Avant vs. OneMain Financial: Which offers better personal loans?

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Avant and OneMain Financial cater to borrowers with less-than-perfect credit. They have higher rates than some other lenders on the market, but both can be reasonable options if you are unable to qualify with banks or more competitive online lenders and need a personal loan for bad credit.

Avant vs. OneMain Financial at a glance

Avant and OneMain Financial have similar offers, both fitting options for bad credit personal loans, though Avant may cost slightly less for some borrowers.

Avant personal loans

Best for a potentially lower APR

Bankrate’s view: Avant’s personal loans are slightly more competitive than OneMain Financial. Although it has a high administrative fee, it may still be lower than what you could qualify for with OneMain. Similarly, the annual percentage rate (APR) on its loans starts at a much lower rate than OneMain Financial.

These features make Avant a good option if you have a credit score on the lower end of the fair credit range. You could score a loan with a lower monthly payment and limit your risk.

Pros

• Reasonable starting APR
• Late payment grace period
• Low minimum credit score requirement

Cons

• High starting loan amount
• Steep administrative fees
• No joint applications

OneMain Financial personal loans

Best for smaller loan amounts

Bankrate’s view: OneMain Financial offers personal loans for those with poor or little credit history. It stands out for its fast funding, which can be especially challenging to find if you have bad credit. It also allows you to provide collateral to secure your loan to potentially reduce your APR.

Pros

• Potential same-day funding
• Secured options available
• In-person and online options

Cons

• High starting APR
• Origination fee
• Not available in every state

How to choose between Avant and OneMain Financial

Ultimately, Avant and OneMain Financial are similar enough that it doesn’t hurt to apply with both lenders. Since they allow you to prequalify for a loan, you can see your potential rates without impacting your credit score.

This means you can make an informed decision and choose the lender that offers you the better deal. But even with poor credit, compare personal loan rates from a range of lenders to ensure you get the best deal.

APR range

Both lenders offer the same maximum interest rate of 35.99 percent, which is higher than the current average personal loan interest rate of 12.21 percent — but falls in line with poor credit rates.

Of the two lenders, Avant is the better choice if you meet its credit requirements because of the lower potential APR. OneMain, on the other hand, has a minimum APR almost double that of Avant — 18.00 percent.

If you don’t meet Avants’ minimum, OneMain may be a good option. And unlike payday loans, its APR is capped at 36 percent. While that does mean high monthly payments, it is a less predatory rate than other lenders that work with bad credit.

Minimum credit score

Both of these lenders cater to those with poor credit, but OneMain Financial does not list a minimum credit score. Avant has a minimum credit score requirement of 550, which falls within the very poor category, according to FICO. Many other lenders, bad credit included, have a minimum credit score of at least 600 — Avant stands out for this reason.

Repayment terms

Repayment terms for personal loans tend to range between one and seven years. While you can secure a lower monthly payment with a longer term, it will result in more interest overall. Both lenders have terms available for up to 60 months.

Avant’s minimum repayment term is 12 months, slightly lower than OneMain Financial’s. If you can secure a lower rate with Avant’s requirements, it can be a good option — even with slightly higher monthly payments at a shorter term.

Time to receive funds

The primary benefit of borrowing with OneMain is its same-day funding. If you are able to pick up a check, you can have your funds the same day you apply. Avant, on the other hand, falls more in line with typical funding timelines — usually one to two business days.

Fees

When comparing two fairly similar lender options, considering fees can help you determine which option will save you the most money. Avant charges a steep administrative fee — similar to an origination fee — nearly five percent.

OneMain enforces an even higher origination fee, up 10 percent. Both lenders also have late payment and returned payment fees — with OneMain’s averaging higher than those from Avant.

The bottom line: Which lender is best?

Avant and OneMain Financial are solid options but aren’t the only available choices. And figuring out which is the best for you is going to be dependent on your needs. There are a wide range of bad credit loans available, so keep searching and comparing bad credit personal loan rates until you find a lender that works for you.

As with any loan, calculate the cost — with fees — before you borrow to ensure you are getting a loan that fits your budget.