Best Personal Loans for Fair Credit
At a Glance
Personal loans can be used for just about anything, which is why many people turn to a personal loan for their funding needs. With loan amounts ranging from $1,000 to $100,000, you can use loan funds for home improvements, car repairs, medical bills, funding a vacation, paying for a wedding, adoption, emergency or unexpected expenses, and more. Fixed interest rates and other benefits make personal loans an attractive option for many borrowers.
However, having fair credit makes getting a personal loan more difficult. Not all lenders accept fair credit borrowers, and you’ll end up with a higher interest rate. Know how to get a personal loan with fair credit, the best places to get one, and how to improve your score.
Read on to learn more about:
- What does it mean to have fair credit?
- Can you get a personal loan for fair credit?
- How to get a personal loan for fair credit?
- Where can I get a personal loan with fair credit?
- Best personal loans for fair credit
- How to choose the right personal loan?
- Other financing alternatives for fair credit
- Tips to improve fair credit
- FAQs
What does it mean to have fair credit?
If you have fair credit, it likely means you have some credit history but a lower credit score. For example, you may:
- Have missed some payments.
- Be carrying a high balance on credit cards.
- Have high credit usage.
- Have too many credit applications or hard credit inquiries.
- Have a high debt-to-income ratio, meaning you have more debt than your income can support.
Fair credit scores typically range from 580 to 669, and while you’ll still likely qualify for a loan, you may have a more limited selection of lenders. Additionally, the interest rates you qualify for will be higher than those with good or excellent credit and you may have more or higher fees. This is because you’re considered a riskier borrower, so it’s best to take steps to improve your score before you apply for a loan.
Related: Credit score ranges
Can you get a personal loan for fair credit?
While you can get a personal loan with fair credit, it may be more difficult. First, not all lenders offer loans to borrowers with fair credit since they are seen as a greater risk. Additionally, you’ll likely be charged higher interest rates and fees, which means the loan will cost more over the full term.
If you have fair credit, you’ll want to compare lenders who accept applications from borrowers with a lower credit score. Most of the time you’ll find greater success with online lenders. Consider getting prequalified, which doesn’t affect your credit score but would show if you’re eligible for a loan and the interest rate and monthly payment you may qualify for.
How to get a personal loan with fair credit?
The process to get a loan with fair credit is similar to if you had good or excellent credit, though you may find that comparing the right lenders can be more challenging. To get a personal loan with a fair credit, follow these steps:
1. Check your credit score and report. Knowing what your score is can help ensure you find a lender that will offer loans to you. Take steps to improve your score if you can such as making payments on time or paying off revolving debt. You can also check your credit report and dispute any errors to help improve your score.
2. Find lender options. Not all lenders will offer loans to borrowers with fair credit, so you’ll want to find lenders who do. In some cases, lenders may take into consideration other factors like your income, debt-to-income ratio, or history with the financial institution. Look at the lender criteria to understand what each lender requires and list the lenders whose requirements you meet.
3. Get prequalified. This shows how likely you are to be approved for a loan and allows you to view estimated rates and loan amounts. Doing this can help you compare lenders more accurately.
4. Compare lenders and choose the best one. In addition to ensuring you meet their minimum requirements, compare other factors like interest rates, fees, loan minimum and maximums, customer service reviews, and other loan features.
5. Apply. Most lenders have an online application that only takes a few minutes to complete, though other institutions like banks or credit unions may require you to apply in person.
Once you’ve applied, you’ll be notified if you’re approved for the loan or not. If so, you’ll be sent the loan documentation to sign and then the funds will be transferred into your bank account to use how you need.
Where can I get a personal loan for fair credit?
It may be difficult to get a personal loan for fair credit at a traditional bank, but credit unions and online lenders may offer lower rates or more flexible requirements for borrowers. For example, credit unions consider your membership history and other factors when determining whether you qualify. APRs are also capped at 18% at Federal credit unions.
Online lenders also offer more flexibility, and some online lenders even tailor loan options to borrowers with fair or poor credit.
Compare: Best Personal Loans
Best personal loans for fair credit
There are options for those with fair credit, including the lenders listed below:
Find and compare the best loan options.
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