Upstart Holdings (NASDAQ: UPST) has inked a deal to sell up to $4 billion in consumer installment loans to investment firm Castlelake LP. Investors are pleased to see there are buyers for Upstart's loans, sending shares of the fintech company up more than 20% on Monday afternoon.

Upstart is attempting to upend the traditional credit scoring system, deploying artificial intelligence to evaluate potential borrowers. The company claims its model provides a more customized, and accurate, projection of whether a customer will repay their loans, but it will take time, and a complete credit cycle, to fully evaluate that claim.

Upstart shares have lost more than 90% of their value since late 2021 as investors fret a slowing economy will lead to higher defaults. The company has also had to keep more of its loans on its balance sheet than it had intended due to poor market conditions.

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Source Fool.com