Avant Loans Versus Lending Club
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- The Good
- Only average credit score required
- Easy application process
- Good customer service
- The Bad
- Loans generally only for debt consolidation and emergencies
Avant Loans prides itself on being a smarter solution to payday loans or high interest credit cards. It specializes in lending for people who either need to consolidate their debt or are in financial trouble and need a lifeline. This makes it a great alternative to high-interest-rate payday loans.
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- The Good
- Easy to use
- Average credit welcome
- Partial loans available
- The Bad
- Customer service can be a bit slow
Lending Club is the gold standard in the best online loans. It was one of the first online companies to offer peer lending services. The company opened in 2006 to give people access to a wide range of loans, including personal, business and student loans. Check out our Upstart vs. Lending Club comparison to see how Lending Club stacks up to another top-rated loan service, Upstart Loans.
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- APR
- 9.95% to 35.99%
- Origination Fee
- 0.95% to 4.75%
Just like any lender, Avant’s rates fluctuate depending on your credit report and other factors that it uses to determine your eligibility for a loan. The APR ranges between 9.95 percent and 35.99 percent. There is also an origination fee, which ranges between 0.95 percent and 4.75 percent. Avant’s late fee is $25, and the check-processing fee is $15.
- APR
- 5.99% to 32.99%
- Origination Fee
- 0.99% to 5.99%
Just like any lender, Lending Club’s rates fluctuate depending on your credit and other factors that it uses to determine your eligibility for a loan. The APR ranges between 5.99 percent and 32.99 percent. There is also an origination fee, which ranges between 0.99 percent and 5.99 percent. Lending Club’s late fee is $15 or 5 percent, whichever is greater, and the check-processing fee is $15.
- Maximum
- $35,000
- Minimum
- $1,000
The maximum amount for Avant is $35,000, which is in line with most other online lending providers, while the minimum amount is $1,000, which is the lowest minimum among online person lending providers, making it a good option for anyone looking for a quick, low-cost loan.
- Maximum
- $40,000
- Minimum
- $1,000
The maximum loan amount for Lending Club is $40,000, which is in line with most other online loan providers, while the minimum loan amount is $1,000, which is the lowest minimum among online personal loan providers, which makes it a good option for those who are looking for a quick, low-cost loan.
- Qualifications
- Average to excellent credit
- Proof of some income
- Must be at least 18 years old
Avant operates like most other online loan services when it looks for qualifications for approval, including proof of income and legal adult status. Avant, however, does cater to people with lower credit scores, so if you are worried about getting approved because of your credit score and credit report, you should check out Avant. The minimum credit score Avant will accept is around 580. However, there is no minimum when it comes to your income or your debt-to-income ratio.
- Qualifications
- Average to excellent credit
- Proof of income
- Low debt-to-income ratio
- Must be at least 18 years old
Like traditional loans, you need certain qualifications to get approved. Lending Club looks for an average credit score or above, along with proof of income and a low debt-to-income ratio. You must also be 18 to apply.
- Loan Process
- Application > Application Review > Approval
Avant works much the same way a traditional bank would. You can go online to fill out an application or call to have someone walk you through it. Once your application is filled out and submitted, Avant will review it and then let you know if you are pre-approved or not. If you are, Avant will get in contact with your bank to get information it needs to complete your loan. Once it has all the information it needs, Avant will contact you with the loan terms, including your monthly payments.
- Loan Process
- Application > Loan Offers > Application Review > Investors Fund Loan > Loan Approval
Lending Club, since it is a peer-to-peer lending service, has a slightly more complicated application process. First, you fill out an application that includes personal and financial information. You are then assigned a “grade” that will determine your interest rate and tell investors how desirable you are as a borrower. You will be presented with multiple loan offers, and you can choose one or decide to cancel your application. Once you pick a loan offer, your application will be reviewed and approved, and then presented to individual investors (who are screened by Lending Club.) Investors have one to two weeks to decide whether to fund your loan. If your loan is fully funded, it is deposited into your account within four business days.
- Partial Loans
- No
Like traditional banks, Avant does not offer partial loans. If you are not approved for your amount, you can apply again for a lower loan amount.
- Partial Loans
- Yes
Yes, Lending Club offers partial loans. If investors commit to at least 60 percent of your loan, you can decide to accept the partial amount or turn it down and apply for a new loan.
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Everyone tells you that you should have a rainy day fund in case of emergencies, right? Well, having one is easier said than done, especially if you are living paycheck to paycheck. Sometimes, we all need that emergency cash to deal with … well … emergencies. Many people who don’t have good credit turn to high-interest credit cards or payday loans when they find themselves in this situation.
This is where Avant likes to jump in. Avant will lend to people who don’t have the best credit report history without charging them the crazy high interest rates that payday loans charge. This not only keeps people from going into massive debt, but it allows them to borrow more money if they need to.
Almost half the people who use Avant take out a loan for debt settlement purposes. So if they are drowning in credit card debt and have high interest rates on the credit cards, they can use Avant to pay the credit cards off, and then they only have to pay down the debt with the lower interest rate.
How Does Avant Work?
Now, while Avant doesn’t charge the crazy interest rates of payday loans, its rates are still higher than normal online lenders’ products and services. Lenders who take on borrowers with poor credit generally charge higher interest rates, not to take advantage (well, most of them don’t try to take advantage), but because more often than not, the lenders aren’t paid back or have to take a settlement to get only a part of the money back it lent out. The higher interest rates are basically to offset the risk.
That said, you only need a 580 credit score to be approved, and there are no minimum requirements for your income or your debt-to-income ratio. You also don’t need much of a credit report history to be approved.
The process for Avant, however, is pretty much the same as other online lenders. You fill out an application, get pre-approved, pick the lending you want, send some more financial information and sign for your loan terms. The time you have to make monthly payments can go anywhere from two years to five years for repayment.
Is Avant Legit?
Avant is a legitimate lender, founded in 2012, which has raised more than $650 million in capital in the nearly five years it has been operating. Avant funds its loans through WebBank, which is a member of FDIC, which is always good peace of mind.
Avant has given $3.5 billion in lending to more than 500,000 customers in the past 5 years. It is up front about its rates and fees, and it provides all the loan terms in writing to customers before it is signed.
Avant also gets an A+ from the Better Business Bureau.
Common Avant Reviews
Overall, Avant seems to get good ratings from professional review sites for its products and services. The Better Business Bureau rates Avant at 4 out of 5 stars, as does consumer finance sites like NerdWallet, and on sites that include consumer reviews, like Credit Karma.
Avant has a total of 2,500 reviews on the business review site TrustPilot, and those reviewers’ scores average a 4 out of 5 as well. Some of the reviews on TrustPilot, which vets its reviewers, include, “I believe Avant is perfect for those who wish to improve their credit rating,” and, “The quickest response and easiest site to navigate. It was a blessing to help me at a time when other lenders did not.”
Of course, Avant doesn’t have a perfect record, and there are a number of legitimate negative reviews and complaints against the site from people who either didn’t like the service, thought the interest rates were too high or had an issue with timing. These are all legitimate concerns, but the majority of people reviewing Avant seem to have a favorable view of it.
Is Avant Right For You?
Avant is not for everyone. Even if you have excellent credit, Avant’s interest rates might just be too high compared to other lenders. Here are the questions you need to ask before you apply for an Avant loan:
- Do I have high-interest credit card debt?
- Do I have a financial emergency I need to pay for?
- Is my credit not the best?
Really, it’s the last question that’s the most important. If you have poor or even average credit, and you can’t get a loan with any other lender, Avant is a good next step. Its interest rates are higher, but not as high as other finance options like payday loans. If you are in a financial emergency, Avant is a much better option.
Even if you don’t need money right away and just want to pay off your high-interest credit card debt, Avant is a great option. If you have a lot of credit card debt, chances are your credit score is not ideal. This gives you an option to consolidate your credit card debt at, hopefully, a lower interest rate, making it easier to pay off.
Lending Club was once the darling of the online loan world, offering a ground-breaking idea with peer-to-peer lending, where average people could invest in other people’s loans. Since then, several other companies have popped up that utilize the same type of lending, some with new, fresh spins on the practice. This has left Lending Club a little bit behind, however, it is still a great online loan service for those looking for good rates and good service.
How Does Lending Club Work
Lending club is a peer-to-peer lending service, which basically means that ordinary people (who are approved by Lending Club) can invest money to fund your loan. They make money off of the interest you are charged, so it ends up being a win-win.
The first step in getting your loan is filling out an application. Then Lending Club will rank you based on that information so it can determine your interest rate. It also shares that ranking (not your personal information) with its investors when it sends out your loan to be funded. Lending Club will then give you a list of loan offers, and you choose the one that best fits your needs.
Once you’ve selected a loan offer, Lending Club will send the offer details and your ranking to its investors, who can then decide if they want to fully or partially fund your loan. Investors have one to two weeks to decide on funding your loan, so the process can take a while. Once the time is up (or if your loan gets fully funded before the deadline), you will then be presented with the full loan or a partial loan. You then decide to accept or not. If you do, you will see your money deposited in your bank within four business days.
Lending Club offers both three- and five-year loans, and will go over a payment plan with you before you accept the loan.
What Makes Lending Club Stand Out?
The biggest thing is Lending Club’s peer-to-peer lending model. If offers a two-tier business model, in that it can cater to both borrowers and investors. It also keeps Lending Club from having to have a ton of its own cash on hand to fund the loans. It’s also a plus for borrowers because some investors may be more willing to take a risk on people whose credit background is not stellar. If your credit score is not where it needs to be, check out some credit repair reviews to find a credit repair company that works for you. To learn more, check out our reviews of the top credit repair services, Lexington Law compared to Sky Blue.
The other thing that makes Lending Club stand out is its option for partial loans. This is generally something only peer-to-peer lenders do, since there may be more than one investor funding a loan. So, if your loan is 60 percent funded or more, you have the option of taking the partial loan, which is better than just being turned down and ending up with nothing.
Common Lending Club Reviews
Lending Club is pretty well-received in the online loans world, so it’s not much of a surprise that it ranks pretty well among consumer product review sites. For example, NerdWallet gives Lending Club 4.5 out of five stars.
Customers of Lending Club tend to agree. Online customer reviews of Lending Club are generally five stars, with few exceptions. Most of the reviews focus on how quick and easy Lending Club is, since everything is online and accessible with just a click of the mouse. Many customers talked about Lending Club giving them the ability to consolidate their credit card debt, which is a common use of loans from Lending Club.
Negative reviews seem to focus on people who weren’t aware of the origination fee, or felt the interest rates were too high or the process took too long.
Is Lending Club Right For You?
Lending Club does have some unique features that set it apart from other online loan services, which means it can cater to certain needs better than other services. Here are the questions you need to ask yourself when considering Lending Club:
- Do I need money quickly?
- Is my credit score not the best?
- Would I be OK with not getting the full loan?
If you are having a financial emergency and need a loan quickly, Lending Club is probably not the best place to look. Since it is a peer-to-peer lending service, it relies on individual investors to fund each loan. Once you finish your loan application, Lending Club has to send your loan details to all its investors and wait for people to fund your loan, which can take up to a week.
If, however, you can wait and you don’t have the best credit score, Lending Club is a good choice. Since it offers loans to individual investors, it is up to the investors to decide if they want to take a risk on someone with lower credit. There are investors who are willing to take that risk, meaning it might be easier to get a loan through Lending Club than traditional loan services.
Another thing to consider is the fact that Lending Club offers partial loans. If you don’t need the full loan amount, and your credit is not the best, getting approved for a partial loan is better than being turned down altogether. If, however, you have really strong credit, you will probably end up getting approved for the full amount anyway. If you aren’t, you can probably easily get a loan through another online loan service.
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