Best Personal Loans for Fair Credit | Find the Best Loan for You

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Personal loans offer a way to get cash to cover a major expense or to fund a project. You can find other options, but not all of them are great for your bottom line – especially if you have fair credit.

Credit cards may charge higher interest rates than loans, and payday lender fees can make falling into a cycle of debt all too easy.

A personal loan may allow you to borrow money at a reasonable rate and pay it back in fixed monthly installments. The catch: You need to meet credit score requirements to qualify.

If your credit score isn’t great, finding a personal loan might seem impossible. But don’t worry, there are personal loans for fair credit, and here’s what you need to know about getting one.

What Are the Best Personal Loans for Fair Credit?

Lender

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APR

Max. Loan Amount

Min. Credit Score

3.49% to 16.79% $100,000 660

6.99% to 24.99% $35,000 660

5.98% to 35.89% $40,000 600

5.99% to 29.99% $25,000 600

6.18% to 35.99% $50,000 620

7.99% to 29.99% $40,000 620

7.16% to 29.99% $45,000 620

9.95% to 35.99% $35,000 580

5.99% to 29.99% $50,000 640

15.49% to 35.99% $25,000 585

Best for low interest

LightStream is the national online consumer lending division of SunTrust Bank, which last year merged with BB&T to become Truist. LightStream’s online personal loans may allow you to borrow up to $100,000 and use the money for nearly any reason. Borrowers in every state can access these personal loans.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $5,000 to $100,000
  • Repayment terms: 24 to 144 months
  • Better Business Bureau rating: A+

Best Features

  • Offers more than 30 different loan uses

  • Approves loans of up to $100,000

  • Charges no origination, prepayment or late fees

See full profile

Best for low costs

Discover may be known for credit cards but also offers fixed-rate personal loans of up to $35,000 to borrowers in every state. The lender boasts no fees as long as you pay on time.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $2,500 to $35,000
  • Repayment terms: 36 to 84 months
  • Better Business Bureau rating: A+

Best Features

  • Offers customizable loan terms from 36 to 84 months

  • Provides borrowers free access to their FICO credit score

See full profile

Best for small loans

LendingClub has processed more than $44 billion in loans since 2007. Borrowers with fair to excellent credit in 49 states can access LendingClub loans from $1,000 to $40,000.

Before You Apply

  • Minimum FICO credit score: 600
  • Loan amounts: $1,000 to $40,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: not rated

Best Features

  • Provides loans of at least $1,000

  • Accepts joint applications

  • Accommodates borrowers with fair to excellent credit

See full profile

Best for poor credit

Peerform is a peer-to-peer lending platform that connects borrowers nationwide with investors who finance loans. Borrowers with credit scores of 600 or higher may qualify for loans of up to $25,000.

Before You Apply

  • Minimum FICO credit score: 600
  • Loan amounts: $4,000 to $25,000
  • Repayment terms: undisclosed
  • Better Business Bureau rating: A+

Best Features

  • Makes loans to some fair-credit borrowers

  • Allows borrowers to complete the entire loan process online

  • Delivers good customer service

See full profile

Best for customer service

Upstart is a national online lender that uses artificial intelligence to automate more than two-thirds of its lending decisions. Borrowers with fair to excellent credit can connect with investors willing to make loans of up to $50,000. Upstart has originated more than 500,000 loans since its founding in 2012.

Before You Apply

  • Minimum FICO credit score: 620
  • Loan amounts: $1,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Sometimes accepts applicants with fair or no credit history, using artificial intelligence to quantify risk

  • Offers loans for as little as $1,000

  • Provides a financial fitness dashboard that allows borrowers to modify payment dates and view credit score updates

See full profile

Best for fair credit

FreedomPlus is an online lender making personal loans from $7,500 to $40,000. Loans are available to qualified borrowers with a minimum FICO credit score of 620.

Before You Apply

  • Minimum FICO credit score: 620
  • Loan amounts: $7,500 to $40,000
  • Repayment terms: 24 to 60 months
  • Better Business Bureau rating: unrated

Best Features

  • Makes loans to some borrowers with fair credit

  • Provides loans of up to $40,000

  • Offers same-day loan approval and funding in as little as 48 hours

See full profile

Best for online service

Rocket Loans, a national online lender, makes personal loans of up to $45,000 for people with fair to excellent credit in all 50 states. Borrowers can use the loans to consolidate debts, to complete home improvements, to pay medical bills, and to fund business operations or other needs.

Before You Apply

  • Minimum FICO credit score: 620
  • Loan amounts: $2,000 to $45,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Provides same-day funding for loans of up to $25,000

  • Applies no prepayment penalties

  • Offers an online application process

See full profile

Best for bad credit

Since 2012, Avant has made personal loans nationwide to more than 600,000 borrowers. Consumers may qualify with fair to excellent credit and can borrow from $2,000 to $35,000.

Lender Highlights

  • Minimum FICO credit score: 580
  • Loan amounts: $2,000 to $35,000
  • Repayment terms: 24 to 60 months
  • Better Business Bureau rating: A-

Best Features

  • Funds typically available the next business day after approval

See full profile

Best for customer service

Best Egg is a national online lender with personal loans starting at $2,000 for a variety of purposes. Loans can be funded in as little as one business day.

Lender Highlights

  • Minimum FICO credit score: 640
  • Loan amounts: $2,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Funds typically available in one to three business days

See full profile

Best for bad credit

LendingPoint, which specializes in loans for borrowers with fair credit, has offered online personal loans since 2014. The lender, operating in 49 states and the District of Columbia, provides loans as large as $25,000.

Lender Highlights

  • Minimum FICO credit score: 585
  • Loan amounts: $2,000 to $25,000
  • Repayment terms: 24 to 48 months
  • Better Business Bureau rating: A+

Best Features

  • Funds available just one day after approval

  • Some fair-credit borrowers eligible

See full profile

What Is the Best Interest Rate on a Personal Loan?

When you shop around for the best personal loan interest rate, you can save. Compare your personal loan offers with national average trends for personal loans to know if you’ve found a good deal.

The average personal loan rate is 9.82%. Last week’s average rate was 10.16%.*

*Rate as of Oct. 21, 2020

Personal Loan Finder

Select your desired loan amount and loan purpose, your credit score range, and your state to see estimated annual percentage rates and loan terms.

What Is Fair Credit?

A FICO score that falls between 580 and 669 is considered fair and can prevent you from being approved for loans and lines of credit. If you are approved, you won’t get the same deals as someone with a good credit score.

Lenders rely heavily on your credit score to determine whether you’ll be approved for a loan and the terms they’re willing to offer. “Lenders don’t always disclose whether they have a minimum credit score for applicants, but often they prefer to see a good or excellent credit history,” says Lauren Anastasio, certified financial planner for online lender SoFi.

Borrowers with FICO credit scores that fall into good or very good ranges tend to get approved with the best interest rates and terms on their loans. A FICO credit score of 670 to 739 is good and 740 to 799 is very good.

Can You Get a Loan With Fair Credit?

Fair credit can be a barrier to approval with some lenders but not all. Lenders that work with fair credit borrowers will weigh other approval factors, such as your income.

Your credit score is just one metric lenders use to determine your creditworthiness, says Leslie Tayne, debt resolution attorney and founder and managing director of Tayne Law Group. “Lenders also take your credit history, income and debt-to-income ratio into consideration to determine their risk of lending to you,” she says.

Lenders typically want to confirm that you can afford the payments if you’re approved for a loan. You will likely verify your income or employment – possibly from the last three to five years – with pay stubs, federal W-2 forms, bank statements or tax returns, Anastasio says.

You will also have to show ID, such as a driver’s license, Social Security card or passport, and proof of address with a utility bill, lease agreement or voter registration card.

“Self-employed individuals will typically need to provide documentation of wages,” Anastasio says. “Lenders may also consider current expenses, like rent, other debts, etc., to determine if an applicant qualifies.”

In other words, even though your credit score is weighted heavily when applying for a loan, it is not the only thing that matters. If your credit report has some blemishes or your credit score is on the lower end of fair, you might still get approved for a loan. But you likely won’t qualify for the lowest interest rates or the full loan amount you requested.

What Is the Minimum Credit Score for a Personal Loan?

Each lender has its own loan requirements, including minimum credit scores. One lender might set the bar at 620, while another might require a score of 680 for loan approval.

“If your score is below 620, most major lenders will likely not approve you for a loan,” Tayne says.

If that’s the case, you might need to turn to subprime lenders. Keep in mind that such lenders charge borrowers with weak credit higher interest rates and fees than borrowers with good credit to offset risk.

“Having a low score doesn’t mean you won’t get approved for the loan, but it could mean that you’ll pay more for the loan,” Tayne says.

What Is the Best Type of Personal Loan for Fair Credit?

The best personal loan for fair credit depends on whether lower cost or lower risk is more important to borrowers. You can choose from two types of personal loans: secured loans, which require backing with collateral, or unsecured loans, which only need your signature on the contract.

If you’re unable to repay a secured loan, the lender can seize your collateral, such as a car, home or other asset, and sell it to recoup losses.

If you are uncomfortable providing collateral, unsecured loans could suit your needs but at a higher cost. Lenders charge higher rates and fees because loans with no collateral tend to carry higher risk, but these loans may be better for borrowers, as no assets can be lost.

“Evaluate your current financial situation before deciding on a secured or unsecured personal loan,” Tayne says. “Depending on the asset, a secured loan can be a better option since approval odds are higher and interest rates are lower than a similar unsecured loan.”

You might consider a secured loan if you’re confident that you can repay the loan and can accept the risk of losing what you pledge as collateral in return for a lower-cost loan. Generally, the risk isn’t worth it unless you think you won’t be approved for the loan you need without collateral.

How Can You Improve Your Chances of Getting Your Personal Loan Approved?

One way to boost your odds of approval, especially with fair credit, is to improve your credit score before you apply. A fairly easy way to do that is to dispute any errors on your credit reports.

Start by getting a free copy of your credit reports from the three major national credit bureaus: Experian, Equifax and TransUnion. You can get one from each bureau annually at AnnualCreditReport.com or 877-322-8228.

Your credit report summarizes your credit history, including details about unpaid debts and your track record of paying bills.

“Review your report for errors and omissions that impact the score. Errors can occur on credit reports and could be a reason why your score isn’t as high as you anticipated,” Tayne says.

The amount of credit you’re using compared with the total credit you have available, known as credit utilization, also affects your credit score. The higher the amount of debt you carry, the lower your score.

“When your utilization is high, your score drops because it seems that you could be using credit irresponsibly or that your debt-to-income ratio is too high,” Tayne says.

Aim to use no more than 30% of your total credit, but less than 10% is ideal. The best way to achieve that is by paying down debt or by asking for a credit limit increase on your revolving accounts.

“Nudge your credit limits upward, even if you’re not using them. The further you’re away from reaching your credit limit, the healthier your credit score will be,” Anastasio says.

But lenders look at more than your credit score. Having some money socked away in the bank can help your odds of approval if you have fair credit because it shows the lender you could repay a loan.

“Someone with fair credit will have the best chances of being approved for a personal loan if they have a strong cash flow (income relative to expenses) and a reliable income source,” Anastasio says.

Finally, if you are struggling to get approved on your own, you may still have options. “Adding a co-borrower may increase your chances of approval as well as help you get a better rate and terms,” Anastasio says.

A co-borrower or co-signer essentially uses his or her good credit history to vouch for your loan. But before you apply for a personal loan with a co-signer, make sure you know the risks.

Co-signers are legally responsible for your debt. If you cannot repay the loan, your co-signer must do so for you.

Your behavior with the loan will also affect the co-signer’s credit score. If you miss payments, the co-signer’s credit will suffer along with yours, potentially damaging your relationship with that person. Make sure you carefully weigh the pros and cons of using a co-signer.

Advertising Disclosure: Some of the loan offers on this site are from companies
who are advertising clients of U.S. News. Advertising considerations may impact
where offers appear on the site but do not affect any editorial decisions,
such as which loan products we write about and how we evaluate them. This site
does not include all loan companies or all loan offers available in the marketplace.



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