Avant personal loan review

Avant overview

Avant is a state-licensed personal loan lender. It was founded in 2012 by a team, including some of its investors, with deep experience in consumer credit and lending.

Product overview

Avant makes personal loans to individuals with a wide variety of credit profiles. Most of its customers that receive loans have a credit score of 600 to 700. Rates and terms will vary based on your application and will depend on your financial situation. Some of the factors Avant considers include credit history, employment history, and loan repayment history.

Application process

Avant’s application process generally takes less than 15 minutes and funding can happen as soon as the next business day. If approved, Avant will deposit the cash directly into your checking account via ACH.

As you’re going through the process, checking your loan eligibility will not impact your credit score. At this stage, Avant will only do a soft inquiry to check rates and terms; however, if you choose to continue past this point, a hard inquiry will be made. A hard inquiry may impact your credit score and will be visible to third parties reviewing your credit history. This credit pull process is standard when applying for a personal loan.

Avant fees

Administration fees

Avant may charge an Administration Fee, which is defined on its website as an upfront fee automatically deducted from your loan proceeds at the time the loan is funded. The fee is non-refundable and, if applied, is only charged if your loan is issued. The fee typically varies between 0% and 4.75% of your loan amount. This is consistent with other personal loan providers.

Late payment fees

Late fees may apply if a scheduled payment is missed; the amount and time of the application of the late fee will vary by state.

Dishonored payment fees

Dishonored payment fees may apply if a scheduled payment is returned unpaid.

APR

The APR that Avant charges will vary by state and applicant. Your rate will depend on your financial situation.

Example costs

As an example of how Avant’s fees and costs add up, a $5,700 loan with an administration fee of 4.75% ($270.75) would mean you’ll get $5,429.25 deposited to your bank account. Let’s say the loan is repayable in 36 monthly installments and has an APR of 29.95%, then your monthly payments would be $230.33.

Credit reporting

Avant reports to the three major credit bureaus. Reporting to the bureaus is great, as that means responsible use of credit with Avant (i.e. paying your loan off and making on-time payments) may impact your credit score. It also means missing payments may impact your score.

Avant's evolution

Avant is based in Chicago. The team started working together in 2012 and made its first loans in early 2013. By early 2014, according to Built in Chicago, Avant had made over 25,000 loans. The team includes the founders of CashNetUSA, a payday lending company.

Avant started off making short-term installment loans to underbanked and poor credit individuals. In recent years, it has expanded and moved into longer-term personal loans targeted at the subprime to prime market. In 2019, it has over 500 employees, has funded over $1.8B in loans, and served over 600,000 consumers.

FTC violation

In April of 2019 the FTC found Avant had "engaged in deceptive and unfair loan servicing practices" and fined Avant $3.85 million. The issues were around how Avant serviced its loans after the loans were originated (approved and given out). “We have alleged that Avant gave the run-around to consumers trying to repay their loans, because of systemic issues with the company’s loan servicing platform,” said Andrew Smith Director of the FTC’s Bureau of Consumer Protection. “Online lenders need to understand that loan servicing is just as important to consumers as loan marketing and origination, and we will not hesitate to hold lenders liable for unfair or deceptive servicing practices.”

Avant has not admitted to the FTC allegations, but has said that it settled to avoid a prolonged lawsuit so the company can focus on running the business. We do not have any proprietary insight into these allegations.

Some more about Avant

Avant has raised close to $130 million in funding from August Capital, Victory Park Capital, and QED Investors. It is most likely that these funds are a mix of debt and equity. More specifically, some of these funds are designed to be used as loans rather than to be used to build operations, which would explain the relatively large amount of capital raised. QED Investors was founded by one of the founders of Capital One.