Avant Personal Loan Review: Is It Legit and Worth the Cost?
The financial technology company Avant is a legitimate lender that offers both credit cards and personal loans. Even though it is not a traditional bank, you can get loans from $2,000 to $35,000, even if you have a lower credit score. You can use the money for home improvement projects, debt consolidation, emergencies, weddings and more.
If you’re in need of a personal loan, our independent review of Avant personal loans will help you decide if the lender is right for you. We’ll go over how the loans work, pros and cons, who qualifies and alternatives.
What Is Avant?
Avant is an online lending platform, not a bank, that was founded in 2012 and specializes in unsecured personal loans for fair-and-bad-credit borrowers. That’s what makes it a good choice for people who may have been turned down elsewhere. Avant says on its website that its goal is to improve the borrowing experience for middle-income consumers.
Because it isn’t a bank, its credit products (which includes credit cards) are issued by WebBank, which is FDIC insured.
How an Avant Personal Loan Works
Avant offers fixed-rate loans, meaning your interest rate is locked in once you get the loan. You can use them to consolidate your debt, pay for a large purchase like a wedding or honeymoon, and much more. Here’s how the process generally works:
- Check your rate and see if you qualify. This won’t impact your credit, and it will let you know how much money and what kind of interest rate you could get.
- If you qualify, you can apply online. Avant says this only takes a few minutes. The company will verify your identity, employment, income and banking information.
- Get a decision on your application, sometimes in as little as a few minutes.
- Receive your funds, potentially as soon as the next business day.
- Make your monthly payment on time until the loan is paid off.
As with any personal loan, it’s important to review the rates, terms and fees closely before signing an agreement. The final offer might look different than prequalification, and the loan amount and terms are fixed until the loan is paid off, unless you refinance. Refinancing can get you more money, as lower APR or lower monthly payments.
Here is more information on how personal loans work.
Avant Rates, Terms, and Fees
Avant offers personal loans between $2,000 and $35,000 with APRs from 9.95% to 35.99% and terms from 24 to 60 months. The loan amounts are lower compared to some competitors that offer loans up to $100,000. The minimum loan amount may also be different, depending on the state you live in. If you’re looking for a low APR, the minimum APR is also on the higher end with Avant.
Although Avant does not charge a prepayment penalty (a fee you pay when you pay off the loan early) it does charge a hefty administrative fee of up to 9.99%. This fee is deducted from your loan. So even though it won’t come directly out of your pocket, it’s not ideal. You’ll also pay a late fee of $25 if you make your payment more than 10 days after the due date.
Our guide also explains more about how personal loan rates work.
Who Qualifies for an Avant Personal Loan?
Avant may consider factors that most other lenders do, like your income, employment and how much debt you currently have. You’ll most likely need documents that show how much money you make, where you work and where you currently live. Your credit score is also huge when it comes to whether or not you get approved and the terms you qualify for.
Avant says although most approved loan applicants have a credit score of 600 or above, you could qualify with a score as low as 550. That’s lower compared to many other lenders, which is why Avant is a good option for people struggling with their credit. It’s important to remember that the lower your credit score, the higher your APR is likely to be, regardless of the lender.
Loan applicants also must have a checking or savings account on file.
Pros and Cons of Avant
Pros
- Accessible for fair-and-bad-credit borrowers
- Soft-pull prequalification
- Fast (often next-day) funding
- Fixed rates
- No prepayment penalty
Cons
- High APRs
- An administration fee that can approach 10% of the loan
- A relatively low $35,000 maximum
- No co-signer/co-borrower option
- No secured-loan option
- Unavailable in several states (Hawaii, Iowa, Maine, Massachusetts, Washington, West Virginia)
Is Avant Legit?
Yes — Avant is a legitimate, well-established lender that has originated billions in loans since 2012. Even though it is a fintech company and not a bank, it issues its loans through an FDIC-member bank partner. Customers are generally happy with their experience.
It has a 4.3 rating on TrustPilot from more than 32,000 reviews. Positive reviews describe the process as quick, easy and straightforward. The negative ones largely point out the fees. Although Avant also is a Better Business Bureau accredited business with an A+ rating, the reviews with the BBB are an average of one star. It’s also important to note that in 2019, Avant agreed to pay $3.85 million to settle claims from the Federal Trade Commission that it “engaged in deceptive and unfair loan servicing practices.” The FTC claimed Avant charged duplicate payments and withdrew money from customers’ accounts without authorization, and falsely advertised it accepted certain payment methods.
Even though it is legit, that doesn’t mean it’s right for everyone. It is a decent choice for people who don’t need a very large loan and are struggling with their credit. However, it charges an administrative fee and the minimum APR is higher than most of its competitors, so it’s worth it to see if you have other options.
Avant vs. Cheaper Alternatives
Avant’s fees and higher APRs can make it the more expensive option. An easy way to find cheaper loans from other lenders is through marketplaces like AmOne or Pennie personal loans. They’ll match you with loans you qualify for based on your needs and credit profile, then you can compare your options before choosing. Using these won’t have an impact on your credit score either. A credit union may also be a better option if you have a lower credit score. They can offer more competitive rates because credit unions are member-owned financial cooperatives.
If you do end up using Avant, try to refinance when your credit score improves. Refinancing can get you lower interest rates and lower monthly payments.
Frequently Asked Questions
Yes. Avant is a legitimate, established online lender that’s been operating since 2012 and has originated billions of dollars in loans, and its personal loans are issued through an FDIC-member bank partner. It has a large base of customer reviews, with a 4.3 rating on TrustPilot and praise for its fast, simple funding and complaints that tend to center on cost and payment issues. As with any fair-credit lender, legitimate doesn’t mean cheap — read the full APR and administration fee before you accept, and compare alternatives.
Avant is good for fair-and-bad-credit borrowers, as its minimum score is relatively low — commonly cited in the mid-500s, although most approved borrowers have a score of 600 or more. It weighs your income and other factors alongside your score, and you can check whether you prequalify with a soft credit pull that won’t affect your score. Just remember qualifying doesn’t make it cheap: Avant’s rates are high, so it’s worth checking whether you’d qualify for a lower-cost option first.
Avant’s main fee is an administration fee (sometimes called an origination fee) of up to 9.99% that’s deducted from your loan before the money reaches your account — so you receive less than your approved amount while repaying the full amount plus interest. It can be a significant share of the loan, so factor it into the total cost. Avant also charges a late fee and a dishonored-payment fee, but there’s no prepayment penalty, so you can pay the loan off early without an extra charge.
Relatively, yes. Avant’s APRs run high for its fair-credit audience, and its administration fee of up to 9.99% adds a sizable upfront cost. It’s far cheaper than a payday or title loan, but more expensive than what you’d pay with strong credit at a prime lender. If your credit is on the higher end of fair, it’s especially worth prequalifying with a couple of other lenders first to see whether you can beat Avant’s rate and fee.
