Avant Review: Personal Loans, Even for Dinged Credit

Avant is geared toward borrowers with low credit scores who want to consolidate debt.

Half of its borrowers take out loans for debt consolidation, according to the company. Avant acquired debt management website ReadyforZero in 2015, allowing it to give borrowers resources to help manage debt as well as free access to their VantageScore credit scores.

The Chicago-based lender focuses on the “typical middle-class American consumer,” says Adam Hughes, Avant’s chief operating officer.

Avant is one of the largest online lenders to focus on consumers with low credit scores. Its rates are comparable to others who accept low credit scores, such as OneMain Financial and Peerform, but it does not charge origination fees and performs only a soft credit check, which does not affect your credit score.

Avant at a glance

To review Avant, NerdWallet collected more than 30 data points from the lender, interviewed company executives, completed the online loan application process with sample data, and compared the lender with others that seek the same type of customer or offer a similar product.

Avant is a good fit for those who:

• Have credit scores in the 600 to 700 range; borrowers’ average is 650.
• Have annual income between $40,000 and $100,000.
• Want guidance while paying off debt.
• Need flexibility in their loan payments. If a borrower misses a payment, Avant charges a $25 late fee. However, the lender also has a “late fee forgiveness” feature. If the borrower makes three consecutive on-time payments after the missed payment, Avant will refund the late fee.
• Want to raise their credit score. Avant says borrowers who successfully consolidate debt also raise their scores by an average of 12 points over a six-month period.

How to apply

Minimum requirements

Lending terms

Fees and penalties

Learn about personal loans

Apply now

How to apply

Fill out the online application by providing details such as your name, address and Social Security number. Avant checks all three credit bureaus for your credit profile, but does not conduct a hard check:

If you’re approved, choose the loan terms that you want. Depending on your credit profile, you may see one or more options:

Sign the loan agreement and provide your bank information to receive the funds:

You may have to enter additional information and also provide documents to verify your identity and income:

Minimum requirements for an Avant loan

• Minimum credit score: 580, but the average is 650.
• Minimum gross income: None, but generally more than $40,000.
• Minimum credit history: None.
• Maximum debt-to-income ratio: None.

Avant’s lending terms

• Annual percentage rate: 9.95% to 36%.
• Minimum loan amount: $1,000.
• Maximum loan amount: $35,000.
• Minimum loan duration: 2 years.
• Maximum loan duration: 5 years.
• Time to receive funds: Typically the same day, but it may take up to a week.

Avant’s fees and penalties

• Origination fee: None.
• Prepayment fee: None.
• Personal-check processing fee: None.
• Late fee: $25.
• Unsuccessful payment fee: $15.

Before you take a personal loan

Consider other debt consolidation options. An unsecured personal loan isn’t your only option to tackle debt. If you have good credit, you might be able to find a 0% credit card promotional offer. Homeowners might be able to get a home equity line of credit. You should also compare other debt consolidation lenders.

Check your credit report and know your financial strengths. Your chances of being approved for a loan and the interest rate you’ll be offered don’t just depend on your score; they also depend on the length of your credit history, your income and other debts. High debt might outweigh a great credit score, for example, or a low score could be bolstered by a high income.

Learn how personal loans work. All lenders require certain personal information to verify your identity and income and check your credit, and they have different ways of assessing you.

Calculate payment scenarios. Run the numbers on different loan amounts and interest rates to see how the payments might affect your monthly budget.

Have a plan for getting out of debt. Personal loans may help you consolidate debt, but in the long run you’ll need to make a budget that both covers expenses and helps you save for emergencies and opportunities.

Amrita Jayakumar is a staff writer at NerdWallet, a personal finance website. Email: ajayakumar@nerdwallet.com. Twitter: @ajbombay

This article was updated on June 17, 2016. It originally published Nov. 19, 2015.