Credit history just meh? Avant is here for you. The loan company issues unsecured fixed-rate loans to borrowers with less-than-perfect credit scores.
Avant says its target borrower has a credit score between 600 and 700, while the typical borrower has a credit score of 650, which is slightly below the national average.
“While many competitors in the industry have focused on prime or super-prime customers, few platforms have concentrated on the near-prime customer — those with a credit score in the 600-700 range,” company spokesman Carolyn Blackman Gasbarra says. “This customer demographic represents 40% of the population and provides Avant with a massive opportunity to provide credit to a historically underserved borrower.”
The company was founded in 2012, but has already made changes in its original lending platform. Notably, Avant began charging an origination fee in late 2016, which it calls an administration fee, a surprising move given that Avant originally distinguished itself from competitors by offering fee-free loans.
On the low end of its interest rate range, Avant charges less than other online companies that cater to consumers with imperfect credit scores, like OneMain Financial. If you have damaged credit, however, you’re unlikely to qualify for the lowest rates.
On the other hand, if you have good credit, you should comparison-shop for your personal loan before making a choice.
Who is an Avant loan good for?
- Someone with slightly below average credit. The average Avant customer has a FICO score of 650. The average FICO score is 695. As long as the loan terms are better than the interest rate on your credit card, an Avant loan could be a good option to pay off and consolidate credit card debt.
- Someone with a modest income. The typical Avant borrower has an average annual income of at least $40,000. Real median household income in the U.S. is about $56,500.
- Someone who doesn’t need a co-borrower. Avant, like many online lending platforms, does not allow joint borrowers on a single loan. If your credit or income aren’t good enough to qualify on your own, you may want to consider using a different company.
- Those who need some flexibility in their payments. Avant will forgive a late payment after you re-establish on-time payments.
Who should not accept a loan
- Anyone with good or better credit. If you have a credit score above 700, you may qualify for better rates elsewhere.
- Anyone with bad credit. If your credit is exceptionally weak, you may be quoted double-digit interest rates on your personal loan. Those interest rates may not be any better than you’re paying on your credit card today.
Consider applying for a balance transfer credit card with a no-interest introductory period, which could help you consolidate debt for less.
Avant offers loans that range from $1,000 to $35,000, although the minimum loan varies by state. Its personal loans carry a fixed annual percentage rate of 9.95% to 35.99%, depending on creditworthiness. The rate quote you receive is based on multiple factors, including credit history, the amount you’re asking for, and if you want 24 to 60 months to pay it off.
|Income||$40,000 to $100,000|
Avant charges an administration fee that is built into the monthly payments. For example, if you are approved to borrow $6,500 and you’re charged a 3.75% administration fee, you’ll only receive $6,256.25. That loan, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $265.40. Keep in mind, though, that you’ll be making payments on the entire $6,500. You should factor the origination charge when calculating the total amount you’re looking to borrow.
If the loan is approved, funds can typically be accessed within the next business day or two.
Unlike most other firms, Avant offers a late-fee forgiveness program. If you make a late payment, which averages around $25, Avant will refund this charge after you make three on-time payments in a row.
Minimum borrower requirements
Unlike other lending platforms, Avant doesn’t disclose a minimum income or credit score requirement.
You have to have a bank account to receive the funds.
According to the company, most applicants have a FICO score between 600 and 700. Avant will verify income information either through your employer or, if you’re self-employed, it may ask you to submit your previous tax returns to verify your income.
Fees and penalties
- Avant charges an origination fee that ranges from 0.95% for refinance customers and up to 4.75% for new customers. The company does not disclose how it determines the fee.
- You’ll be charged on average a $25 late fee, although the actual amount varies by state. Avant has a late-fee forgiveness program that will refund the late payment fee after three consecutive on-time payments.
- You’ll be charged $15 if you don’t have enough money in your bank account to cover your monthly installment.
- You won’t be penalized for paying off your loan early.
How to apply
The online application is simple to follow. You’ll be asked to enter some basic information, including your name, address, Social Security number and income.
Avant then does a “soft” credit check, to quote you loan rates, which won’t impact your credit rating.
If you’re approved, the online calculator displays a chart with individualized options, including the fixed monthly payment due on different loan length ranges and the interest rates for each.
|Loan size||$1,000 to $35,000||$1,500 to $25,000|
|APR range||9.95% to 35.99%||12.99% to 35.99%|
|Origination fee||0.95% to 4.75%||Varies by state|
|Minimum credit score||No minimum||No minimum|
|Time to funding||1 to 2 business days||Same day|
|Soft credit check with application?||Yes||Yes|
After you choose a repayment option, you’ll be shown the details, including the total amount of the loan, what Avant is subtracting as an origination fee and how much will be deposited into your account.
The last steps are to electronically sign for your loan and provide your bank information for the deposit. You can opt for automatic monthly debits or remotely created checks.
Before finalizing your loan, Avant will do a “hard” credit check, which can adversely impact your credit score.
The process is uncomplicated and straightforward, and the site is easy to navigate and read. It takes approximately one to two business days for the funds to be deposited in your account.
What to do if you’re turned down
If Avant rejects your application and you believe your financial standing is strong enough, consider requesting the reason for decline. Avant will follow-up with an email. The explanation could be as simple as a processing error. Or there may be a negative mark on your credit report that you need to investigate.