Upgrade Unveils “Personal Credit Line” to Take on Credit Cards

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Upgrade Unveils “Personal Credit Line” to Take on Credit Cards

As hard as it may be to believe, it’s now been nearly two years since Lending Club founder Renaud Laplanche resigned from his former company following an internal probe into loans sold that reportedly ignored the buyer’s explicit instructions. Despite that controversy, Laplanche went on to start another FinTech venture he (perhaps pointedly) named Upgrade that focuses on personal loans. Today Upgrade took things a step further, launching their Personal Credit Line product — an offering Laplanche tells Bloomberg will challenge the dominance credit cards.

Upgrade’s Personal Credit Lines somewhat resemble HELOCs (home equity line of credit) except that they don’t require borrowers to tap their homes for collateral. Instead borrowers are approved for an amount up to $50,000 and can choose how much they’d like to take out at any time, only paying interest on funds they’ve drawn. Funds can be deposited directly into customer’s bank account and have repayment terms between 12 to 60 months. Additionally borrowers are informed of their loan rate ahead of time and there are no origination fees. It’s these two elements that Laplanche says make Upgrade’s offering a better option than credit cards.

Speaking with Bloomberg, Laplanche declared, “We’re going to replace credit cards.” He went on to say, “We designed the Personal Credit Line to give consumers the two things they want most: the flexibility to access funds when they need them, and the predictability of a fixed rate and equal monthly payments.” Similarly Upgrade board member Micky Malka said in a statement, “Today consumers expect transparency and flexibility in their financial life and Upgrade is leading the charge with the Personal Credit Line.”

This isn’t the first time Laplanche has resolved to create an alternative to credit cards. Famously the CEO has recalled that he got the idea to launch peer to peer lender Lending Club after comparing the amount he was receiving in interest from his savings account to how much he’d have to pay in interest on his credit card — even though both accounts were with the same bank. With Upgrade’s latest product, Laplanche may be one step closer to bringing greater transparency to the credit industry. While the Personal Credit Line offers an alternative to expensive credit card interest, it doesn’t address the other reason why many American utilize credit cards: rewards. But, if Upgrade can develop a rewards scheme on their own or even find a way to partner with another FinTech company to do so, Laplanche might actually have a chance to put a dent into the credit card industry he’s loathed for so long.

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Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

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