Avant vs. Upstart: Which offers better personal loans?
Key takeaways
- Avant is a good choice for lower potential fees.
- Upstart has a low starting APR but only if you are able to qualify.
- Both lenders offer prequalification to check your rates.
Avant and Upstart are online lenders with more flexible credit requirements to help you access the funding you need. This is crucial if you have a low credit score and require a bad credit personal loan.
With both lenders, you can potentially borrow a significant amount and get relatively competitive rates, though the terms depend on your credit and financial health. Consider prequalifying with Avant and Upstart to see which has the better deal for you.
Avant vs. Upstart at a glance
| Avant | Upstart | |
|---|---|---|
| Bankrate Score | 4.5 | 4.7 |
| Better for | Lower potential fees | Lower starting rates |
| Loan amounts | $2,000–$35,000 | $1,000–$50,000 |
| APRs | 9.95%-35.99% | 6.70%-35.99% |
| Loan term lengths | 24–60 months | 36 or 60 months |
| Fees | Administration fee up to 9.99% | Origination fee 0%-12%; ate payment fee: late fee greater of $15 or 5% of outstanding payment |
| Minimum credit score | 550 | No Requirement |
| Time to funding | As soon as the next business day | As soon as the next business day |
Avant personal loans
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Although Avant states on its website that most borrowers have a credit score between 600 and 700, 550 could be enough to get you approved for an unsecured personal loan. You could also save on fees by choosing Avant over Upstart — its maximum administration fee is less than Upstart’s maximum origination fee — but you can find smaller fees elsewhere. However, its higher starting APR may be a problem if you have a lower credit score.
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Pros
- Accessible to borrowers with poor credit
- Lower administrative fee
- Wide range of loan terms
Cons
- Low maximum loan amount
- No cosigners or co-borrowers
- High starting APR
Upstart personal loans
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Upstart is also accessible to borrowers with low credit scores, but it’s best if you have good credit. That’s because Upstart has one of the lowest starting APRs on the market, especially when you consider the average personal loan rate. And while its origination fee can be up to 12 percent, borrowers with good credit may qualify for a significantly lower fee — or no fee at all.
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Pros
- High maximum loan amount
- Low minimum APR
- Potential for no origination fee
Cons
- High maximum origination fee
- No cosigners or co-borrowers
- Limited loan term options
How to choose between Avant and Upstart
Avant and Upstart feature flexible eligibility guidelines for unsecured personal loans. You may qualify for funding with less-than-perfect credit, and the maximum APR is capped at 35.99 percent for both lenders.
APR range
Upstart is the winner when it comes to APR, which includes both your interest rates and origination fee. A 6.70 percent APR is very competitive in the current market, and it’s hard to find other lenders offering such a low rate.
That said, the average APR offered by Upstart is higher than Avant, based on Bankrate data. For most borrowers, this will matter more. It can be difficult to qualify for the lowest rate available, so prequalify with both lenders to see which will offer the better deal.
Minimum credit score
Both Upstart and Avant accept borrowers with fair credit, although Avant slightly edges Upstart out with its minimum requirement of 550. However, Avant states that the majority of its borrowers have a score between 600 and 700, so keep that in mind when you apply.
If you have poor credit, consider improving your credit score before applying. This can help you secure a more competitive APR and lower your monthly payment.
Repayment terms
Avant offers significantly better repayment terms than Upstart. While 24 to 60 months is standard for most lenders, it’s much better than the restrictive terms offered by Upstart.
Despite Avant being the clear winner between these two options, you can find lenders that offer longer terms. For instance, SoFi and LightStream offer terms of up to 84 months. This comes with its own drawback — longer terms mean paying more interest — but it may help keep your monthly payment reasonable.
Time to receive funds
You have the potential to receive your funds as soon as one business day after approval. This is pretty quick — and standard for online lenders. Keep in mind that next-day funding requires you to submit all your information and be approved before the end of the business day. Otherwise, it may take a day or two to fund your loan fully.
Fees
You will pay an origination fee—Avant calls it an administration fee—with both lenders. However, Avant has a slightly lower maximum fee of 9.99 percent versus Upstart’s 12 percent max fee.
Either way, you’ll be paying a significant fee to borrow. Upstart has a slight edge because you have the potential to skip the origination fee entirely. With that in mind, it’s safe to say that it’s a draw between the two lenders, at least with regard to their fees.
Bottom line: Which lender is better?
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 your options to choose the best fit. Because both lenders have similar loans, this is the best way to secure the most competitive option.
Compare more lenders before applying
To make the most out of your borrowing experience, compare personal loan rates with similar lenders. You may find that you qualify for funding with more favorable terms elsewhere.
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