card, because no credit card is worth what you're doing.

Why even bother with paying BT fee (in top of interest you already bleed, and 33% is bleeding money) if you can pay it off and be done?

I know you think you're building credit, my opinion is you're heading for financial ruin.

I don't need to be told how much money you got in the bank, with the moves you've been making - it won't be there.

You're literally two years into credit and already ...well, this.

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

SouthJamaica — Tue, 29 Nov 2022 18:40:00 GMT

@leo187um wrote:
I have the money to pay it back now but wanted to see whether it makes sense to use the Bank of America card as i can transfer the balance without a hard inquiry. Using the full balance would kill my utilization and my credit score will drop.

I want business cards as they have high limits and don't affect your personal credit score (unless I default).

If you have the money to pay it back now you should pay it back now. Period.

Re: Upstart personal loan $7500 outstanding 33% APR - worth getting a balance transfer?

SlideOrInsert — Tue, 29 Nov 2022 18:45:04 GMT

skimming through the other threads, OP has "133K of student loans outstanding (new installment loans report every 3 months or so)..." so the 33% upstart loan seems really unnecessarily expensive to inflate credit score via credit mix.

OP seems determined to follow their original decision contrary to the advice given in this and other threads. they were told there and here by multiple advisors that that 33% was an expensive loan.

many of us have made the credit mistakes and OP seems to want to repeat them despite the advice otherwise.

in any case, it is OP's money so the decision is theirs.

OP wants to build credit which is not a bad thing, but probably is not going about it in a practical way. I guess it is because:

@leo187um wrote:
It's not like I'm struggling with debt or anything..

only $140k at the moment.