Do you have poor or mediocre credit, but you need to finance a big expense? If so, Avant wants to be your lender of choice.
But is taking out a personal loan from Avant a good idea? We explain how the loans work, and whether you should take one out.
We consider Avant to be one of the Best Personal Loan Companies for people with mediocre credit. They have good rates, and you can learn more in the review below.
Avant is on the Credible platform, so you can quickly and easily see how Avant compares in 2 minutes or less. Don’t believe us? Check out Avant on Credible here.
- One of the best personal loan companies
- Good rates for borrowers with mediocre credit
- There may be an origination fee depending on the state
What Types of Loans Does Avant Offer?
Avant only offers unsecured personal loans at this time. All loans are fixed-interest loans, so you’ll make even payments over the life of the loan.
All payments on loans from Avant are reported to the major credit reporting bureaus. Making on-time payments on the loan should boost your credit score in time.
Who Qualifies for a Loan from Avant?
Avant’s loan offers are for borrowers with poor to moderate credit scores. Most of Avant’s borrowers have credit scores between 600 and 700. Those with scores on the lower end of that spectrum may struggle to find reasonable rate offers elsewhere. By contrast, those with scores around 700 are likely to find better rates elsewhere.
To borrow money from Avant you must live in the United States, be at least 18 years old, and have a verifiable source of income. You will be required to submit some form of documentation to prove your employment or income.
What Are the Rates and Terms on Avant’s Loans?
Loans from Avant don’t have a lien, so if you don’t pay, Avant can’t repossess your car or foreclose on your house. However, they can sue you if you don’t pay. All loans from Avant are fixed-interest loans with equal monthly payments. You’ll repay the loan over the course of 24 to 60 months.
Loans from Avant range from $2,000 to $35,000. APR ranges (which include an origination fee of 0.95% to 4.75%) from 9.95% to 35.99%. The amount Avant lends to you and the interest rate will depend on your income, credit score, and where you live. These rates are accurate as of October 5, 2018. Please see the lender’s website for the most up to date information.
If you make a late payment, you’ll pay $25 as a late fee. If the payment is declined, you’ll pay $15 as a dishonored payment fee.
Is There Any Concerning Fine Print on Avant’s Loans?
The biggest area of concern for most borrowers is the upfront “administration fee.” This fee can range up to 4.75% of the loan amounts though the exact amount depends on the state you live in, your credit score, and more.
Upfront fees not only raise the effective APR on a loan, they also guarantee that you’ll have to pay a good amount in fees even if you can pay the loan off early and avoid excessive interest.
When You Should Not Consider a Personal Loan from Avant
Although a personal loan from Avant could come with an interest rate as low as 9.95%, most borrowers will see interest rates that are much higher. In fact, interest rates on loans from Avant could be higher than average interest rates on credit cards (currently 15.54% on average).
Because of the high interest rates, it’s hard to think of a good reason to take out a loan from Avant. Here are a few reasons that you should not take out a loan from Avant.
To Consolidate Debt
If you’re looking at a personal loan from Avant in order to consolidate existing credit card debt, look into your options for a 0% balance transfer credit card. Borrowers with credit scores above 650 routinely qualify for some of the best balance transfer offers.
If you can’t find a balance transfer option, reach out to a credit counselor from the National Foundation for Credit Counseling (NFCC). NFCC counselors can often help borrowers create debt management plans that include lower interest rates (usually 6% to 7%), so that you can make headway on your debt.
If student loans are the source of your financial woes, an income-driven repayment plan can help you with your cash flow until you can increase your income. For private loans, refinancing to a longer term might be better than taking out a personal loan.
To Pay for a Wedding or Honeymoon
A wedding or a honeymoon is (hopefully) a once-in-a-lifetime event, but you do not want to start married life shackled with high-interest debt. It is possible to have a beautiful wedding and avoid going into debt for it. By simplifying the wedding, only splurging on the most important parts, and hustling like crazy, you can start life together on the right foot.
To Pay for Medical Debt
Most of the time, hospitals and other medical providers can help you pay off your medical debt by putting you on a plan with 0% interest. For people really struggling with their bills, the hospital often gives away certain charitable donations. Call your medical providers or their billing agents to see what you can work out.
To Buy a Car
Getting a loan from a “buy-here, pay-here” dealership is likely to yield a horrible loan, but that doesn’t mean all auto loans are bound to be terrible. Work with a loan officer from a local credit union to see what type of auto loan interest rate you qualify for. The loan officer will also help you set a realistic budget for your car (try to keep the loan to less than four years, and no more than 20% of your take-home pay).
Perhaps you can think of an extreme situation where a personal loan could make sense. In that case, give Avant a try, especially if you can’t qualify for a loan from lenders like LightStream or SoFi. However, most of the time, personal loans will send you deeper into debt rather than giving you the tools to gain financial freedom. Most people should avoid loans from Avant, and instead focus on increasing income and savings to cover everything from vacations to weddings to private school costs for the kids.
Final Thoughts
Avant is one of our favorite lenders for borrowers with mediocre credit. Given their low rates, if you have okay credit, you’ll likely get a better offer from Avant than any other lender.
However, Avant isn’t the only lender available. Make sure you quickly compare your options using a service like Credible. In just about 2 minutes, you can know the best lender for you. Check it out here.
