June 20 (Reuters) - Private credit lender Castlelake

will buy up to $1.2 billion in consumer installment loans from

fintech firm Upstart to expand its foothold in the

retail lending space, it said on Thursday.

The deal underscores how investment firms are increasingly

pushing into businesses that have traditionally been dominated

by banks as high interest rates and the fear of defaults force

lenders to hesitate.

Castlelake clinched a similar agreement in May last year

to buy $4 billion of loans from Upstart.

Upstart serves as an intermediary between borrowers and

lenders. More than a 100 banks and credit unions use its

platform to approve loans to customers.

(Reporting by Niket Nishant in Bengaluru; Editing by Anil

D'Silva and Devika Syamnath)