Avant vs. Upstart

Avant vs. Upstart loan offerings

Avant focuses on serving customers with fair credit, while Upstart uses an AI-driven model to provide loans for those with a thin credit file. Both lenders offer convenient online applications and servicing, along with flexible terms for borrowers who may not be able to qualify for a loan from a major bank or lender.

Avant offers personal loans and credit cards to those with credit scores as low as 580. Avant's APRs are higher, ranging between 9.95% and 35.99%. However, its fast funding and availability of loan amounts as high as $35,000 make Avant personal loans an attractive choice for those who can’t get a loan elsewhere.

Upstart offers personal, debt consolidation and auto loans, and it can approve borrowers with steady income even if they have no credit history. This lender uses a unique AI tool to assess creditworthiness, taking into account factors like income, education and job history to qualify borrowers for loans ranging between $1,000 and $75,000.

Avant vs. Upstart rates and fees

Potential borrowers should be aware of interest rates and fees before applying for a loan with either Avant or Upstart.

Origination fees

Both lenders charge origination fees, but Upstart’s maximum is higher than Avant’s. Both Avant and Upstart deduct these origination fees from your loan proceeds before they are disbursed, which lowers your total loan amount. You’ll need to account for this when requesting the loan amount.

APRs

Both Avant and Upstart offer loans to those with poor or no credit, which means they’ll charge higher annual percentage rates (APRs) in order to offset the increased risk inherent in their loan products. Avant’s lowest rate is higher than Upstart’s, which makes Upstart a slightly better choice for well-qualified borrowers.

Compare total loan costs

Before picking a lender, make sure Upstart’s higher origination fees don’t cancel out its lower starting rates.

Late fees and penalties

Avant charges a flat $25 for late payments, while Upstart has adopted a sliding scale methodology of $15 or 5% of your outstanding loan balance, whichever is greater. As such, the size of your loan is a major factor when deciding which lender has the better late fees policy.

Avant vs. Upstart eligibility criteria

Both Avant and Upstart offer loans to non-prime borrowers with poor credit or no credit history, but they use different methods to evaluate creditworthiness of applicants.

Avant

If your credit score is very poor, Avant might be the best choice for you. The company’s official credit score minimum is 580, but some sources claim Avant may consider applicants with scores as low as 550. Your chances of being approved are good if you have a bank account in good standing and can demonstrate a $1,200 monthly net income from just about any source (including income, alimony or child support).

Avant uses traditional underwriting methods and doesn’t allow for a co-signer or co-borrower in order to enhance your odds of approval. Avant loans are available in all states except Colorado, Hawaii, Iowa, Maine, Massachusetts, New York, Vermont, Washington and West Virginia.

Upstart

Upstart is a legitimate lender that uses artificial intelligence to evaluate creditworthiness. It’s a great option for those with no credit history at all, such as teens or those just entering the workforce.

Instead of traditional factors like income and credit score, this lender considers factors like job history and education when determining whether to approve your loan request. Upstart’s service availability varies by state.

» REAR MORE: What to know before taking out a personal loan

Customer reviews and reputation

If you’re comparing Avant vs. Upstart, reading customer reviews can give you a good idea of the kind of experience you may have with these lenders.

Both lenders have received a mix of positive and negative reviews. Here’s what ConsumerAffairs reviewers have said:

Avant

• Belinda in Fort Wayne, IN: "They were able to approve me for a loan. I couldn't believe how fast it all happened. Thanks for being there for me at this time. I had my money the very next day."
• Keith in Las Vegas, NV: "What a shady company. After being with them for over a year, they slapped me a $8.99 monthly fee and read my APR by 6% to 35.99%. For no reason at all. So decided to get a 0% APR U.S. Bank credit card for balance transfers up to 24 months. Now I have a better credit card with no monthly fees and smaller APR. Bye-bye Avant."

Upstart

• Elliott in Brooklyn, NY: "Just a day before I was told I couldn't get a loan because I had too much debt and several so call banks attempted to put in a debt relief program … But not Upstart. The process was fast and easy and you won't have to be on the phone with a representative for hours."
• Aaron in Boston, MA: "I felt Upstart was good at first, but once I paid my loan off early I can tell they were no longer interested in my business. This is a clear practice for predatory lenders looking to focus on tying people up with high interest loans that never end. It's a shame because the website and service are user friendly and they are timely reporting to credit bureau."

Pros and cons of Avant and Upstart

Both Avant and Upstart have strengths and trade-offs. The best fit for you will depend on your credit profile and borrowing needs.

Avant

If you’re in dire need of money but your credit isn’t in good shape, Avant is a good choice. The company approves loans for borrowers with credit scores as low as 580, as long as you have a monthly income of at least $1,200.

Avant often provides next-day funding after approval and does not charge prepayment penalties. Borrowers also get up to five years to repay, which can make monthly payments more affordable.

But there are drawbacks, of course. You’ll likely have a high APR through Avant, along with steep origination fees (up to 9.99%). This lender doesn’t permit co-borrowers, leaving few alternatives if your application is denied. It’s also not available in nine U.S. states.

Upstart

Those with little to no credit history will benefit from Upstart’s unique, AI-based underwriting model. Here, you can submit proof of job history, education and current income in the hopes of being approved, rather than just your credit history and FICO score. Upstart boasts a high loan limit of $75,000, making it a great option for large expenses.

However, like Avant, you’ll likely have a high APR with your loan, and a large origination fee as well. Upstart’s origination fee can be as much as 15% of the loan value and is taken out upon disbursement of funds, so you’ll have to take this into account when you request your loan amount. Also, Upstart only offers two repayment periods: three years or five years.

» COMPARE: Pros and cons of personal loans

Avant vs. Upstart application process

Both Avant and Upstart are online lenders that cater to borrowers with less-than-ideal credit histories and FICO scores. Both companies offer a simple, online application process and strive to disburse funds quickly, often the very next business day, if your loan is approved.

Here’s a breakdown of the application process for each lender:

Avant application process

1. Go to Avant.com.
2. Choose a credit card or loan option.
3. Click “Check loan options.”
4. Fill out the application with income and expense details.
5. Review your approval and loan terms.
6. Submit any required documents.
7. Receive funds, often the next business day.

Upstart application process

1. Visit Upstart.com.
2. Click “Check your rate” for a soft credit inquiry.
3. Enter your desired loan amount.
4. Select the loan purpose.
5. Provide basic details like name, income, education and employment.
6. Review the loan offers presented.
7. Accept the offer that works for you.
8. Upload the requested documents.
9. Undergo a hard credit inquiry for final approval.
10. Receive funds, often the next business day.

» MORE: What documents are needed for a personal loan?

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