When applying for a personal loan, your credit score is one of the critical factors that the lender will consider. Those with fair credit scores between 630 and 689 will find it harder to qualify for some than others with good or excellent credit.
But, it is still possible to get the best personal loans for fair credit. These lenders will focus on other factors in your application, like your income, housing situation, outstanding debts, and education.
Our guide has compiled the top lenders providing personal loans to borrowers with fair credit, with information on how to apply.
Best Personal Loans for Fair Credit
A personal loan for fair credit is simply one that is offered to borrowers that have a lower credit score, often rated fair. While you can get a loan when your credit score is fair, you will be faced with limited loan options since many lenders look for those with higher rating, from 690 to 850.
You can expect a higher annual rate, near 20% when you get a personal loan due to your low score. When compiling our best lenders for fair credit loans, we considered the APR, repayment term, monthly payments, fees, and flexibility. Take a look at them below.
|Name||APR Range||Amount Range||Terms||Minimum Credit Score|
|Upstart||7.46% – 35.97%||$1,000 – $50,000||2 to 7 years||600|
|Discover||5.99% – 24.99%||$2,500 – $35,000||3 to 7 years||660|
|Best Egg||7.99% – 35.99%||$2,000 – $50,000||3 to 5 years||600|
|Avant||9.95% – 35.99%||$2,000 – $35,000||2 to 4 years||580|
|LendingClub||7.04% – 35.89%||$1,000 – $40,000||3 to 5 years||600|
|FreedomPlus||7.99% – 29.99%||$12,000 – $50,000||2 to 5 years||600|
|Prosper||6.99% – 35.99%||$2,000 – $50,000||2 to 5 years||N/A|
|PenFed||7.74% – 17.99%||$600 – $50,000||1 to 5 years||660|
Upstart: Best Overall Fair Credit Personal Loan
Upstart is the ideal choice for fair-credit borrowers who want to get a wide range of amount sizes, as it goes from $1,000 to $50,000.
The borrowers can receive their funds in one business day, although an origination fee goes from 0.00% to 8.00%. The APR is 7.46% – 35.97%, and loan terms are from 2 to 7 years.
- Pros: Upstart offers an extensive range of amounts to borrow, flexible APRs, a minimum credit score at 600, and no prepayment penalties.
- Cons: On the downside, it charges an origination fee and is not available in Iowa or West Virginia.
Even with little history, you can still qualify for the Upstart personal loans. The lender considers the education and job history, with favorable requirements.
But, it’s not available in all states in America. If your loan amount is low, you can end up skipping the origination fee since it starts at 0.00%.
Discover: Best for Long Repayment Term
Discover is the top lender for fair credit personal loans, especially if you’re looking for a long repayment term. The terms go from three to seven years, although you will pay a higher interest rate if you choose a longer duration.
Discover will provide funds on the next business day after your application has been accepted, and the APR is 5.99% – 24.99%. The loan amounts are between $2,500 and $35,000.
- Pros: You can enjoy repayment terms as long as 7 years, and can return the loan proceeds within 30 days of receiving, if you change your mind, without paying interest. Funding is provided quickly, and there is a mobile app for ease.
- Cons: The lender does not allow cosigners and the minimum score is quite high, at 660.
Discover favors those on the higher spectrum of fair credit, with a minimum credit score requirement of 660. But, it is the ideal choice for those who want long repayment terms. The APR is also reasonable despite the long terms, although the longer you spend, the higher your interest will be.
Best Egg: Best for Low Rates
Best Egg is the best personal loan lender if you’re looking for the lowest rates. The lenders have extensive amounts that make them great for home improvements and renovations.
If you’re approved, you can get your funds within three business days and pay it back over 3 to 5 years. The estimated APR is 7.99% – 35.99%, while the loan amount ranges from $2,000 to $50,000.
- Pros: Best Egg accepts poor scores and allows you to borrow up to $50,000. It provides secured and unsecured loans with a quick funding time.
- Cons: You’ll have to pay an origination fee, and the loans are not available in all states.
Best Egg offers fantastic rates on its loans, with fair to excellent credit. The minimum score is 600, although there are limited repayment times. Since the rates are reasonable along with the loan amounts, you can take care of renovations with the borrowed amount.
Avant: Best for Quick Funding Time
Avant explicitly targets people with fair or poor credit, making it easy for you to get approved. The funding is provided the business day after you have been approved, as long as it is a weekday.
There are a couple of fees to keep in mind, while the loan terms are from 2 to 4 years. You can borrow from $2,000 to $35,000, with the APR being 9.95% – 35.99%.
- Pros: Borrowers with fair and poor scores can get loans fom this lender. There is no prepayment penalty, the minimum credit score is low, and funding is quick.
- Cons: The lender does not allow cosigners and you might pay a late and origination fee.
Avant is the ideal choice for low-credit borrowers and is also helpful if you need your loan urgently. If your application is approved by 4:30 pm CT on a weekday, you can get it the next day. The loan amounts don’t go very high, and the APR starts at a high level.
LendingClub: Best for Budgeting Assistance
LendingClub is the ideal choice for those who need budgeting assistance on their personal loans. Personal loans go from $1,000 to $40,000, and you can get very low rates when you let the lender pay off your creditors directly.
You’ll have to pay a couple of fees too, whike the APR is 7.04% – 35.89%. Loan amounts go from $1,000 to $40,000, and the terms are from 3 to 5 years.
- Pros: When you consolidate debt, you get lower rates. Also, their credit reports checks won’t affect your score, and they accept poor and fair scores. You can adjust your payment date after getting the loan.
- Cons: There aren’t a lot of repayment options, and you’ll need to pay a late and origination fee when needed.
LendingClub features extensive amounts and a low minimum credit score. The lender is available in every part of the United States.
They provide assistance to their borrowers, making it easier to get a loan. Also, as you apply and they check your report, it does not reflect on your score.
FreedomPlus: Best for Joint Loans
FreedomPlus is the best option for applying for joint personal loans, and you get discounts when you add a co-borrower. There are discounts for retirement savings and letting them pay your debts directly to creditors.
The minimum score is 600, while the estimated APR is 7.99% – 29.99%. Borrowers have access to amounts from $12,000 to $50,000, with terms from 2 to 5 years.
- Pros: You can qualify with a soft-credit check for credit report, and take advantage of the joint and co-sign options. Also, it provides debt consolidation directly to creditors, and a wide range of discounts.
- Cons: There is a high minimum amount and you need to pay an origination fee.
FreedomPlus offers funding as quickly as 48 hours, with competitive interest rates. The maximum APR is 29.99%. If you want to get a loan with someone else, you can do so as a joint loan or with a co-borrower.
Prosper: Best Peer-to-Peer Lending
Prosper is a peer-to-peer lender; you can consider them if you are looking for fair credit personal loans. The funding can take longer than others, but the amounts range is extensive.
Also, applying as a co-borrower improves the rates. The APR ranges from 6.99% – 35.99%, and you can borrow from $2,000 to $50,000 with terms of 2 to 5 years.
- Pros: No minimum income or prepayment penalty is required to get this loan. Also, you are allowed to use the funds for any purpose, or use the co-borrower option to improve your rates.
- Cons: The origination fee is up to 5% and funding can take up to 14 days.
Since Prosper provides peer-to-peer lending, you can enjoy low-interest rates and good conditions. The lender offers unsecured personal loans virtually. This means you’ll have to wait a bit before getting approved for your loan, but low credit borrowers will benefit from this lender.
PenFed: Best for Borrowing Small Amounts
If you want to borrow a small amount of money, with the minimum loan amounts at $600, you can go for PenFed. It offers personal loans with repayment terms between one and five years.
There are no fees whatsoever during the borrowing process. The estimated APR is 7.74% – 17.99%, while the loan amount ranges from $600 to $50,000. The terms are from 1 to 5 years.
- Pros: There are no fees on personal loans from this lender, and you can borrow small amounts as low as $600. Also, funding is provided quickly and can be used for different purposes.
- Cons: The minimum credit score for this loan is a bit high and you must join the union to receive the funds.
PenFed is a union offering loans for fair credit, but the eligibility requirements are unknown. It is available in all 50 states. You’ll have to join the union first before applying for a loan, and it has a high minimum score requirement despite the low minimum loan amount.
What Does It Mean to Have a Fair Credit Score?
Depending on the lender, a fair credit score goes from 630 to 689. The lenders use different types of scoring companies, which means the definition of fair will change.
The next stage is the good credit score; these customers usually have access to more loan options and lower rates than those with worse ratings. A fair credit score might be because of poor payment history, too many applications, and high usage. Working on these aspects can help you improve your score.
Should You Get Fair Credit Personal Loans
Although getting fair credit personal loans is possible, it’s always a good idea to try to improve your score before applying. Your personal loan providers will be limited, with a higher annual percentage rate.
Consider if you can pay the amount back quickly to prevent more debt and a worse credit score. It’s important to make monthly payments on time.
You also must consider what you can afford when getting low credit personal loans. This includes whether you can make monthly payments and fees.
Check your eligibility criteria, as personal loan lenders want to see your verifiable income and low debt-to-income ratio before providing funds. This is usually difficult for entrepreneurs, and you can get a separate self-employed personal loan instead.
How to Apply for Fair Credit Personal Loan
Applying for a personal loan with fair credit differs based on the lender, but there are specific steps you need to follow to get it.
- Check your credit score: You can find this by checking the credit score provider. Knowing your score will help you choose a lender you qualify for. You can also work on improving your score to get better rates and conditions, even if it’s still in the fair range. This is possible by paying outstanding debts.
- Compare lender requirements: Choosing one lender without researching and comparing it with others is inadvisable. Check conditions like the amount, APR range, terms, and the minimum credit score of multiple lenders. It also helps to check if the lender uses FICO credit score or other types while assessing credit score requirements.
- Pre-qualify with different lenders: You should consider going for lenders that provide a soft credit check rather than a hard check. Some lenders will give a prequalification process that helps them assess you without reducing your credit score.
- Apply: Once you’ve looked at all the personal loan lenders and found the fitting one for you, you can apply. This can be entirely online, or you might have to go in person to submit it. You must provide personal information and documents that prove different things, like income.
Loan Alternatives for Fair Credit
- 0 percent APR credit card balance transfer: You can use a credit card with a 0 percent APR introductory offer, but this is only a suitable alternative for paying off a credit card debt. You can transfer your balance to this new card while stopping the interest from increasing.
- Credit union: You have to join a union before they can accept your application, but they are usually friendly to those with fair and bad credit. Register at a union if you haven’t, and find out what they need for you to qualify.
- Home equity loan or line of credit: Fair credit borrowers with a home can use it to take a home equity loan or home equity line of credit. The house will act as collateral, so missing payments can cause you to lose it.
- A personal line of credit: Another option to go for is a personal line of credit which allows you to withdraw funds based on a specific limit. You will only pay interest on the borrowed amount, which comes with a variable interest rate.
- Debt consolidation loans: You can decide to consolidate debt instead. Debt consolidation is suitable if you plan to use the funds to pay off other creditors. Some debt consolidation lenders are open to those with bad credit.
Having fair credit does not mean that you will be disqualified from all loans. You can improve your chances of getting loans by going to the right lenders, which are those who help borrowers with poor and fair credit. Also, work on increasing your credit score so that you can get better terms the next time you borrow.