You could say Avant’s debt consolidation loans are targeted toward credit-building consumers. A FICO score of 580 is all you need to get your foot in the door. If your score is in the 700s or higher, you may want to look at a different online option, since Avant’s APRs are high, and it has an administrative fee.
Avant began in 2012 as AvantCredit with the goal of improving the borrowing experience for middle-income consumers. The company is a fintech that hooks up borrowers with loans. It’s had more than 2 million customers since it launched, but remains committed to the original goal of finding creative solutions for people looking to improve their financial situation, particularly by consolidating debt. Avant services the loans, but they are funded by WebBank, a Utah-based national consumer credit product issuer.
Avant offers debt consolidation loans from $2,000-$35,000 with 9.95%-35.99% APRs and terms of 12-60 months. Borrowers will have to pay an administration fee, also called an origination fee, of up to 4.75%.
Let’s go over the details of Avant debt consolidation loans and whether they’d be a good fit for you.
Snapshot:
- Type of Debt Relief – Debt consolidation loan
- Eligibility and Requirements – 580 minimum credit score, U.S. checking or savings account at a bank or credit union
- Rates and Fees – 9.95%-35.99% APR, administration fee up to 4.75%; 25$ late fee; $15 insufficient funds fee
- Credit score impact – Minimal for initial rate check, hard inquiry to apply
- Consumer Reviews – Mixed
How Avant’s Debt Consolidation Loans Work
An Avant debt consolidation loan is actually a personal loan, and it’s up to you to use it to pay off your creditors once the money is in your account.
The purpose of a debt consolidation loan is to roll your high-interest debt – i.e., credit cards – into one monthly payment. Ideally, the interest rate will be lower than what you’re paying on the debt you’re consolidating, but even if it’s the same, you will likely end up saving money since a loan has a fixed term and you can continue paying on a credit card, forever.
If you’re not sure the rate Avant offers will save you money, compare the loan term and APR you’re offered to the section on your credit card statements where it shows how much you’ll pay if you continue to make only minimum payments, and how long it will take to pay it off. Remember, those numbers only apply if you don’t charge any more on the card. It’s likely the loan will save you a lot of money but again, once you pay off the card, close the account and don’t rack up more credit to truly save money and get out of debt.
In most cases, once you’re approved for an Avant loan, the money will be in your account the next business day if approval is before 4:30 p.m. central time. Your bank may have policies that will keep it from being available to you for additional days.
Avant says it’s safe to link your credit card to your Avant account. It hosts its secure servers with Amazon Web Services, which is one of the largest ecommerce and cloud computing companies in the world. Avant also encrypts all personal, sensitive data.
You can make automated payments, which is the best option to ensure on-time monthly loan payments. The money is automatically taken from your bank account every month. You can also pay by paper check, cashier’s check, money order, credit card or debit card. If you don’t enroll in auto pay, make sure you make the payment on time every month to avoid fees and to protect your credit score. It goes without saying that it doesn’t make financial sense to make debt consolidation loan payments with a credit card unless you’re paying off the card’s balance every month.
If you enroll in auto pay, be sure the right amount is in your account on the payment date, so you don’t get hit with an insufficient funds fee.
How to Apply for an Avant Debt Consolidation Loan
All consolidation loan applicants must have a personal checking or savings account at the time of application.
The first step toward getting an Avant debt consolidation loan is to visit the website and click on “check your loan options.”
You’ll fill in personal information like name, address, income, and employment, and Avant will quickly show you loan options.
This means a soft credit check that won’t affect your credit score.
Your offers will depend on the information you provide, and may vary based on credit worthiness, income, and state law if it applies. (Some states have rules on how little or how much someone can borrow, and what the APR can be.)
You pick out an amount up to your approved limit if you want to continue, which means a hard credit check if you accept the loan. This can hurt your credit score temporarily if you’ve had more than a couple of these in the past two years.
You may be asked for verification of income, employment, identification, and bank accounts, which could involve uploading documents. A customer service representative may contact you to help with the process.
Once you finalize the loan, Avant sends the money to your account. It’s up to you to pay your creditors once you have the debt consolidation money.
Avant Loans for Self-Employed
If you’re self-employed, you can still get an Avant debt consolidation loan. You have to have been self-employed for at least two years. You supply your two most recent years’ complete official tax documentation. Include any cover pages provided by your tax preparer.
You can also provide a copy of your Tax Return Transcripts, which are available on the IRS website.
You can’t use a business account to apply for an Avant debt consolidation loan if you’re self-employed, since customers can’t receive personal loan proceeds in an account used for business purposes. As with all other applicants, you must have a personal savings or checking account.
Avant Debt Consolidation Eligibility and Requirements
Avant’s only requirements are a credit score above 580 and a checking or savings account with a bank or credit union.
Most applicants, who are approved for loans, have credit scores between 600 and 700, according to Avant.
If your credit score is below 600, you may want to take a few months to work on increasing it. The higher your score, the better your rates for an Avant debt consolidation loan will be. Making payments on time, lowering your balances, and not applying for more credit cards are all good ways to increase your credit score. You can see it change in as little as 30 days if you focus on paying down maxed-out credit limits.
Avant Debt Consolidation Loan Rates and Fees
Avant’s APR range of 9.95%-35.99% is higher than a lot of its rivals because that’s the price people with lower credit scores often pay for debt consolidation loans.
There is also an administrative fee of up to 4.75%, which is taken out of the loan amount, and is based on your credit score and income. The amount deposited in your bank will be reduced by the fee, but you will still pay the full amount of the loan, including APR on the full amount.
For instance, if you got a loan of $10,000 with an administrative fee of 4.75%, then $475 would be deducted from your loan before it was deposited in your account. You would receive $9,525, but still be making monthly payments and paying APR on a $10,000 loan. Avant tells you the fee amount upfront when it presents your loan options.
There is a $25 late if your payment is more than 10 days late, and a $15 insufficient funds fee. Your bank may also ding you if a payment goes in and you don’t have the money in your account to cover it.
Pros and Cons of Debt Consolidation with Avant
Avant’s debt consolidation loan doesn’t ask for much, but it doesn’t give much either. Consumers looking for larger loans to tackle six-figure debt won’t find them here. What they will find are drastically low credit score requirements and interest rates ranging from 9.95%-35.99%.
Pros of Avant
- Low credit score accepted
- No income requirement
- Fast funding
- Borrower pays off creditors
Cons of Avant
- Low maximum loan amounts
- High APR
- Administration fee
Is Avant’s Debt Consolidation Loan Right for Me?
Avant is for borrowers with lower credit scores who struggle to find funding through traditional sources. These consumers have too much debt yet not enough positive credit history, and for many lenders, they’re not worth the risk. Avant’s mission is to help such borrowers improve their credit and financial situation.
If that’s you, then an Avant debt consolidation loan may be a good fit. You will pay higher interest rates, but you can pay down your high-interest debt and build better credit, then take the next step to financial success.
The better your credit, the better your rate, the less the loan will cost you and the more money you’ll save by consolidating your debts.
If your credit score is above 700, however, you can probably get a rate lower from another online lender than Avant’s lowest APR, 9.95%.
Avant Reputation and Consumer Reviews
Avant has a Better Business Bureau rating of A, just below its highest rating of A+. The rating assesses the company’s customer service performance.
In 2021, Avant had to pay a $1.6 million judgment brought by the Massachusetts attorney general for violating that state’s debt collection regulations by not providing consumers with proper debt validation notices and making illegal, high volume debt collection calls to people who owed money. Avant corrected its collection practices, including providing the required validation notice in its collection letters for consumers falling behind on payments, and updating its call policy to comply with state regulations.
Customer reviews are largely positive. Trust Pilot gives Avant 4.6 stars out of 5, with 83% of 25,092 reviews on the site 5 star. Positive reviews that focused on personal loans cited how easy it was to apply and that they got a rate that worked for them. Positive reviewers that mention customer service are largely happy with the experience.
Of the negative reviews on Trust Pilot and the BBB site, the biggest complaint was poor customer service, which was a feature of almost every negative review even if the main complaint is about something else. Many negative reviews have to do with Avant’s credit card services, particularly not receiving cards in the mail after being approved for one. When it comes to loans, some complained of being charged after they closed their account, and technical issues with the app or making payments. Negative reviewers were also unhappy at being denied loans, though they felt as though they qualified for one.
Alternatives to Avant Debt Consolidation Loan
If Avant’s debt consolidation loan doesn’t work for you, and you want to try for a better rate, even if you’re looking to get a loan with bad credit, there are some options that may work.
Some other online lenders are:
- Discover has APRs much lower than Avant, at 6.99%-24.99%, and loan amounts are a little higher, at $2,500-$40,000 for 36-84 month terms. Discover takes a holistic approach, which includes credit history, finances, income. Unlike Avant, though, Discover has a minimum income requirement of $25,000.
- LightStream is a good option for borrowers with good to excellent credit. Loans can be up to $100,000, and rates are capped at 20.49%. You’ll need a credit score of at least 680 to apply, and having savings or a retirement account will also work in your favor. Lightstream doesn’t have a prequalification option, so applying will be a hard credit pull. Make sure you’ve got good credit and are definitely interested before applying, since it will affect your credit score.
- Prosper, the original peer-to-peer lending company, likes to see a credit score of 600 or higher. It allows up to a 50% debt-to-income ratio, offers loans from $2,000 to $50,000, and repayment plans from 24-60 months, with 6.99%-35.99% APRs. It also has origination fees of 2.41%-5%.
Alternatives to a Debt Consolidation Loan
If your credit score is below 600 and you’re desperate to decrease your credit card or other high interest debt, but are having trouble finding a debt consolidation loan that makes financial sense, or even getting approved for one, it’s time to consider non-loan solutions.
Credit counseling at a nonprofit credit counseling agency can help you figure out your debt relief options. Talking to a counselor at a nonprofit credit counseling agency, local Community Action Program, or even the housing authority, is free. Counselors are required by law to offer advice that’s in your best interest, rather than pitch a product. They’ll review your finances with you, help you create a budget and suggest resources and debt relief options.
The credit counselor may suggest a debt management plan. This isn’t a loan, but a program offered by nonprofit credit counseling agencies. The counselor works with credit card companies to lower your interest rates and make your monthly payment affordable on a budget. The plan takes 3-5 years to complete and can eliminate your debt while improving your credit score.
The best thing about it is that you’re not borrowing money to pay off debt but working in a strategic way to lower your debt.
