By : 
Mr Credit Card
Mr Credit Card
Avant Personal Loan was introduced back in 2013. Back then, they had the first analytics based lending platform, using big data and advanced machine learning algorithms that takes into consideration factors other than simply credit scores. Avant personal loan target market is middle class borrowers who are "near-prime". Their customers have an average FICO score of between 600 to 700 though they do accept scores as low as 580. Avant stands out from other lenders in a couple of ways. Firstly, they are great for military members who are eligible to apply for Avant SCRA benefits and get a rate of no more than 6% on their loans. Secondly, they are one of the rare lenders that allow you to use either your credit or debit card to pay your monthly payments. Though there are now many online lenders using sophisticated models to appraise borrowers, Avant still remains very competitive in the online lending space.
Pros and Cons
| Pros | Cons |
|---|---|
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Loan Details
| Loan Amount | $2,000 to $35,000 |
| APR | 9.95% - 35.95% |
| Maturity | 1 to 5 years |
| Origination Fee | Up to 4.75% |
Good Features
6% APR for Military Members (through Avant SCRA)
Avant has one of the best SCRA programs available to members of the military. For eligible members, SCRA provides an interest rate of no more than 6% on all eligible loans. In addition , you will not be charged any late fees or non-sufficient funds fees during active service.Below is the criteria to be eligible for Avant's SCRA program:
- Those active in the Army, Navy, Air Force, Marine Corps, National Guard, or Coast Guard, including reservists serving on active duty, as defined in Section 101(d)(1) of Title 10, United States Code.
- Those who are a commissioned officer of the National Oceanic & Atmospheric Administration (NOAA) and Public Health Service (PHS) on active service
- Those who are a servicemember who is absent from active duty on account of sickness, wounds, leave, or other lawful cause
Uses AI Modeling and Looks at more than your credit score
Avant was one of the first lenders to use Big Data Analytics based modeling and look at factors beyond your credit score when appraising your application. Many people who would not have been approved with lenders who just use conventional credit scoring models will get approved with Avant.Can Change Payment Date
Your first payment date is usually 30 days after the funds have been deposited in your bank account. You can change your payment date by simply logging into your Avant account and going to the add/change payment tab. This feature is helpful if you change jobs and your salary is paid on a different date.Can Pay by Credit or Debit Card
Avant is one of the few lenders that allow you to pay your monthly payments with a credit card. Specifically, they accept Mastercard and Discover but not Visa. They will also not charge any extra fee if you use your credit card to pay. However, your credit card issuer might treat payments to Avant as a cash advance and charge you interest immediately. This is something you have to be aware of. You also cannot use the Avant's own credit card to pay your monthly payments.Soft Pull Pre-approval
Avant allows you to go through a pre-approval with a soft pull that does not affect your credit score. If you are approved, you will be presented with offers and should you decide to go ahead and apply for that offer, only then will there be a hard inquiry. The fact that Avant offers a soft inquiry pre-approval means you should not hesitate to check them out to see what offers you are able to get and compare it with other lenders.What Avant does not provide
No Joint or Secured Loan
You can only apply for an Avant personal by yourself. They do not accept joint application nor will they offer you a secured loan if your financial profile is too weak for an unsecured loan.May Charge Origination Fee
Avant may charge an origination fee of up to 4.75% of the loan amount. Or they may not charge you at all. While most lenders do charge an origination fee, a few do not. All we would say is that there are many lenders who have higher origination fees than Avant. 4.75% (which is the maximum that Avant will charge) is the average of what most lenders will charge.No Rate Discounts
Unlike some lenders, Avant does not offer any rate discounts. The lenders who offer rate discounts tend to require you to jump through some simple hoops like signing up for autopay.Requirements
- Credit Score - The majority of Avant personal loan customers have credit scores between 600 and 700. Having said that, Avant has stated that the minimum credit score required is 580.
- Debt to Income Ratio - While there are no official guidance on this issue, Avant's personal loan customers have a DTI ratio of 30% before they got the Avant loan. So if you are looking to apply for Avant, your DTI ratio should be around this area.
- Income Requirements - Avant requires an annual minimum income of $20,000 though most of Avant customers have monthly income in the $36,000 - $48,000 range.
Our Take: Great for Those with 600 - 700 FICO scores and Military Members
The majority of their customers have credit scores between 600 and 700 (which Avant defines as near-prime) and they also have a SCRA program for military applicants that charges no more than 6% APR on their loans. If you have your documents in hand when you apply, then the approval process should not take more than a couple of days and the loan amount will be deposited in your account the next day afte approval.
Avant lacks a couple of features that some online lenders have. Firstly, they do not pay off your creditors directly (for those taking debt consolidation loans). Secondly, they do not offer any rate discounts.
To sum up, after our evaluation and review, we have decided to give the Avant Personal Loan a 4 out of 5 star rating for it's very good SCRA program for military members, it's relatively quick turn around time, competitive terms, ability to pay with debit and credit card and a pre-approval process with no impact on your credit scores. It's lack of rate discount offering prevents us from giving it a higher rating. If you are a military member and/or have a credit score between 600 and 700, you should at the very least go through the Avant pre-approval process and see what offers you can get from them and compare with other lenders (most also allow you to go through a pre-approval process). If Avant offers you the best terms, then go for it.
Lawsuit Involving Avant
In 2020, Avant settle with the Colorado Attorney General’s office, who alleged that they used out-of-state bank to charge rates that were above the states maximum rate that lenders were allowed to charge.
In 2019, Avant settled with the FTC for $3.85 million who alleged that Avant engaged in various unfair loan practices including requiring customers to enroll in autopay. The FTC has begun returning funds to more than 17,000 customers in 2022.
These troubles are now behind Avant and we are not aware of any pending issues they are having at the moment.
Avant Loan Application Process
- Name and Address
- Whether you rent or own and your monthly housing payment
- When you started living in your current address
- Date of Birth
- Phone number
- Email and Password Creation - You will be asked to create an Avant account so that if you are pre-approved, you can manage your document uploads and monitor your approval process through the Avant dashboard.
- Social Security Number
- Income Type - There are 4 choices: Employed, Self-employed, Permanent Benefits/Retirement (Pension, 401k, Social Security), Temporary Benefits (Disability, One-time Distribution, Unemployment)
- Monthly Net Income
- Purpose of Loan - Your choices are debt consolidation, emergency expenses, Life event, car repair, Home Improvement, Moving/Relocation, Vacation and others
- Loan Amount - From $2,000 to $35,000
- Your Credit Score Range - Your choices are Excellent (720+), Good (670 - 719), Average (620-699), Fair (580 - 619), Poor (< 580), Not Sure
If you are pre-approved, you will be presented with loan offers and if you decide to go ahead, there will be a hard inquiry. At this stage, you will be going through the application verification process. You may and probably will be asked to provide documents to verify your identity, employment, income and bank account details.
To verify your identity, Avant makes you go through their "electronic knowledge-based authentification" (KBA). This involves asking you a series of questions that only you should be able to answer.
You also have to upload certain documents in Avant's online verification tool (OVT). These include documents like paystub, W2 statements. For employment verification, you have to fill in your employers details including phone number and give authorization to Avant to call your employer to verify that you are employed. In order to expedite the verification process, Avant suggest you provide the following information: your job title, the department you work in, the best number to reach your employer, best time to call, names of specific people to speak with (supervisor, HR representative), if there is an extension we should dial (personal, or for a supervisor, HR, etc.). You will also be asked to upload your most recent bank statements.
You may also be asked to provide other documents not listed on their OVT (online verification tool). For example, if you are self-employed, you will be asked to provide the last 2 years of your tax returns or tax transcripts.
Though Avant may take a couple of days to approve your loan, they will fund your account once it is approved and you should get the loan amount in your designated bank account the day after approval.