Avant vs. Upstart Personal Loans: Which Is Better for Your Needs?

Quick summary: Avant is a traditional online lender that specializes in poor- and fair-credit borrowers, while Upstart uses an AI-powered underwriting system that connects borrowers with lenders based on factors like education, employment history and 2,500 other variables. This difference is critical to understanding which lender is the better option for you when it comes to getting a personal loan.

You should consider Avant if: You have less-than-ideal credit and prefer working with a traditional direct lender that offers straightforward eligibility criteria. Avant typically extends approval to people with a minimum credit score of 550 and a minimum monthly net income of $1,200.

You should consider Upstart if: You want to work with a lender that evaluates more than just your credit score when making approval decisions. Upstart is also a reliable option if you have fair or good credit and want to get matched with the best offers.

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

Detailed Comparison: Avant vs. Upstart

Interest Rates and APR

Your annual percentage rate (APR) represents the total cost of borrowing, including both your interest rate and any fees, expressed as a yearly percentage. A lower APR means you'll pay less over the life of your loan. The better your credit score, the lower APR you typically qualify for.

Avant APR range: Avant offers fixed-rate personal loans with APRs ranging from 9.95% to 35.99%. Since the rate is fixed, you won’t have to worry about it changing over the length of your loan.

Upstart APR range: Upstart offers APRs ranging from 6.5% to 35.99% and claims that its AI-powered model secures 33% lower rates than a traditional lender. However, your rate will ultimately depend on the lender that you’re matched with.

Bottom line: Upstart offers a lower starting APR (6.50% vs. 9.95%), but your actual rate depends heavily on your credit profile. If you have good or excellent credit, Upstart can likely connect you with a lender offering better rates. 

Loan Amounts

Avant: Loan amounts range from $2,000 to $35,000, but minimum loan amounts vary by state. 

Upstart: Loan amounts range from $1,000 to $75,000, with minimum amounts varying by state. This wider range provides more flexibility for both small emergency loans and larger projects.

Bottom line: Upstart offers greater flexibility on loan amounts ($75,000 max vs. $35,000). If you need a loan of over $35,000 or less than $2,000, Upstart is the only option between these two lenders.

Repayment Terms

Avant: Repayment terms range from 24 to 60 months (2 to 5 years). Avant also lets you change your payment due date if your pay schedule shifts, which helps you avoid late fees.

Upstart: Upstart offers only two term options: 36 months or 60 months (3 or 5 years). This limited flexibility means you cannot customize your repayment timeline.

How term length affects your loan: A shorter term means higher monthly payments but less interest overall. If budget flexibility matters most, you’ll likely want to choose a longer term. If minimizing total cost matters most, then you’ll probably want to go with a shorter term.

Bottom line: Avant offers more flexibility with 24, 36, 48 and 60-month options. Upstart's two-option structure limits your ability to balance monthly payments against total interest cost.

Fees and Costs

Origination fees: Avant charges an administration fee of up to 9.99% of the loan amount, which is deducted from your loan proceeds before disbursement. If you’re approved for $10,000 with a 9.99% origination fee, then you’ll receive $9,001. However, if you pay off your loan early, Avant may refund a prorated portion of the fee if it was higher than 5%. Upstart’s partner lenders charge origination fees ranging from 0% to 12%, also deducted from proceeds. 

Late fees: Avant charges a $25 late fee if your payment is more than 10 days past due. Upstart's late fees vary by lender.

Dishonored payment fees: Avant charges a $15 fee if your payment bounces due to insufficient funds. Upstart's late fees vary by lender.

Prepayment penalties: Neither Avant nor Upstart charges prepayment penalties. You can pay off your loan early without additional fees.

Eligibility and Approval

Avant: Avant typically extends approval with a minimum credit score of 550 and a minimum monthly net income of $1,200, according to many online reviews. You must also have a valid Social Security number, U.S. bank account and email address. Avant personal loans are not available in Colorado, Hawaii, Iowa, Maine, Massachusetts, New York, Vermont, Washington or West Virginia. If you are in active bankruptcy, you will not be able to qualify with Avant.

Upstart: Upstart has no official minimum credit score requirement and uses an AI-powered platform to evaluate your credit profile based on factors like your education and employment history when making decisions. Final approval comes down to Upstart’s marketplace of lenders.

Bottom line: Upstart offers more flexibility for borrowers with fair or good credit who are interested in getting the best offer possible. Avant is known to extend approval to people with lower credit scores, making it more accessible for borrowers with less-than-perfect credit. 

Application and Funding Experience

Avant: The entire application process is online and takes a few minutes. Avant uses a soft credit check for prequalification, which won't affect your score. Once you proceed with a full application, a hard inquiry appears on your credit report. According to Avant, funds are generally deposited the next business day via ACH if you're approved by 4:30 p.m. CT Monday through Friday. 

Upstart: Upstart's application is also entirely online. The platform uses a soft credit check for prequalification and a hard inquiry when you formally apply. According to Upstart, 99% of personal loans are funded the next business day after the loan agreement is signed. 

Other Noteworthy Factors

Avant has an A rating from the BBB and has been accredited since 2015. Upstart claims that its AI-powered model secures 33% lower rates than a traditional lender.

Avant vs Upstart: Pros & cons 

Best For: Which Lender Is Right for You?

You should consider Avant personal loans if:

• You have limited credit and want to work with just one lender 

• You prefer more flexible repayment term options

• You want the option to change your payment due date

You should consider Upstart personal loans if:

• You want factors other than your credit profile included in the process

• You need to borrow more than $35,000 (up to $75,000)

• You are seeking the best terms possible for your profile

• You live in a state where Avant isn't available

• You want a fast, highly automated application process

Final Recommendation and Next Steps

Both Avant and Upstart serve borrowers who may struggle to qualify with traditional banks, but they take different approaches.

If you have established fair credit (550-680 score) and want flexible repayment options with reliable customer support, Avant is a solid choice. 

If you have limited credit history, recently graduated or want a lender that evaluates more than your credit score, Upstart's AI-driven approach may approve you when others won't.

A good starting point: Consider prequalifying with both lenders, since neither charges fees to check your rate and both use soft credit inquiries that won't hurt your score. Compare your actual offers, then choose the loan with the lowest APR and most favorable terms for your budget.

FAQs

Which lender has lower APRs?

Upstart has a lower starting APR (6.50% vs. 9.95%). However, not all borrowers will qualify for this lower rate.

Can I get approved with bad credit?

Yes, both lenders work with bad-credit borrowers. Upstart has no official minimum credit score and considers factors like education and employment. Avant requires a minimum 550 credit score. 

What's the difference between Avant and Upstart's underwriting approach?

Avant uses traditional underwriting based primarily on credit score, income and debt-to-income ratio. Upstart uses AI to analyze over 2,500 variables, including education, employment history and income stability. 

Sources

• Avant.com - Official Personal Loans Page

• Upstart - Official Personal Loans Page

• Better Business Bureau - Avant Official Page