Avant is known for making loans more accessible for consumers with low credit. Having started its operations in 2012, Avant has established itself as a key player in the online lending space for this market segment. Offering personal loans and credit cards, Avant’s strengths are speed, transparency and convenience. Headquartered in Chicago, Avant operates in both the U.S. and U.K. and boasts a loan portfolio of $4 billion with more than 500 employees.
Ideal for someone whose credit is average, Avant’s unsecured personal loans can help with things like debt consolidation, unexpected medical expenses, home improvement or even vacation. With its straightforward approval process and quick fund release, Avant is a great option if you need money fast. However, since you won’t have to pledge any assets as collateral, and Avant operates with less stringent credit requirements, you can expect higher interest rates compared to other online lenders.
How Avant stacks up
- Lower credit score requirements (580+)
- Funds usually provided 1-2 days after approval
- Soft credit check to pre-qualify
- Can change repayment due date and amount
- No early prepayment penalities
- Higher APRs
- No secured loan option
- Loan cannot be used for business
- No direct payment for debt consolidation loans
- Limited product range
What’s interesting about Avant
While lenders often require applicants to have a credit score of 600-700 for loan approval, Avant will consider a minimum of 580, making its loans more accessible to those struggling to improve their credit.
What’s great about Avant’s loan process is that you can do a soft credit check on its website before making an application. This means potential borrowers can determine their borrowing rates without affecting their credit score. The flexibility to decide when and how much you’ll repay deserves a mention, too. You can actually change your next repayment up to a day before it’s due using online tools or a dedicated mobile app.
Then there’s the freedom to choose how you’ll make repayments without having to worry about additional fees. Avant will accept AutoPay, bank account transfers, some credit/debit card payments, personal checks, cashier’s checks or money orders. As there are no early repayment penalties, you can potentially pay off your personal loan early and save on interest.
The option to refinance is yet another attractive feature. You’ll need at least six months of on-time payments to be considered, but if you qualify, you can get a higher loan amount or possibly reduce the interest rate on your existing loan.
Things to consider
An obvious downside of borrowing from Avant is its higher APRs relative to alternatives like LendingClub, Prosper and SoFi. In fact, anyone with decent credit would likely find a better rate elsewhere. Even those with low credit should shop around, as they could be quoted APRs that are as expensive as credit card rates.
Borrowers who require larger loan amounts will probably have to find a lender elsewhere too, as Avant will only lend a maximum of $35,000. Compared to their competitors’ offerings, Avant’s loans come with a lot of restrictions. There are no co-sign or secured loan options, no direct payment to creditors for debt consolidation loans and borrowings cannot be used for a business purpose, either.
Avant offers consumer installment loans of two to five years, with lending amounts ranging from $2,000 to $35,000.
Its loan application process is done entirely online, which is not ideal for consumers who prefer a face-to-face experience. While Avant’s online application is quick and easy to follow, you can speak to a representative over the phone if you experience any problems. To begin your application, you’ll simply need your personal information (such as contact details and Social Security number), monthly income and housing payment details, the amount you’re looking to borrow and why, as well as your credit score.
If approved, you’ll be provided with a variety of borrowing options so you can choose a repayment amount, loan term, and interest rate combination that suits you. Once your loan is finalized, you can generally expect the arrival of your funds by the next business day.
In terms of fees, it’s important to bear in mind that Avant charges an origination fee of 0.95% to 4.75%. You’ll need to factor this in when calculating the amount you’re looking to borrow.
Other fees to be aware of include the late payment fee of $25, though you can get this refunded by making three consecutive on-time payments. There is also a returned payment charge of $15 if your account has insufficient funds to clear the monthly repayment. Although you can make installments in a number of ways, Avant no longer accepts Visa credit card payments.
Avant doesn’t offer mortgage loans, but SoFi is a solid online alternative with competitive rates and an approval process that takes into account your earning potential in addition to your credit score. If credit score is not an issue, First Mortgage Direct is probably your best bet for a home loan that combines decent APRs with $0 upfront cost. Quicken is also popular for its easy application process and top rates.
While mortgage refinancing is not available with Avant, LoanDepot and New American Funding are both leading providers in the refinancing space for borrowers with less-than-perfect credit. Both will consider scores of 580+, though lower credit will likely result in higher APRs.
Home equity loans & HELOC
Again, Avant does not offer home equity loans or HELOC. However, Third Federal provides highly competitive rates on its adjustable and fixed-rate home equity loans. It also has one of the lowest cost HELOCs.
If your credit is average, Connexus Credit Union could be a good option as it has alternative ways of assessing your repayment ability.
Avant isn’t in the market for car loans either, but you can get a good deal with Consumers Credit Union, as it offers incredibly low auto loan rates. However, you’ll need to satisfy its membership qualifications and have a credit score of at least 640 to qualify for its products.
SpringboardAuto is willing to consider loan applicants with a minimum credit score of 500, but unsurprisingly, its borrowing rates aren’t the lowest.
The final word
Avant provides a very limited product range with only unsecured personal loans and credit cards on offer. However, Avant’s loans are undoubtedly great for someone with less-than-perfect credit. With flexible payment options, late fee forgiveness, the possibility to refinance, and no early repayment penalties, Avant is a viable alternative for those who needs funds quickly for an emergency or debt consolidation.
The drawbacks? Avant’s APRs are noticeably higher than other online lenders and come with more restrictions, too. You’ll get a better deal elsewhere if you have reasonable credit.