Avant Loan Pros and Cons
Avant is one of the largest online personal loan lenders in the United States. Avant made its first personal loan in 2012, and has grown significantly. They have served more than 600,000 customers, totalling over $4 billion in loan applications processed.
Avant started with a specific strategy and shifted it, in response to market opportunities, demonstrating flexibility and a desire to serve its customers. A 2013 press release entitled “Avant Credit Offers New Online Lending Approach for Middle Class Borrowerst’ lays out their initial strategy and defined its target market. Avant is strictly an online business, with no physical storefronts. Avant is one of many “FinTech” (Financial Technology) firms that entered the financial services industry focusing on using innovative technology and “Big Data” to find customers not well-served by traditional personal loan lenders (banks and credit unions) on one end, and payday lenders who offer very high interest, low dollar amount unsecured personal loans.
Avant took an individual approach to borrowers, looking beyond credit scores when determining if an application is approved, and focusing on making their website, application process, and tools easy to use and emphasizing a high level of customer service.
Leaving the prime credit borrowers to the banks and credit unions, Avant went after the “near prime borrower.” Their analysis was that these borrowers can’t find loans to serve important needs and Avant could use its technological analysis to approve loans for borrowers whose credit score says that the loan is risky, but who are actually solid borrowers with legitimate needs for money and able to repay their loans responsibly. Avant’s borrowers seek personal loans for the same reasons consumers seek personal loans elsewhere: debt consolidation, home improvement, to pay for a big purchase, cover wedding costs, or medical expenses not covered by insurance.
Avant personal loans initially were available with loan amounts between $1,000-$10,000 in 15 states.
Using Avant Today
As their business model proved successful and they demonstrated a track record of approving borrowers who don’t default on their loans, they have been able to increase loan amounts and expand their market. Avant now offers personal loans of $2,000-$35,000 and offers loans in 46 states, every state other Iowa, Colorado, Vermont, and West Virginia.
Avant also branched out and started offering the AvantCard credit card, working to find another credit product to help consumers with fair to poor credit establish credit accounts for convenience and for building their credit score .
Personal loans remain Avant’s main product. If you are shopping for a personal loan, here are some details you should know, to see if a Avant is a good fit for you.
Avant’s process remains simple and easy to use. It takes less than five minutes to check your loan options online, because they only ask for your full name, address, income information, and your Social Security number. Checking your loan options doesn’t harm your credit score, as Avant uses a soft pull of your credit report. A hard-pull, which will ding your score a few points, generally, is only done when a formal application is submitted.
If your application is approved, you can sign your loan documents online and get your money quickly. Your loan proceeds are deposited the day after your loan is approved, in general, if the approval is finalized by 4:30 Central Time.
Though an online business, Avant has a phone in customer service department that is open 7 days a week. They also offer a basic client dashboard and an app for your phone. This makes it easy to monitor your loan wherever you are.
Avant Interest Rates, Fees,and Terms
A key part of deciding if an Avant personal loan, or any loan, is right for you, is to pay attention to the details.
As of May 2019, Avant offers loans with:
- A loan size of $2,000-$35,000, though the minimum can vary by state.
- An annual Percentage Rate (APR) between 9.95% and 35.99%. The APR factors in the fees as well as the base interest rate you pay.
- Repayment length of 2 years to 5 years. Shorter term loans will have higher payments, but a lower interest rate. Don't commit to the higher paymenty shorter term loan unless you are sure that you can afford the payment comfortably.
- An administration fee of up to 4.75% of your loan amount, which is taken off the top, so you receive your approved loan amount less the fee. Fees are transparent on the loan documents, so you can see if you are paying the max 4.75% fee or not.
Is an Avant Loan Right for You?
When you are considering a loan from Avant, the key questions to ask yourself are:
Is the Avant offer the best one available to you? Rates and fees are the primary factors in comparing loans, but it is not necessarily stupid to take a slightly more expensive loan if you find the customer support, user experience, company’s business ethics, or some factor important to you worth paying for.
What you don’t want to do is to take the first loan you are offered. Comparison shop. You can use the personal loan rate table below to see get preliminary rate information without affecting your credit score.
It makes sense to restrict your initial shopping to lenders who will offer you a preliminary quote without affecting your credit. Avant is one lender that uses a "soft pull" of your report to start. Soft pulls are visible to you, when you pull your credit, but not to other lenders.
APRs are your friend. Avant, and every lender is required to make your APR clear to you. Just be sure that when you compare loan offers from multiple lenders that you are looking at the same term.
Avant doesn't charge any penalty for paying off your loan early, but it charges:
- A 4.75% Administrative Fee, a substantial cost. If you receive $10,000, they take $475 off the top/
- A late fee of $25. The late fee can be different, if the law in your state specifies a smaller amount.
- A $15 fee if your regularly scheduled payment is returned.
Do some basic research, so you understand what customer a lender targets, before you speak with them. Avant's prmary focus is a borrower who is not qualified to get the best rates available. The interest rate spread they offer, 9.95% APR to 35.99% APR, are higher than many lenders. If you are a prime borrower, don't look at Avant as a solution. Similarly, if you are not a prime borrower, it makes sense to look at Avant.
Avant Loan Credit Score and Income Requirements
Multiple consumer finance websites say that Avant will accept borrowers with a FICO score of 580 and above. Bills.com contacted Avant and were told that is not correct. There is no set minimum credit score. Avant says that most of their customers have credit scores between 600 and 700. They don’t supply greater detail, for instance, how many borrowers were approved that had scores below 620, or how many between 621 and 640.
Avant reports your payments to the credit bureaus, so timely loan payments will boost your score over time.
Another “fact” that many consumer finance websites report is that Avant requires a minimum income of $20,000/year. That information is not published on the Avant website, as of May 2019, and Avant said that the $20,000 minimum requirement is not correct. Proof of your income and calculating that youc an afford the monthly payment are what they weigh.
This doesn’t mean that low income or sub-580 credit score borrowers qualify often. In fact, they probable do very rarely. However, in multiple conversations, Avant made clear that they look at more than numbers, and there are scenarios, however limited they may be, that a borrower could be approved with low-income or credit.
FInding the Best Loan is Your Responsibilty
Again, your job when looking for a loan is not to find who offers the best rates and terms in the marketplace, but who offers you the best loan. Use the information you gather in your research to help select which lenders are worth checking out. Let the lenders speak for themselves as to the exact requirements.
If your credit is less than 700, including Avant in your comparison shopping is sensible. They have a high customer satisfaction rating from customers who rated them. According to their website they surveyed over 115,000 recent customer and less than 6,000, or about 5%, responded. This limited group gave Avant very high marks.