Avant is one of the best sources of online loans for bad credit and your chance to avoid payday lenders
One of my favorite websites for online loans for bad credit has been Avant. I used the online loans site a few times and have talked to a lot of others that have been able to get the money they needed in less than a few days.
In fact, being able to find lenders like Avant and other online loans for bad credit was part of the reason I started this blog. Knowing the best places for bad credit loans can help you avoid the mistakes and high interest that trap many people.
Getting caught in the housing bust left me with a credit score of just 540 on the FICO scale. I spent a year borrowing from payday lenders and paying high interest rates trying to dig myself out of debt. By 2012, my credit had improved a little but not to the point that I could get a traditional bank loan or any other loans at reasonable rates.
Towards the end of 2012, my wife and I needed just $10,000 to finish fixing up a foreclosure house we bought to live in. Payday loans weren’t going to cover it and the interest rate on some bad credit loans sites would have bankrupted us. Fortunately, I was able to find Avant and get the money we needed to finish the house.
Since then, I’ve tried out other online loans for good and bad credit borrowers with Avant still one of the best I’ve found.
Are online loans sites like Avant different than other loans?
Avant and other online loans sites make unsecured personal loans. Being unsecured means the loan will still go on your credit report but you won’t have to put up collateral like your house or car. You should always try to repay your online loans but you won’t lose your house if you can’t. Loans are usually available for a year up to five years with monthly payments.
Personal online loans can be taken out for any reason but the most common is for debt consolidation to pay off high-interest credit card loans. We used an Avant loan with a 14% rate to pay off $6,000 in credit cards and other debt that had interest rates of 18% and higher. By paying off the high-rate debt, we were able to save more than $500 and pay off the loan early.
Most online loans are available for up to $35,000 with fixed monthly payments depending on your rate and loan term. What I like about Avant is its easier credit requirements for loans for bad credit with a minimum FICO score of 580 compared to most online loans sites that require a score of 640 or higher.
The loan application for online loans takes less than ten minutes with a verification of your bank account. If your loan doesn’t require any document verification, the money may be in your bank account in less than 24 hours.
How to Apply for an Avant Online Loan
The process to apply for an Avant online loan is pretty simple. You start by creating an account including some personal information and password. Avant uses the same 128-bit internet protection that’s used in large banks so your information remains safe.
After you fill out the amount you want, Avant will do what’s called a “soft” check on your credit. This is just to verify the information you provided in the loan application and doesn’t go on your credit score or hurt your credit.
After this first loan step, Avant will tell you the interest rate and how much your payments will be on your online loan. Rates start at just under 10% while rates on loans with bad credit will be higher.
If you agree to the interest rate and terms on the loan, Avant will run a “hard” check on your credit for one last verification. Avant complies with the Truth-in-Lending Act so you’ll always get a print out of loan terms before you commit to the loan. This second check on your credit is the one that goes on your credit report with your loan.
Since Avant isn’t a peer lender like Lending Club, you don’t have to wait for your loan to be funded by investors. Online loans sites like Avant specialize in funding their own loans for bad credit borrowers.
Benefits of an Avant Bad Credit Online Loan
Besides the lower credit score requirement compared to other online loans for bad credit, one of the benefits of Avant is no origination fee. Most other online loans sites charge a fee of up to 5% on your loan amount, meaning you’ll pay a $50 fee for every $1,000 you borrow. The origination fee is how other online loans sites charge lower rates but still make more money off your loan, because they get that lump sum fee upfront.
Avant also doesn’t require a minimum income or a credit history on their loans, a fact that makes it perfect for bad credit loans or people with no credit. Most of the readers I’ve talked to that were turned down for loans on other websites have been approved on Avant.
Finally, an advantage of all online loans is that they can help build your credit score faster than using credit cards. Installment loans are reported on your credit report as non-revolving loans, the kind that are paid off on a monthly basis with fixed payments. This is different from credit card debt which goes on your report as revolving loans which have changing payments and no payoff date.
Drawbacks of an Avant Online Loan
The drawback of an Avant online loan is the same as any loan, the interest you have to pay on the debt. While not having to pay the 5% origination fee will help lower the total cost of your loan, you’ll still have to pay monthly interest as part of your payments.
The chart helps to show the total cost of an Avant online loan for $36,000 over three years and at a 12% interest rate. The monthly loan payment will be about $167 with interest amounting to $1,000 over the three years. If you can make $235 a month payments and pay the loan off in two years, your total interest will only be $650 so try to pay the loan off early.
Frequently Asked Questions for Bad Credit Online Loans
What other fees does Avant charge?
While Avant doesn’t charge an origination fee on its online loans, you will have to pay a fee for late payments or non-sufficient funds. These fees are $25 but only charged if you miss a payment.
How do online loans affect my credit score?
Your credit score is only affected after you agree to the loan terms when the site verifies your credit information. If you do have bad credit already, this credit check isn’t really going to affect your score that much. You’ll be able to get your loan at the rate you saw on the loan agreement and will start improving your credit score as you pay off the loan.
What if I miss a payment or can’t pay off my loan?
Another feature of Avant is their late-payment forgiveness policy which can help you avoid the $25 late fee. If you think you are going to miss a payment, contact Avant customer service to let them know. If you continue to miss payments, it will go against your credit report and hurt your score.
How fast can I get my loan?
Avant has built a reputation as one of the quickest online loan sites, even on loans for bad credit. Compared to other loan sites, which can take up to a week, you can usually get an Avant loan in less than a few days and as soon as a day.
Avant Online Loans Review Summary
There’s a lot to like about Avant and its online loan offer for bad credit borrowers. Besides an easier credit score requirement and late-payment forgiveness, the site offers customer service hours seven days a week by phone, email or chat.
Avant also offers personal loan refinancing which means you can pay your loan off with another loan at a lower rate. While five-year loans tend to be higher rates, you can refinance your loan at a lower rate as your credit score improves.
We were able to refinance our house after we finished remodeling it and pay off the Avant loan. Unlike other online loans for bad credit, Avant loans don’t charge a prepayment fee so we were able to pay off the loan with only about a year of interest. The easy terms and relatively low rates on loans for bad credit make Avant a good option for most borrowers. If you’re looking for a loan on bad credit, make sure you check out Avant to check your rate before getting caught in the spiral of high rates from other lenders.