Bad Credit Loans Compared: Upstart Vs. Avant
Upstart and Avant have both been in business for almost a decade and offer excellent lending options for customers with weaker credit histories.
In this article, we’ll take a closer look at these two innovators to examine their lending options in more detail and help you decide which option is the better fit.
Upstart Vs. Avant
Upstart
Upstart is an innovative online loan provider that was founded in 2012 by a group of former Google employees. From its humble beginnings as a disruptor in the lending industry, the company has settled into the more traditional loan space in recent years.
- Loan offerings include personal loans that can be used to pay for weddings, moving costs, medical expenses, home improvements and student debt. The maximum loan amount available is $50,000
- The company also offers debt consolidation loans that can help borrowers settle their high APR credit card balances and save money
Avant
Bad credit borrowers are Avant’s main target market. The lender specializes in providing loans and credit cards to customers who have poor credit and high debt-to-income (DTI) ratios. Also founded in 2012, the company is the same age as its aforementioned peer.
- Personal loans can be used to cover unexpected personal expenses, settle medical bills or consolidate other debts with high interest rates. The maximum loan amount currently on offer is $35,000 subject to approval
- Customers with poor to average credit aren’t rejected automatically - and this is a big contributor to the success that the platform has attained within the lending industry
Fees And Terms
Upstart prides itself on affordability and this is reflected in its schedule of fees. With no prepayment fee and origination charges of between 0.0% and 8.0% of the loan amount, this lender is cost effective. However borrowers should be careful to avoid late payments which incur a 5% penalty or a flat penalty of $15.
- Loans range in value from $1000 to $50,000 with between one and three years to repay the amount in full
- The estimated APR range is 5.69% to 35.99% with a FICO score of 620 or higher required in order to qualify
Avant’s origination fees are slightly lower than Upstart’s, coming in on average at 0.95% to 4.75%. Yet, they charge a substantial $25 late payment fee.
- Loan amounts from $2000 to $35,000 are available with an approximate APR range of 9.95% to 35.99%
- A FICO score of 580 is required in order to apply and you’ll have two to five years to settle your loan amount
Customer Service
Avant and Upstart both offer good customer service options in line with industry best practices.
Avant’s customer service includes email and telephone support.
- The company’s customer service line is open seven days a week - between 7:00 AM and 10:00 PM US Central time on weekdays and 7:00 AM and 4:00 PM on Saturdays and Sundays
- In addition to direct customer support you can also consult Avant’s website which has a comprehensive FAQs page
Upstart also offers its customers email and telephonic support.
- You can contact this lender by phone between 6:00 AM and 5:00 PM PST at its offices in San Carlos, California. Customers residing on the US East Coast should note the time difference between their own location and California before proceeding accordingly
- Similar to its competition, the lender’s website contains a wealth of information on its offerings which delivering valuable details before applying
Advantages
Avant
- Flexibility and easy approval for bad credit customers - a minimum FICO score of 580 applies to new applicants
- High debt-to-income ratio borrowers are welcome to apply
- Loan amounts up to a maximum of $35,000 are available depending on your income and other factors
Upstart
- Quick approvals - typically within one to three days
- Loans can be used for a variety of purposes including weddings and home improvements
- This lender looks beyond traditional metrics like your FICO score when assessing applications
Disadvantages
Avant
- Higher starting APR - customers will pay a minimum of 9.95% per annum
- The $25 late payment fee makes it essential to meet your installment due date but these charges can be reversed if your payment history improves
Upstart
- A minimum FICO score requirement of 620 may exclude some bad credit borrowers
- Starting loans amounts differ by state - you’ll want to check these against your state of permanent residency before you apply
Conclusion
Avant and Upstart are two innovative lenders that offer a variety of benefits to customers with less than perfect credit.
If your credit history contains a few blemishes and you have a large amount of debt, you may be approved for a loan by Avant even if other lenders reject your application.
Borrowers with a minimum FICO score of 620 may want to consider Upstart because this lender has a lower minimum APR and charges lower late payment fees.
