Founded in 2012, Avant is an online loan servicer with a self-proclaimed mission is to lower the costs and barriers of borrowing for everyday people by leveraging data to streamline the online borrowing process. To date, the company has helped fund over $6.5 billion in loans for 1.5 million borrowers through their partner, WebBank. (WebBank is the one that actually originates the loans, which is then serviced by Avant).
Avant offers the opportunity to easily check your rate online without affecting your credit score, along with fast funding — most often as soon as the next business day. Avant offers a mobile app for managing your loan and payments. The company’s relatively low credit score requirements make it accessible to those with less-than-stellar credit. However, Avant’s loan APRs are higher than many other personal loan lenders and the lender charges administration fees and late fees that some other lenders may not.
What to Know Before Getting a Personal Loan
Personal loans can be a quick way to access cash when you need it, but it’s important to use them wisely. Before taking out a personal loan, you should consider whether it’s really necessary and come up with a plan to pay it off. Always do your research and comparison shop with multiple lenders to find the best personal loan interest rate.
Be aware that the exact rate you get may differ from the advertised rates since rates depend on your credit score, income, and loan value and terms. Some lenders will let you pre-qualify for a loan or check your rate with only a soft credit inquiry, which won’t affect your credit score. Other lenders may require a hard credit inquiry, which could lower your credit score by a few points. When you officially apply for a loan, all lenders will require a hard credit inquiry. In addition to the interest rate, check if the lender charges any fees — such as origination fees, prepayment penalties, or late fees — that might raise the cost of the loan.
Once you’ve taken out a loan, be sure to make payments on time to avoid any additional fees or interest charges. Late payments can also damage your credit score.
Finally, know the difference between a secured loan, which uses an asset such as a house or car as collateral, and an unsecured loan, which requires no collateral. Secured loans may offer lower interest rates, but they’re riskier for the borrower since you can lose your collateral if you default on the loan.
Alternatives to Personal Loans
Although a personal loan is a viable strategy to pay for big expenses, it’s not the only option. Some alternatives to personal loans include:
- A home equity loan, home equity line of credit (HELOC), or a cash-out refinance. These three options are similar since they allow homeowners to tap into home equity for cash upfront. Because these financing methods are secured by your house, you may be able to get better rates than an unsecured personal loan. But each one has its unique pros and cons as well.
- A balance transfer credit card. Certain credit cards have introductory offers of 0%-APR for a set amount of time, usually 15-18 months. If you’re seeking to consolidate debt, one strategy is to transfer your debts onto one such card, pay off the balance before the introductory period ends, and pay no interest on the balance. If you use a balance transfer credit card, it’s especially important you have a plan to pay off the balance before the end of the introductory period; otherwise, you’ll be on the hook for high credit card APRs. Also, be aware that credit cards with balance transfer offers are typically only available to those with good credit.
- Personal savings. If your money needs aren’t urgent, consider saving in advance for a big purchase and paying with cash rather than taking out a loan. Having an emergency fund in place can also help you in the event of unexpected expenses. Experts recommend having three to six months’ worth of expenses in an emergency fund. You can take these steps to start building yours now.
- Credit counseling. If you’re struggling with debt or need help managing your finances, many non-profit organizations offer free or low-cost credit counseling to get you back on track. While credit counseling services won’t provide you with money directly, they can provide expert financial advice and direct you to other resources that may be able to help.
Pros and Cons of Avant Personal Loans
Offers a mobile app to make managing your loan easier
Loan are usually funded the next business day after your application is approved
Low minimum credit score requirements
Can check your rate without a hard credit inquiry
No prepayment fees
Administration fee of up to 4.75%
Not available in: Colorado, Iowa, West Virginia, New York, Vermont, Hawaii, and Nevada.
Comparatively high APRs
Late fees if you miss a payment (exact fees vary by state)
Avant Personal Loans Compared to Other Lenders
|Loan Term Range||2 to 5 years||3 or 5 years||3 or 5 years|
|Loan Amount||$2,000 to $35,000||$2,000 to $45,000||$1,000 to $50,000|
|Credit Score Needed||580||540||600|
|Origination Fee||Administration fee of up to 4.75%||1% to 6%||0% to 8%|
|Unsecured or Secured Debt||Unsecured||Unsecured||Unsecured|
How to Qualify for an Avant Personal Loan
Avant doesn’t list minimum credit score requirements on its website, but most customers who receive a loan have credit scores falling between 600 and 700. However, an Avant PR representative confirmed that the typical minimum FICO score requirement is 580, although the company also provides products for customers with credit scores from 500-700.
Avant also requires a monthly income of $1,200 or more. There are no employment requirements, although those who are self-employed may be required to submit additional documentation in their application. Avant loans, like all personal loans, are for personal use only and can’t be used for business purposes.
Finally, Avant personal loans are not available in Colorado, Iowa, West Virginia, New York, Vermont, Hawaii, and Nevada.
Who Should Get an Avant Loan
Although Avant loans have a relatively high APR and charges fees, it does have three big points in its favor: relatively low credit score requirements, the ability to check your rate without a hard credit inquiry, and fast funding.
Avant’s “typical” minimum credit score requirement of 580 is at the very bottom of the “fair” range, according to Experian. But the company may also provide products for people with credit scores as low as 500, which is solidly in the “poor” credit score range. If your credit score keeps you from qualifying for a loan with other lenders, Avant might be able to help. And the ability to check your rate online without your credit score being affected by a hard credit inquiry makes looking into an Avant loan risk-free, whether or not you ultimately decide to use them. However, be aware that even though Avant’s minimum credit score requirements are relatively low, having a lower credit score will likely mean having a higher interest rate.
Avant also offers fast funding, with loans typically being funded within one business day after the loan is approved. Because of this, Avant loans can be a good option for emergencies if you need to cover an unexpected expense — like urgent repairs or medical expenses — quickly. But if you need a personal loan for something that can wait, like debt consolidation or planned expenses, you may find lower rates and fewer fees with other lenders.
How to Apply for an Avant Personal Loan
First off, you need to find out if a personal loan is really right for you. See if you can pre-qualify for a lower APR with a balance transfer credit card or if the expense you’re considering could wait. If a personal loan truly is the best call, you’ll also need to decide how much you want to borrow.
Then, to get your personal loan, follow these steps:
- Check your rate online. You can check your rate and get a preliminary loan offer by filling out the pre-screen form on Avant’s website. You’ll have to provide some personal information, like your address, income, and social security number, but Avant won’t initiate a hard credit inquiry at this stage. This means that you can check your rate without affecting your credit score.
- Fill out the official application and provide any required supporting documentation. If you decide you want to move forward with an Avant loan, you’ll need to fill out an official application. This step will require a hard credit inquiry, which may lower your credit score by a few points. Depending on the information you provide in your application, you may also need to submit additional documentation like pay stubs and bank statements. Avant will reach out to you directly if it requires any supporting documentation from you. You can submit additional documentation online, by email, or by fax.
- Wait for your loan to be approved or denied. Once Avant has the required information from you, it will work with its partner WebBank (the loan originator) to approve or deny your loan application. You can check your application status by logging into your dashboard, where you can also view any tasks you need to complete.
- Receive your loan funds. Once your loan is approved, funds are usually electronically deposited into your bank account the following business day, according to Avant.
Is Avant good for personal loans?
While Avant has some perks, like fast funding and an app, its rates are high and its loans can come with a sizable administration fee. But relatively low credit score requirements means that its loans are accessible to those with fair or poor credit.
What credit score do you need for an Avant personal loan?
The typical minimum credit score required is 580, according to an Avant PR representative. However, Avant also provides also products for the underserved customers with credit scores from 500-700
Can I get an Avant personal loan with bad credit?
Avant’s typical minimum credit score requirement of 580 falls at the bottom of the “fair” credit score range. However, Avant may also provide loans to those with a credit score as low as 500, which is considered “bad” credit.
Does an Avant personal loan hurt your credit?
Applying for any new personal loan will require a hard credit check, which may cause a dip in your credit score. However, as long as you manage the loan responsibly and always make your payments on time, taking out a personal loan will not hurt your credit score in the long run.