Tag: Avant

Advertiser Disclosure

Pay Down My Debt, Personal Loans

Personal Loans for People with Bad Credit

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Personal Loans for People with Bad Credit

Updated July 20, 2016

When your credit is less than satisfactory, it can be difficult to find a lender willing to give you a personal loan. That doesn’t mean it’s impossible to find one – there are more options available now than ever before to get a personal loan with bad credit. What’s better is you can easily apply online to see the rates for which you qualify – without hurting your credit score.

In recent years, lenders like Springleaf, Avant, and LendingClub have been making loans to people with less than perfect credit. They each have lower credit thresholds and none rely solely on your FICO score when deciding to lend to you, making it easier to qualify.

Even though you might have a poor credit score, your actual credit history may not be that bad. Your credit file could be thin because you didn’t start building any credit until recently, or maybe you’ve only ever had one open line of credit. Whatever the reason, just because your score is low doesn’t mean you’re not creditworthy, and these lenders know that.

Therefore, it’s worth making sure you’re still getting a decent deal on personal loan terms. It can be easy to think that because your score is low, you’ll be approved for a less than ideal interest rate, but you shouldn’t accept the first offer that comes your way.

Start Shopping for a Loan Here – LendingTree

LendingTree

With LendingTree, you can shop for a loan through dozens of lenders with a single online form. LendingTree will perform a soft credit pull – which means your credit score will not be harmed. Lenders will compete for your business and will let you know how much you can borrow. You will also be told the interest rate. Because LendingTree works with so many lenders, this is a good place to start if your credit isn’t perfect. Rather than taking time to apply (one at a time) to multiple lenders, a single online form can save you a lot of time.

LEARN MORE  

Avant Personal Loan

You could borrow anywhere from $1,000 to $35,000 with a personal loan through Avant. Specific rates and terms vary depending on your state of residence, but in general APRs range from 9.95% to 35.99%.

Checking your rates through Avant doesn’t affect your credit score – it’s initially just a soft pull. On its FAQ, it states most customers have a credit score ranging from 600 to 700, though you can still qualify with a lower credit score.

Its customer service team is on staff seven days of the week to assist you in case you have any questions. It’s also possible to receive your funds as soon as the next business day.

There is no prepayment fee. Loans are available in all states except Colorado, Iowa, Massachusetts, New York, Vermont, and West Virginia.

Avant

APPLY NOW Secured

on Avant’s secure website

LendingClub Personal Loan

LendingClub* is different than Springleaf and Avant because it’s a peer-to-peer lender. Individual investors can choose to put their money toward your loan – the money isn’t coming from a bank.

You can borrow anywhere from $1,000 to $40,000 with LendingClub. You can borrow for up to 5 years. Its APR ranges from 5.99% to 35.89%.

For example, if you borrow $20,000 on a 5 year term at an APR of 8.91%, your monthly payment will be around $185.24. That’s including an origination fee of 3% (or $600), so the total amount you receive would be $19,400.

There’s no prepayment penalty, but you need to watch out for the origination fees. These range from 1% to 6%, depending on your loan grade. Remember to factor this in when receiving offers, because being charged an origination fee lessens the amount of money you actually receive.

To be eligible for a loan with LendingClub, you must be 18 years or older and have a verifiable bank account. You must be a U.S. citizen, permanent resident, or have a valid long term visa. Your credit score should be at least 600 to qualify.

LendingClub does not offer loans in Iowa and West Virginia.

When determining creditworthiness, it takes the following into consideration:

  • Debt-to-income ratio
  • Credit score
  • Length of credit history
  • Number of open accounts
  • Usage and payment history
  • Other credit inquiries over the past 6 months

It has an A+ rating with the BBB and has been accredited since 2007

Lending Club

APPLY NOW Secured

on Lending Club’s secure website

*referral link

Springleaf Personal Loan

Springleaf offers personal loans ranging from $1,500 to $10,000. You can apply for a secured or unsecured loan. You can also apply online and have a decision within a day.

Springleaf has been around for over 90 years, has an A+ rating with the BBB. It is a brick-and-mortar bank with over 800 branches across 27 states. Unfortunately, that means it’s limited to those with branches nearby, as you need to physically sign for the loan.

Its website has minimal information on APRs, terms, and fees for loans, but from the calculator provided, we know the APR range is 15.99% to 39.99%, and 2 to 5 year terms are offered.

Springleaf also has a track record for working with borrowers who have low credit. You need a minimum credit score of 550 to qualify.

What would an example loan look like? If you borrow $4,000 on a 3 year term, at an interest rate of 30%, your monthly payment will be around $169.81.

You can check to see if Springleaf has a pre-qualified offer for you, as it doesn’t affect your credit score. If you do accept its offer, then a hard credit inquiry occurs.

*referral link

Which Lender is the Best Choice?

It’s largely going to depend on the rates you receive. Luckily, with Avant and LendingClub, you’re able to apply without a hard inquiry on your credit, which allows you to shop around without worry. It’s smart to start with these two lenders and see which of the two offers you better terms.

Here’s a side-by-side comparison of the rates and terms offered by all 3 lenders:

Criteria Springleaf Avant LendingClub
Amount Borrowed Up to $10,000 Up to $35,000 Up to $40,000
APR Range 15.99% – 39.99% 9.95%-35.99% 5.99% -35.89%
Length of Loan Up to 5 years Up to 5 years Up to 5 years
Min. Credit Score 550 580 600

Your best option is to shop around. You can apply to LendingClub, Prosper and Avant without hurting your score. We recommend you start there first.

If you need the money today and live near a Springleaf branch, that is your best option. But if you can wait a day, Avant is able to get the funds to you in one business day.

Customize your personal loan offers with comparison tool

We’ll receive a referral fee if you click on the “Apply Now” buttons in this post. This does not impact our rankings or recommendations You can learn more about how our site is financed here.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

TAGS: , , , ,

Get A Pre-Approved Personal Loan

$

Won’t impact your credit score

Advertiser Disclosure

Pay Down My Debt

Avant vs LendUp: Which Loan Should You Choose?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Screen Shot 2014-11-25 at 3.35.54 PM

Avant and LendUp are two companies aimed at helping consumers gain access to credit. Each company wants to improve the online lending industry in a way that helps customers. They both offer a simple application process to make it easier for borrowers to get the money they need, and they’re both transparent about the process.

However, they’re structured very differently. Avant* offers access to personal loans in the form of actual installment loans, whereas LendUp offers a slightly better version of a predatory payday loan.

Avant is trying to bridge the gap between consumers needing to resort to payday loans because they lack the credit to qualify for a personal loan. In Avant’s own words, its personal loans are for “when you need a repayment option that extends beyond your next payday.”

Let’s take a look at the similarities and differences between the two, and which one might be right for you.

Avant and LendUp Are Filling a Void

Both Avant and LendUp are offering alternatives to borrowers in each provider’s respective industries – personal loans and payday loans.

LendUp does this by offering its loans to those with damaged or nonexistent credit. It also provides educational incentives for consumers to get better terms on their loans with their “LendUp Ladder” program.

Customers can earn points by watching educational videos on credit, and these points advance them up the ladder to different statuses. Each status offers access to more money at lower rates, and for longer periods of time.

The Avant platform similarly loans to people with lower credit scores. Neither company focuses solely on your credit score – instead, each takes into account your financial situation, your income, your employment history, and your loan repayment history.

If you don’t have the best credit score, which lending option should you choose? With very few exceptions, you should always apply through Avant first as it offers the better deal. If you’re declined through Avant, you can turn to LendUp.

The Biggest Difference is the Terms Offered

Because LendUp is a payday loan alternative, its terms are extremely short – from 7 days to 31 days. Avant offers much longer terms – up to 60 months.

Additionally, since LendUp is focused on shorter loan terms, it also has lower loan amounts – from $250 to $1,000. Avant offers access to loans from $1,000 to $35,000 (with the minimum varying from state to state).

Screen Shot 2015-03-31 at 2.39.11 PMThe biggest difference? The APR. LendUp’s APRs range wildly depending on how long your loan is and how much you borrow – anywhere between 291% to 1147%! Avant offers APRs much less than that, with a range of 9.95% – 35.99%.

A loan through Avant might look like this: a $6,500 loan with an administrative fee of 3.75% and an amount financed of $6,256.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $265.40.

An example loan from LendUp: a $200 loan with a term of 14 days, costing you $30.10 in interest – that’s an APR of 392.38%. (As of March 31, 2015)

If you’re looking for a small amount of cash to tide you over until your next paycheck, it makes sense to choose LendUp. If you’re looking for a much longer term, or for more money, then choose Avant. But carefully consider the fine print and interest rates before going with either lending option.

Don’t Use Either One For the Sole Purpose of Building Credit

As helpful as Avant and LendUp may be, they’re not your only options if you need to build credit, nor are they the best options out there.

From the example shown above, it’s clear that borrowing from LendUp comes with an additional cost due to the interest charged on the loan. Building credit and having to pay that interest isn’t worth it. Likewise, Avant doesn’t have the best interest rates out there for personal loans.

If you need to build your credit, you should look to opening a secured credit card instead. If you can qualify, store credit cards work as well. You want to make on small purchase a month and pay it off on time and in full to start with so you can prove you’re a responsible consumer.

By opening a credit card, you can pay on time and pay in full, and never have to pay interest.

When you take a loan, you’re going to be paying a decent amount in interest, which causes you to pay much more than the original loan amount you took out.

Is building your credit worth that cost? Not if you can get approved for a different solution.

You should only be taking these loans if you truly need the money. Don’t take them for the sake of building your credit unless you’ve exhausted all your other options.

The Fine Print

Make sure to read the fine print when it comes to hidden fees.

Depending on the state, Avant may charge a late fee of $25 when payments are past due for 10 days, and a dishonored payment fee of $15 if your money is returned unpaid. Both offer the option to enroll in automatic payments.

Depending on the state, LendUp charges between $15 and $30 for a returned payment.

Note that both lending options strongly encourage borrowers to call if they’re experiencing difficulty making a payment. Both lending platforms are willing to work with customers. Avant states it can offer a courtesy due date adjustment if needed, and it also has a Payment Planning Team dedicated to working with borrowers.

What about other fees? There are no prepayment fees with Avant. However, Avant does charge an origination fee. LendUp doesn’t charge an application fee either, but if you want to pay your loan before the due date, you’ll face extra charges to cover the cost of the transaction from using your debit card.

The Application Process

LendUp and Avant have simple online applications. You don’t have to worry about going through a mountain of paperwork like you would if you were applying for a traditional loan with a bank.

LendUp’s application process might be a bit quicker overall, because it offers instant and same-day funding options for borrowers (though same-day is only available to those with Wells Fargo bank accounts). Avant simply offers next business day funding if you’ve been approved by 4:30 central time, Monday through Friday.

Avant states that most of its customers have credit scores ranging from 600 to 750, so if you fall somewhere between that range, you have a better chance of being approved.

Of course, your credit score isn’t the sole determining factor for either of these companies. They’re looking to see whether or not you have the ability to pay based on your current financial situation.

As far as credit checks go, only conducts a soft inquiry on your credit report when you check your rates.

LendUp offers a no credit check option for its payday loans. You’re eligible if you have an active bank account and can provide proof of income.

One big thing to note is that LendUp is currently only offered in select states (Ohio, New Mexico, Washington, Maine, Oklahoma, Louisiana, Florida, Texas, Wyoming, Alabama, Idaho, Indiana, Illinois, Mississippi, Oregon, Kansas, California, Missouri, Tennessee, and Minnesota), whereas Avant has a much wider offering. Avant is available in all states except Colorado, Iowa and West Virginia.

Which Lending Option is Better?

Considering they’re both used for different purposes, we can’t say definitively which is better for you. It depends on your financial needs.

promo-personalloan-halfIf you’re struggling to afford your bills or any other immediate needs, you might want to consider getting a loan from LendUp, if you can pay it off on time. LendUp does not allow rollovers at the end of your loan-term, which is a common debt trap with traditional payday lenders.

If you have loftier financial goals, such as wanting to make improvements around your home, needing help financing a car, or wanting extra breathing room in your wedding budget, then personal loans are the way to go. If you have better credit, we encourage you to look at the other personal loan lenders we’ve reviewed, as many of them offer better interest rates than Avant.

Always remember to shop around and see which lenders can offer you better rates. Many personal loan lenders only do soft inquires which won’t impact your credit score. If you shop around within a 30-day window, you’re inquiries will be grouped together, making less of an impact on your score.

How to Make Your Decision

If your main goal is to improve your credit score, try and get approved for a secured credit card instead. You won’t be stuck paying interest, and you’ll still reap the same credit-building rewards. If you’re hard-pressed for cash and don’t need a huge amount, then LendUp is a better solution than a typical payday loan lender. If you need more than a few hundred dollars to fund your goals, but don’t have the best credit, then consider applying for a personal loan through Avant.

Dealing with debt? Download our FREE debt free forever guide!

debt-free-thumbnail

 

*We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

TAGS: , , ,

Get A Pre-Approved Personal Loan

$

Won’t impact your credit score