Detailed Comparison of Avant Personal Loans vs. OneMain Financial Personal Loans

When considering a personal loan, choosing the right lender can significantly impact your financial health. Avant and OneMain Financial are two prominent players in the personal loan industry, each offering distinct features and benefits. This comprehensive comparison will delve into the loan amounts, terms, costs, fees, credit requirements, and application processes associated with Avant and OneMain Financial to help you determine which lender might be more suitable for your needs.

Overview of Lenders

Avant

Avant is known for catering to borrowers with fair to good credit scores. The lender offers unsecured personal loans, which means you don't need to provide collateral to secure the loan. Avant operates in 46 states, providing a broad reach for potential borrowers. Their primary focus is on simplicity and efficiency in the application and approval process.

OneMain Financial

OneMain Financial, on the other hand, is distinguished by its flexibility in loan offerings, including both secured and unsecured loans. They operate in 44 states and require borrowers to complete the process in-store, which can be a crucial factor for those needing immediate access to funds. OneMain Financial is known for its willingness to work with borrowers who have lower credit scores, which can be advantageous for those with less-than-ideal credit histories.

Loan Amounts

Avant

Avant offers a broad range of loan amounts to accommodate various financial needs. The minimum loan amount is $2,000, which provides flexibility for those needing more than a modest sum. On the higher end, Avant allows borrowers to take out up to $35,000, making it a viable option for substantial expenses or debt consolidation.

OneMain Financial

OneMain Financial provides loans starting at $1,500, which is lower than Avant’s minimum. This can be particularly beneficial for those who need a smaller amount for urgent expenses. However, the maximum loan amount at OneMain Financial is capped at $20,000. This limit might be restrictive for individuals requiring larger sums.

It is important to note that both lenders’ loan amounts can vary based on state regulations. For instance, in some states, OneMain Financial’s minimum loan amount can be $2,000, and in others, the maximum might be less than $4,000. Therefore, borrowers should verify the specific terms applicable in their state.

Loan Terms

Avant

Avant offers loan terms ranging from 1 to 5 years. This flexibility allows borrowers to choose a repayment schedule that aligns with their financial situation. Shorter terms can lead to higher monthly payments but less overall interest, while longer terms can reduce monthly payments but increase the total interest paid over time.

OneMain Financial

OneMain Financial provides loan terms between 2 to 5 years. This range is slightly more restrictive compared to Avant, particularly for borrowers needing shorter-term loans. It is essential to match the loan term with your ability to repay, as this can impact your financial stability.

Costs and Fees

Avant

Avant's minimum APR starts at 9.95%, which is relatively competitive compared to industry standards. However, the maximum APR can reach up to 35.99%. Avant charges an origination fee, referred to as an administration fee, which can be up to 9.99%. A notable feature of Avant's administration fee is that if you pay off your loan early, Avant will reimburse a pro-rated amount of this fee, provided it was more than 5%. This is a unique benefit that can make a significant difference for borrowers who anticipate paying off their loan ahead of schedule.

OneMain Financial

OneMain Financial’s minimum APR starts at 18%, which is higher compared to Avant. Like Avant, the maximum APR also caps out at 35.99%. OneMain Financial’s origination fee ranges from 1% to 10% of the loan amount, or it could be a flat rate between $25 and $500, depending on state regulations. This variability means that the total cost of borrowing can differ significantly based on where you live. The higher end of this fee range can add to the overall expense of the loan.

Late Fees and Dishonored Payment Fees

Avant

Avant charges a late fee of $25. This fee is relatively high compared to industry averages but straightforward, making it easier for borrowers to anticipate and manage potential costs if they miss a payment.

OneMain Financial

OneMain Financial’s late fees vary significantly, ranging from $5 to $30 or up to 15% of the late amount, depending on state laws. The maximum late fee of 15% is notably high and could add a substantial cost to your loan if payments are missed.

Additionally, Avant imposes a $115 fee for dishonored payments, which occurs when a check bounces or there are insufficient funds during an ACH draw. OneMain Financial, on the other hand, charges between $10 and $50 for non-sufficient funds (NSF), with the upper limit being quite steep.

Credit Requirements

Avant

Avant typically targets borrowers with credit scores ranging from 640 to 720. This range indicates a focus on individuals with fair to good credit. Avant does not accept co-signers, so your approval will largely depend on your credit profile and financial situation.

OneMain Financial

OneMain Financial is more flexible regarding credit scores, accepting borrowers with scores below 620. Approximately half of their borrowers have credit scores in this range, which makes OneMain Financial a viable option for those with weaker credit profiles. Additionally, OneMain Financial allows co-signers, which can improve your chances of approval if a co-signer has a stronger credit profile.

Application and Funding Process

Avant

Avant offers a fully online application process, which is convenient for those who prefer to manage their finances digitally. Once approved, funds are typically deposited into your account within one business day, allowing for relatively quick access to the money you need.

OneMain Financial

OneMain Financial requires borrowers to complete their application in-store. This means you will need to visit a OneMain Financial branch to verify your identity and sign the necessary documents. While this process can be less convenient, it allows for immediate access to funds, which might be crucial for urgent needs.

Secured vs. Unsecured Loans

Avant

Avant only offers unsecured personal loans. This means you do not need to provide collateral, such as a vehicle or property, to secure the loan. This can be beneficial if you do not want to risk your assets, but it might also mean higher interest rates compared to secured loans.

OneMain Financial

OneMain Financial provides both secured and unsecured loans. Securing a loan with collateral, such as the title of your motor vehicle, can increase your chances of approval and potentially lower your interest rate. However, this also puts your collateral at risk if you fail to repay the loan. For borrowers who have valuable assets and are confident in their ability to repay, a secured loan might be a better option.

Additional Considerations

Insurance and Additional Fees

OneMain Financial often tries to sell additional insurance products, which are not included in the APR. This can make borrowing from OneMain Financial more expensive than initially anticipated. Additionally, the process for paying off a loan early at OneMain Financial may not reduce your overall interest costs, as extra payments might just prepay future payments rather than reduce the principal balance.

Shopping Around

Before committing to a loan from either Avant or OneMain Financial, it is advisable to shop around and compare offers from various lenders. The Yukon Project, for example, provides a platform where you can apply to multiple lenders and compare rates without impacting your credit score.

Conclusion

In summary, both Avant and OneMain Financial offer distinct advantages and drawbacks. Avant stands out with its competitive APR, flexible loan amounts, and unique feature of reimbursing early payoff fees. However, its requirement of a higher credit score and lack of secured loan options might not be suitable for everyone. On the other hand, OneMain Financial’s lower minimum loan amount, acceptance of co-signers, and in-store application process offer flexibility but come with higher APRs and additional fees that can increase the overall cost of borrowing.

Your decision should be based on your specific financial needs, credit profile, and preference for loan terms and application processes. By carefully evaluating these factors and considering alternative lending options, you can find a personal loan that aligns with your financial goals and circumstances.