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.
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We like that Universal Credit's flexible credit requirements and that personal loans can be used for business purposes. It does charge an origination fee, which means you get less of your loan money.
- Low 560 credit score requirement
- Funds may be available as early as the next business day
- Discount for having debt consolidation loan payments sent directly to creditors
- High starting APR
- The origination fee can be high
Universal Credit pros and cons
- 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.
- 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.
We like that LightStream offers competitive APRs, no late or origination fees and long loan term options. But you can't prequalify and the loan minimum may be too high if you only need to borrow a small amount.
- Same-day funding available.
- Loan amounts up to $100,000.
- No origination fee or late fee.
- The minimum loan amount is $5,000.
- Prequalification not available.
- No option to pay your creditors directly.
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 is worth considering if you have good-to-excellent credit and want a straightforward personal loan with competitive rates and few fees. We like that you don't have to be a PenFed member to apply — you can join during the application process.
- Approves loans as small as $600.
- Membership available with a $5 deposit in a savings account.
- Can pick up a physical check at a branch.
- Can apply with a co-borrower.
- Maximum loan amount is $50,000.
- Generally need good to excellent credit.
- Most branches are in D.C., Maryland and Virginia.
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.
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