Getting approved for a personal loan with bad credit often means jumping through a few hoops. But it doesn’t have to be this way.
Avant and Upstart are online lenders with more flexible credit requirements to help you access the financing you need. Avant is based in Chicago and offers credit cards and loan products. Upstart is an online lending platform that passes your information to lenders in its network to find you the best deal on a personal loan.
Avant versus Upstart at a glance
Avant is a direct lender, while Upstart allows you to view multiple loan offers and find the best fit all at once. Below is an overview of the key features of each, so you know what to expect when you apply for financing.
| Avant | Upstart | |
|---|---|---|
| Bank rate score | 4.7 | 4.8 |
| Better for | Borrowers with poor or fair credit | Rate shopping |
| Loan amounts | $2,000 – $35,000 | $1,000 – $50,000 |
| APRs | 9.95%-35.99% | 6.40%-35.99% |
| Length of the loan | 12-60 months | 36-60 months |
| Cost | Administration costs: up to 4.75% | Origination fee: up to 12% |
| Minimum credit score | 550 | No |
| Time for financing | As soon as the next working day | As soon as the next working day |
Avant personal loans
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in our bank interest overview
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Plus points
- Suitable for borrowers with low and fair credit.
- Manage your loan easily with the mobile app.
- Fast financing.
Cons
- Not available in all 50 states.
- High loan administration costs.
- No co-borrowers allowed.
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Avant has unsecured personal loans with fast financing speed. The loans are aimed at borrowers with poor or fair credit, and you can use the proceeds to finance home renovations, consolidate debt, cover unplanned expenses, or however you choose.
You will notice that they have many similarities to Upstart’s personal loans. However, the minimum loan amount is slightly higher and you can opt for a shorter loan period to keep borrowing costs low. However, Upstart allows you to borrow more if you need to finance expensive expenses or consolidate higher debt.
Avant also charges administration costs that are slightly higher – although not as high as Upstart’s potential origination fee. A higher credit score means this may not be a cause for concern. Otherwise, this could have a negative impact on the loan amount paid to you, as the administration fee will be deducted from the amount you borrow.
Start personal loans
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Plus points
- Accessible to borrowers without credit.
- Low starting APR.
- Financing for the next day.
Cons
- Costs for originating a loan.
- No co-signers or co-borrowers.
- Limited loan term options.
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Upstart is an online marketplace for loans that connects potential borrowers with banks and credit unions in its extensive network. The platform works with lenders who make loans available to borrowers with limited credit history by using an artificial intelligence (AI) model to assess more than just a person’s creditworthiness. Because of the way the AI model works, it is possible to access a loan with no credit score.
Accessibility entails costs in the form of a hefty fee for taking out loans. The start-up is also inadequate in terms of flexibility. You can qualify for a significant loan amount, but there are only two loan terms to choose from. Still, the low starting APR could offset the downsides if you have good or excellent credit.
How to choose between Avant and Upstart
Avant and Upstart have flexible guidelines for qualifying for unsecured personal loans. You may qualify for financing with less-than-perfect credit, and the maximum APR is capped at 35.99 percent. And while that number is higher than good lenders, it’s significantly lower than payday loans or other expensive options.
That said, loan ranges vary between lenders. There are also other financing costs to consider when evaluating the differences between the two so you can choose which is most ideal for your financial situation.
Avant is better for borrowers with poor or fair credit
Although Avant states on its website that most borrowers have a credit score between 600 and 700, 550 may be enough to get approved for an unsecured personal loan. You can also save a bundle by choosing Avant over Upstart, as the maximum administration fee is less than half of what Upstart charges. However, the higher starting APR could be a problem if you apply at the lower end of the credit score requirement.
Upstart is better for rate shopping
A credit score of 550 or higher might work with either lender, but Upstart shops your information to its partner lenders who consider applicants from all credit backgrounds. This means you can get approved even with a minimum credit score of 300 or if you don’t have enough credit history to generate a score.
A starter may also be the better option if you’re on the opposite end of the credit spectrum and have an excellent score. The starting APR for personal loans is just 6.40 percent, a fraction of the industry average of 13.50 percent for borrowers with good or excellent credit.
Compare lenders before applying
Check your rates with Avant and Upstart before applying for a personal loan. Both lenders offer online prequalification tools so you can view potential offers and compare loan quotes to determine which is best. It’s also worth getting quotes from other lenders to ensure you get the best deal on your loan.
