Avant Review: Personal Loans for Bad-Credit Borrowers

Avant is one of a handful of online lenders catering to borrowers with bad credit.

Its minimum qualifying credit score, 580, is lower than other online lenders’. Avant borrowers generally have credit scores in the range of 600 to 700.

The Chicago-based company is focused on the “typical middle-class American consumer,” says Adam Hughes, Avant’s chief operating officer. Most borrowers have a household income between $40,000 and $100,000, according to the company.

Avant also says it doesn’t have minimum requirements for income, credit history or the ratio of debt to income, although it does consider all those factors when making a loan decision.

Potential borrowers receive a soft credit check to determine their rates (a soft credit check doesn’t affect your credit score) and a hard one if they apply for a loan. If you’re approved, funds typically appear in the borrower’s account within 24 hours.

Since it focuses on riskier borrowers, Avant’s minimum interest rate is nearly 10%, which is higher than at other lenders. The company hopes to reduce that to 6% as it improves its underwriting process, says Hughes.

Like many lenders, Avant also reports loan payments to all three major credit bureaus every month. This means that those with bad credit can improve their credit scores by making timely payments.

[Compare Avant with other personal loan companies.]

What makes Avant different

Avant provides quick funding to those with bad credit, and it doesn’t charge an origination fee.

The lender also offers flexibility around loan payments. For example, a borrower having difficulty making payments may be eligible for a “due date adjustment,” which would allow extra time before the next payment is due.

If a borrower misses a payment, Avant charges a $25 late fee. However, the lender also has a “late fee forgiveness” feature. If the same borrower makes three consecutive on-time payments after the missed payment, Avant will refund the late fee.

Some qualified borrowers may also be eligible to refinance their loans to a lower interest rate, the company says. An approved borrower can refinance twice during the life of the loan.

Here’s what you need to know before applying for an Avant personal loan:

Avant’s credit standards

• Minimum credit score required: 580
• Minimum gross income required: None
• Minimum credit history: None
• Maximum debt-to-income ratio: None

Avant’s lending terms

• APR: 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 may take up to a week

Avant’s fees and penalties

• Origination fee: None
• Prepayment fee: None
• Late fee: $25
• Personal-check processing fee: None