Universal Credit may not be as well known as most other personal loan lenders out there, but it still offers a strong product for those with lower credit scores. Read on to learn more about Universal Credit’s personal loan.
Compare personal loan offers
Universal Credit Personal Loans
-
Annual Percentage Rate (APR)
-
Loan purpose
Debt consolidation, large purchases, business, home improvement and more
-
Loan amounts
-
Terms
-
Credit needed
Minimum credit score of 560
-
Origination fee
-
Early payoff penalty
-
Late fee
Pros
- No early payoff fees
- Offers funding as early as the next business day
- Low credit score requirement of 560
Cons
- Origination fee can be a bit high
Universal Credit pros and cons
Pros
- No early payoff fees: Borrowers won’t be charged a penalty for paying off their loan before the term ends.
- Credit score requirement: This lender considers credit scores as low as 560, making it an accessible loan option for those with low credit scores.
- Fast funding: Borrowers can receive funding as soon as the next business day.
Cons
- Origination fee: Universal Credit charges an origination fee that can range from 5.25% to 9.99%, which can be quite high compared to that of competitors.
How does Universal Credit work?
Universal Credit is a lender offering personal loans, which is a form of installment credit. That means you’ll borrow a lump sum of money and pay it back in fixed, equal increments (including interest) over a specified period.
Start by checking what estimated interest rate you qualify for with Universal Credit. You’ll need to submit a few pieces of information, like how much you’re borrowing and why, your contact information and more. This is free and won’t lower your credit score.
Once you know what rate you’ll qualify for with Universal Credit, you can repeat this process with other personal loan lenders and compare the rates. You should always evaluate multiple offers when shopping for a loan to get the best terms possible.
If you decide to go with Universal Credit, you can apply for the loan and, if approved, you should receive funding within one business day.
How much does Universal Credit cost?
Universal Credit charges an origination fee that can range from 5.25% to 9.99% and is deducted from your loan funding amount. According to the lender’s website, late payments may cause you to incur additional charges that increase your loan payment, but it doesn’t disclose the exact late fee amount.
If you want to pay off your loan early to save on interest, you’ll be happy that Universal Credit doesn’t charge a prepayment penalty.
How does Universal Credit compare?
Here’s how Universal Credit compares to other well-known personal loan lenders.
Universal Credit vs. LightStream
LightStream is known for offering loan amounts as high as $100,000. Universal Credit, by contrast, only offers funding amounts of up to $50,000.
And while Universal Credit considers credit scores as low as 560, LightStream requires good or excellent credit to qualify for funding.
So while LightStream can be an attractive option if you need to borrow more than what Universal Credit allows, you’ll still need to apply with a higher credit score.
LightStream Personal Loans
-
Annual Percentage Rate (APR)
6.99% – 25.49%* APR with AutoPay
-
Loan purpose
Debt consolidation, home improvement, auto financing, medical expenses, and others
-
Loan amounts
-
Terms
24 to 240 months* dependent on loan purpose
-
Credit needed
-
Origination fee
-
Early payoff penalty
-
Late fee
Terms apply. *AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Excellent credit required for lowest rate. Rates vary by loan purpose.
Pros
- Same-day funding available through ACH or wire transfer (conditions apply)
- Loan amounts up to $100,000
- No origination fees, no early payoff fees, no late fees
- LightStream plants a tree for every loan
Cons
- Requires several years of credit history
- No option to pay your creditors directly
- Not available for student loans or business loans
- No option for pre-approval on website (but pre-qualification is available on some third-party lending platforms)
Universal Credit vs. PenFed
PenFed offers loan funding amounts as low as $600 and as high as $50,000. Universal Credit funding amounts start at $1,000 so PenFed may be the better option for you if you need to borrow less than that.
PenFed also requires good or excellent credit for their personal loans and doesn’t charge an origination fee, unlike Universal Credit. So while Universal Credit is a better fit if you have a lower credit score, you may want to consider whether an origination fee is a dealbreaker for you.
PenFed Personal Loans
-
Annual Percentage Rate (APR)
-
Loan purpose
Debt consolidation, home improvement, medical expenses, auto financing and more
-
Loan amounts
-
Terms
-
Credit needed
-
Origination fee
-
Early payoff penalty
-
Late fee
Pros
- Credit union membership available to anyone
- Loans as low as $600
- Can pick up a physical at a branch
- May apply with a co-borrower
Cons
- Funds come as a physical check
- Must be a member to get funds (no membership needed to apply)
- Must pay for expedited shipping to get your funds next day
- Maximum loan amount of $50,000
- Late fee of $29
Is Universal Credit legit?
Universal Credit is owned by Upgrade, another prominent personal loan lender in the space. Universal Credit also has an A+ rating from the Better Business Bureau (BBB).
How to apply for a Universal Credit personal loan
Potential borrowers can apply for a personal loan through Universal Credit’s website.
FAQs
What is the easiest personal loan to get approved for?
Some of the easiest personal loans to get approved for are payday loans are loans that approve borrowers with low or no credit. Just keep in mind that you may be subject to higher interest rates.
Does a personal loan hurt your credit?
Applying for a personal loan may temporarily lower your credit since lenders will need to run a hard credit inquiry.
Can I spend my personal loan on anything?
Funds from a personal loan can be used for just about any purpose. However, some personal loan lenders have certain prohibited uses, which can include gambling and illegal activities. Some personal loan lenders may even prohibit fund use for educational or business purposes.
Subscribe to the CNBC Select Newsletter!
Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
