What happens when you default on a loan from Avant

Online lender Avant offers personal loans ranging from $2,000 to $35,000 at interest rates from roughly 9.95% to 35.99% APR, though rates and availability vary depending on the state you live in and your creditworthiness. 

While Avant posts positive customer reviews on its website and claims 95% customer satisfaction in a recent survey, it averages only one and a half stars out of five from 98 reviewers on its Better Business Bureau profile. It has 188 complaints with the BBB and an A- rating. Avant also recently settled charges with the Federal Trade Commission that it engaged in “deceptive and unfair loan servicing practices.” 

Related article: Online Lenders Often Collect Debt Differently Than Traditional Banks. Here’s What to Consider

If you have an Avant loan and you’ve fallen behind on payments, keep in mind that online lenders differ in practices from banks and credit cards, but also that Avant differs from its online competitors in a few ways:

1. Earlier charge-offs.

Online lenders like Avant can charge off a delinquent account after 120 days of nonpayment. This means Avant can report your account as a loss after just a few months of missed payments, hurting  your credit. So if you’ve begun to miss payments, it is important to come up with a solution quickly.

2. Doesn’t sell the debt. 

Some online lenders shy away from suing borrowers for fear of tarnishing  their reputation. Instead, they sell charged-off accounts to debt buyers. That’s not the case with Avant, though.

“Avant doesn’t sell right now,” said Michael Bovee, co-founder of debt resolution company Resolve. “I also don’t see them litigating much right now.”

3. May settle but have reneged on deals. 

While Bovee said that Avant’s settlements tend to be fairly good, he reminds clients to get agreements documented. “I advise everyone to be very careful to get agreements in writing before giving them a penny,” Bovee said. “Avant’s collection side talks a good game, but watch your back because I have seen them renege on stuff. If it’s not in writing, it’s not a deal.”

4. Participates in some debt management plans (DMPs).

Unlike other online lenders, Avant will offer interest rate concessions to allow its accounts to be included in a DMP, research by Cambridge Credit Counseling has found. 

“Prosper, Lending Club, SoFi and Avant accept payments [through a DMP],” said Christopher Viale, Cambridge’s president and chief executive officer. “But no concessions from Lending Club, SoFi and Prosper. It appears Avant is willing to work on interest reduction a bit, but it is case by case.”

You may have other options if you are having trouble repaying your Avant loan. If you contact Avant before you fall behind on payments, you may be able to work out a hardship plan that allows you to reduce your monthly payments for a period of time. 

If you can’t afford a debt payment plan or a settlement, it may be time to consider bankruptcy.  Your Avant loan, as well as other unsecured debt, will be discharged if you are approved for Chapter 7. 

You can read more about online lenders and ways to manage delinquent accounts in our article “Online Lenders Collect Differently Than Banks”.

Why Resolve?

If you’ve fallen behind on your Avant loan, it may be the time to consider your debt resolution options. You can access the Resolve financial management platform and receive guidance from our experts for free. Get started here

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