Personal Loans for Fair Credit
Borrowers with fair credit typically have some options when it comes a personal loan. Choosing the right lender is key to securing the best possible interest rate.
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Thinking about a personal loan? You’re not alone.
At the start of 2020, there was $9.63 billion in outstanding personal loan debt in the United States. These loans are popular because they can be used for so many different things. With a personal loan, you can pay off your credit cards, consolidate debt, pay for your vacation, cover school costs and make a major purchase.
Or sometimes, a global pandemic hits — such as COVID-19 — which many are battling through right now. In response, nearly 80% of credit unions now offer some form of personal loan to help with coronavirus-caused hardship.
Many people use personal loans to pay off high-interest debt. This smart decision can save you money in the long run. Credit score bureaus look at how much of your credit limit is used up, so paying off a credit card can help you improve your credit score as well. Having a personal loan can boost your credit score and save you money.
Your credit score is an important factor. If you only have fair credit, you may not get the best loan possible. Thankfully, there are still loans available for people with fair credit, and you can always take steps to boost your credit score.
Are you ready to find the best personal loans for your needs? The following lenders offer personal loans for fair credit. To get the best loan, take some to compare interest rates, loan terms, fees and other factors before you pick a specific lender.
What’s a Fair Credit Score?
FICO Score Ranges
| Credit Score | Rating | % of People | Impact |
|---|---|---|---|
| 300-579 | Very Poor | 16% | Credit applicants may be required to pay a fee or deposit, and applicants with this rating may not be approved for credit at all. |
| 580-669 | Fair | 17% | Applicants with scores in this range are considered to be subprime borrowers. |
| 670-739 | Good | 21% | Only 8% of applicants in this score range are likely to become seriously delinquent in the future. |
| 740-799 | Very Good | 25% | Applicants with scores here are likely to receive better than average rates from lenders. |
| 800-850 | Exceptional | 21% | Applicants with scores in this range are at the top of the list for the best rates from lenders. |
Your credit score is based on factors like your payment history and the length of your credit history. Basically, lenders use this score to determine how risky your loan will be. If you have a lower level of risk, lenders are more likely to give you better rates and more favorable loan terms.
Top Personal Loans for Fair Credit
This list includes seven best personal loan providers for users with a fair credit score:
This list includes seven best personal loan providers for users with a fair credit score:
- Upstart
Best Overall - Upgrade
Best Online Platform - Prosper
Best for Peer-to-Peer Lending - Payoff
Best Debt Consolidation Services - Best Egg
Best Customer Support - FreedomPlus
Best for a Low APR - LendingPoint
Best for Users with Fair or Bad Credit
The Best Personal Loans for Fair Credit
1. Upstart: Best for All-Around Experience
Upstart is a good personal loan for people who have a short credit history or fair credit. You can get a personal loan with an APR between 6.27% and 35.99%. As long as you have a credit score of 600 or better, you can get approved for a loan.
With Upstart, you can get a loan amount as low as $1,000. On the upper end, you can get a loan approved for a maximum of $50,000. Then, you can select a loan term that lasts between three and five years.
Pros
- Upstart considers your education and employment history.
- You can pay off your loan early without prepayment penalties.
- Upstart uses soft credit pulls, so your score is not affected.
Cons
- The origination fees are up to 8% of the loan amount.
- There are only two term lengths you can choose.
- If you get a three-year loan, the average interest rate is more than 20%.
- The maximum amount you can get is $50,000.
You can get Upstart personal loans for purposes like college tuition, debt consolidation and medical expenses. On average, most users get these loans to consolidate their debt. Because you can get this loan with fair or bad credit in most states, it is an excellent option for borrowers who cannot get a loan from other companies.
Unlike some lenders, Upstart will give you a loan if you have no credit or a short credit history. The lender uses machine learning models to look at your degree field, job history and income. If you have a high earning potential, you could still qualify for a loan.
To qualify, you cannot have a delinquent loan or recent bankruptcy. During the last month, you cannot have more than six inquiries.
In addition, Upstart does not allow borrowers to have any recent inquiries for car loans, mortgages or student loans. However, a bill is currently building steam in the U.S. Congress which would allow new college graduates to delay student loan payments for three years. It is unknown how the approval of this bill would impact Upstart’s eligibility criteria.
There are many benefits to using Upstart. The hardship program allows you to temporarily suspend your payments if you have lost your job or undergone some type of hardship. If you are trying to consolidate your debt, Upstart can send your loan proceeds directly to your creditors.
Borrowers can also enjoy having fast funding. After your loan is approved, you can get funding on the next business day. The only exception is if your loan was for educational purposes. In these instances, your loan will be subjected to a three-day waiting period.
2. Upgrade: Best for Online Solutions
When you use Upgrade, you can get a loan for as little as $1,000. The maximum loan amount you can qualify for is $35,000. Depending on your goals, you can ask for a loan term between 36 and 60 months.
Upgrade offers loans for people who have a 620 credit score or higher. If you have a high credit score, you can get an APR that is as low as 8.49%. Borrowers who have fair credit or a short credit history may have to pay an interest rate of 35.97%.
Pros
- The origination fees are up to 8% of the loan amount.
- There are only two term lengths you can choose.
- If you get a three-year loan, the average interest rate is more than 20%.
- The maximum amount you can get is $50,000.
Cons
- Even if you have excellent credit, you will still be charged an origination fee.
- The maximum APR is higher than the interest rate offered by other lenders.
- You are only able to pick between two different loan terms.
When you get a loan with Upgrade, you can enjoy having a simple application process. Unlike some lenders, Upgrade offers an intuitive mobile app.
This state-of-the-art app allows you to check your credit score, apply for loans and manage your account with the push of a button. Since very few personal lenders offer mobile apps for fair-credit borrowers, Upgrade’s digital platform is a breath of fresh air.
One of the biggest downsides to using Upgrade is the origination fee. Depending on your financial history and credit score, you may be charged 1.85% to 9.99%. Then, the origination fee is subtracted from your loan funds automatically.
When you get a personal loan with Upgrade, you can use it for a variety of purposes. You can use it to pay off high-interest credit cards or consolidate debt. These loans can also be used for home improvement projects or large purchases.
Once you have your loan, you can pay it off early without having to deal with a prepayment penalty. Your funds should arrive in your account within four days after your loan approval occurs. After the money arrives, you can use the mobile app to submit your monthly payments until the loan is paid off.
Personal Loan Upgrade Disclaimer:
Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 8.49%-35.97%.
All personal loans have a 1.85% to 9.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly.
Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.59% APR (which includes a 13.94% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the life of the loan, your payments would total $12,293.46.
The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors.
Late payments or subsequent charges and fees may increase the cost of your fixed rate loan.
There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade’s bank partners. Information on Upgrade’s bank partners can be found at https://www.upgrade.com/bank-partners/.
3. Prosper: Best for Peer-to-Peer Lending
Prosper is a peer-to-peer lending company that started in 2005. While it offers unsecured personal loans, it is different than a bank. Your actual funds come from individual lenders who compete for your loan. Because of this, your loan application is placed for auction and does not get funded until your listing is purchased by a lender.
With a Prosper loan, you can get up to $40,000. One of the best things about this loan is that you can use it for almost any purpose. You can renovate your home, consolidate your debts and make large purchases.
Pros
- Peer-to-peer lending gives you an alternative to traditional loans.
- Prosper has loaned customers more than $16 billion since the company started.
- An estimated 9 out of 10 customers would recommend Prosper to their friends.
- You can get your funds approved in just three business days.
Cons
- Lenders compete for the best loans, which means that people with fair credit may get left out.
- You have to wait for the loan auction to end before you can get your funding.
- Borrowers can only get three-year or five-year terms.
Because Prosper is a peer-to-peer lender, it generally takes a little while longer to get your funds. If no one decides to fund your loan application before it expires, then you have to start the process all over again. When you apply for your loan, you will have to choose a term length of three or five years.
If you decide to pay off your loan early, there is no prepayment penalty. You can also check your Prosper rate without hurting your credit score. After you apply, you can get a loan with a rate between 7.95% and 35.99%.
Prosper is ideal if you do not qualify for a loan with a traditional bank. If you have a good income, the auction environment may even give you a better interest rate than you would normally get. In addition, Prosper gives you a chance to explain to lenders why you are a good investment choice.
Prosper loans are a useful way to pay off your debts or make a major purchase. The main drawback is how long it takes to get your loan funded. Once the funding is ready, you also have to go through a multi-step verification process before the money appears in your bank account. In case you want to make a more informed decision, go through our in-detail Prosper review
4. Payoff: Best for Consolidating Debt
If you are trying to consolidate your debt into an easy monthly payment, Payoff can help. This company is one of the best options available for debt consolidation. With Payoff, you can get a loan approved for $5,000 to $35,000.
Depending on your credit score, you will have to pay an interest rate between 5.99% and 24.99%. If you are getting a loan for $15,000 or more, the minimum interest rate is 6.99%. These personal loans are also available with loan terms between two to five years. Our Payoff review comes with more info on Payoff’s fees and features.
Pros
- There are no prepayment penalties or late fees.
- You never have to pay an annual fee or application fee.
- You can see your FICO scores each month.
- Payoff checks your rate using a soft credit pull.
Cons
- You can only use your loan for consolidating debt.
- It can take a while before you actually receive your funds.
- Payoff’s maximum loan amount is fairly low.
Other than your credit score, Payoff also has a few other requirements. Your credit report cannot include any current late payments. In addition, you cannot have any delinquencies on your report that are 90 days late or longer during the previous year.
Payoff also wants borrowers who have a debt-to-income ratio of 50% or less. You should also have a credit history that is at least three years old. Finally, residents of Mississippi, Nevada, West Virginia and Nebraska cannot apply for loans through Payoff.
Payoff is different than traditional lenders because it advertises itself as a financial wellness company. Basically, it partners with other lending companies. Then, the other companies finance the actual loans.
With Payoff, you will have to pay an origination fee of 0% to 5%. After you are approved for a loan, you can get your funds fairly quickly. In general, you can expect to have your funds in your bank account within two to five days after you finish the verification process.
Once you develop credit card debt and other revolving debt, it can harm your credit score. A debt consolidation loan can help you pay off high-interest debts and credit cards. On average, Payoff borrowers enjoyed a 40-point boost to their credit score after they received a Payoff loan.
5. Best Egg: Best for Customer Convenience
While Best Egg has drawbacks like a fairly high origination fee, the company makes up for these disadvantages through its excellent customer service. Compared to other lenders, Best Egg has had very few complaints. Previous clients have posted excellent reviews of the lender on the Better Business Bureau website.
With Best Egg, you can get a loan term between 36 and 60 months. Your loan can be for as low as $2,000 or as high as $35,000. Depending on various factors, you can get an interest rate between 5.99% and 29.99%.
Pros
- You never have to pay a prepayment penalty.
- Borrowers can receive their loan funds in just a single business day.
- Best Egg offers personal loans for a wide variety of purposes.
Cons
- The maximum amount you can borrow is $35,000.
- Only high-income borrowers with good credit can qualify for the lowest interest rates.
- Best Egg’s origination fees can add up to 5.99%.
While Best Egg offers loans to people who have fair credit, you can get a lower interest rate if you have a better credit score. The lowest interest rate is available to borrowers who have a 700 credit score and earn $100,000 or more per year. Best Egg will generally require you to have several years of credit history before you can get a personal loan.
If you want to access funds quickly, Best Egg is a good option. From the moment your loan is approved, you can access your funds within just a single business day. To speed up the process, make sure to have all of your forms, identification documents and information ready to turn in.
Before you sign your loan documents, you should see what your origination fee is. At Best Egg, this fee can make up 0.99% to 5.99% of your loan amount. This fee is deducted from your funds, so you should keep this in mind when you are determining the loan amount you want to receive.
Other than the origination fee, Best Egg also charges late fees. You can make your loan payment up to three days late. After this grace period passes, you will have to pay a $15 late fee as well as your normal payment.
6. FreedomPlus: Best for a Low APR
FreedomPlus is a popular loan option if you have fairly good credit and want a fixed-rate loan. While the company gives loans to individuals who have fair credit, you still have to have a credit score of at least 640. Because of this, FreedomPlus is not ideal if your credit score is within the lower range of fair credit.
If you do qualify for a loan, you can choose a two-year to five-year repayment term. Rates are determined by your credit score. In addition, you will get a lower interest rate if you choose a 24-month term and a loan for less than $12,000.
Pros
- You can get an APR that is as low as 5.99%.
- FreedomPlus allows borrowers to get up to $40,000.
- You can get a joint or co-signed loan.
- FreedomPlus offers direct payments if you are trying to consolidate your debt.
Cons
- FreedomPlus often charges people an origination fee of 0% to 5%.
- The minimum loan you can receive is $7,500.
- FreedomPlus charges a late fee of 5% or $15.
One of the biggest drawbacks to using FreedomPlus is the late fee. If you make your payment late, you have to pay $15 or 5%. The lender decides which amount to charge you based on which figure is higher. If you have a large monthly payment, this late fee can quickly add up.
When you use FreedomPlus, you can enjoy having several different discounts. The lender offers a discount for joint loans. An estimated 30% of borrowers at FreedomPlus have a joint or co-signed loan. If you choose this option, you can reduce your APR significantly. For example, you can get an APR of 10.99% instead of 15.99% by adding a co-borrower.
Another option for getting a discount is to use direct payments for your creditors. If you let FreedomPlus send 85% of your loan or more to your creditors, you are more likely to qualify for a personal loan and get a lower interest rate. Borrowers can also qualify for an interest rate of 2% to 4%less if they have at least $40,000 in their retirement account.
The average borrower at FreedomPlus has a credit score of 690. The lender wants borrowers who earn at least $40,000 in annual income. In addition, FreedomPlus wants people who have a debt-to-income ratio of 40% or less. The average borrower has an income of $80,800 and a debt-to-income ratio of 20%.
7. LendingPoint: Best for People With Fair or Poor Credit
If you have fair credit or bad credit, LendingPoint can help you get the personal loan you need. This company specializes in giving loans to people who normally have problems getting approved. When you apply for a LendingPoint loan, they use a soft pull to access your credit score. This means you can see your loan rate without having to hurt your credit. `
LendingPoint gives loans for people who have a 585 credit score or higher, so this option is ideal if you are working to rebuild your credit. You can even get a LendingPoint loan if you have filed for bankruptcy. If you have filed for bankruptcy, the bankruptcy must have been discharged at least 12 months ago. Otherwise, you will have to wait and reapply once more time has passed.
Pros
- There is no penalty for prepaying your loan.
- LendingPoint offers loans for people who have low credit scores.
- This company checks your credit score using a soft credit inquiry.
Cons
- The APR starts at a fairly high level of 9.99%.
- You can only ask for a maximum of $25,000.
- Your origination fee can add up to 6% of your loan cost.
You can get a LendingPoint loan for up to $25,000. The minimum amount you can borrow is $2,000. Unlike some loan companies, LendingPoint allows borrowers to ask for a fairly small loan amount. If this is what you are looking for, then LendingPoint might be the right lender for your needs.
With LendingPoint, you can get an APR that is as low as 9.99%. In general, people will pay a higher APR if they have worse credit. At the upper end of the range, you might pay an interest rate of up to 35.99%.
LendingPoint requires people to have an income of at least $35,000 to apply for a personal loan. Once you apply, you will have to pay an origination fee of 0% to 6%. You can choose a loan term that lasts for 24 to 48 months.
Loans are not available in every state, so you need to see if you can get a LendingPoint loan in your area. If you qualify for a loan, you will have to verify your bank account information and your identity. After your loan is approved, you can get funds as soon as the next business day.
Income disclosure: Our minimum annual income is $35,000 alimony, child support or separate maintenance income need not be revealed if you do not wish to have it considered as a basis for repaying the loan.
Offer Terms and Conditions: Applications submitted on this website may be funded by one of several lenders, including: FinWise Bank, a Utah-chartered bank, member FDIC; LendingPoint, a licensed lender in certain states. Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“”APR””) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. Loans are offered from $2,000 to $25,000, at rates ranging from 9.99% to 35.99% APR, with terms from 24 to 60 months. A $10,000 loan with an origination fee of 6% for a period of 24 months with an APR of 24.0980% may have a payment of $529.20 per month (actual terms and rate depend on credit history, income and other factors). The total amount due under the loan terms provided as an example in this disclaimer includes the origination fee financed in addition to loan amount, which is $12,700.80. Customers may have the option to deduct the origination fee from the disbursed loan amount if desired. The total amount due is the total amount of the loan you will have paid after you have made all payments as scheduled.
Alimony, child support, or separate maintenance income need not to be revealed if you do not wish to have it considered as a basis for repaying this obligation.
Personal Loan for Fair Credit FAQs
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Can I Get a Personal Loan With Fair Credit?
You can absolutely get a personal loan with fair credit. The real question is how much you will have to pay for your loan because most personal loans charge an interest rate of 5% to 36%. If you have fair credit, you will end up paying more.
This is because credit scores are supposed to show how trustworthy and reliable you are. If you have a low credit score, you represent a bigger risk for the lender. To compensate for this risk, lenders charge people more if they have fair or poor credit.
There are ways you can reduce your perceived level of risk. If you have a high income, lenders are more likely to give you a personal loan. In addition, some lenders look at your college degree and employment potential to determine how likely you are to pay back the loan.
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What is the Minimum Credit Score Needed for a Personal Loan?
While most lenders prefer borrowers who have good or excellent credit, you can still get a personal loan with bad credit or no credit history. In general, you will need a credit score between 550 to 580 if you want to qualify for a personal loan.
Many lenders have higher score requirements, so you should check with the lender before you apply. To have the highest chances of getting approved, you will need a credit score of 660 or higher.
If your credit score is lower, there are still some options — but they come with a price. Some lenders offer guaranteed approval loans for those with bad credit, but with less than desirable interest rates, to put it kindly.
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What is a Fair Interest Rate on a Personal Loan?
The amount of interest you pay depends on your credit score and financial history. A fair interest rate for someone with excellent credit is different than a fair rate for someone who has a bad credit score. Your debt-to-income ratio and annual income can also play a role in creating your interest rate.
When you get a personal loan, you should consider more than just the interest rate. The following factors will determine whether your personal loan offer is a good deal or not.
- Loan term: The loan term is the duration of your loan. When you get a short loan term, you can generally get a lower interest rate.
- Fees: Your lender already charges interest, but they may also charge other fees. Many lenders charge an origination fee, prepayment penalty or late fee on top of your other costs.
- Discounts: Sometimes, lenders offer discounts for certain customers or situations. For example, you may be able to get a discount for setting up automatic payments.
- APR: The APR incorporates your interest rate and fees. This means that it accurately reflects the total cost of your loan.
- Monthly payment: Your monthly payment needs to be affordable for your budget, or you may end up defaulting on your loan.
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What is the Average Personal Loan Rate?
In most cases, personal loans have interest rates between 6% and 36%. Most borrowers do not qualify for the lowest possible rate. In the United States, the average borrower pays an interest rate of 9.41% for a personal loan.
There are a number of lending platforms known to offer personal loans with very low interest rates. However, borrowers will typically need to demonstrate a high income and an excellent credit score in order to qualify.
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How Much Can I Borrow With a Personal Loan?
On occasion, you can find a lending company that offers personal loans for $100,000. In most cases, lenders will only provide a maximum of $50,000.
These limits are only for borrowers who have a high income and excellent credit. In addition, many lenders have loan limits that are around $35,000 or $40,000.
The amount lenders are actually willing to provide depends on the lender and the borrower. If you have a high income or an excellent credit score, you can generally get a larger loan amount. Sometimes, you can get a co-signer or a joint loan if you want a large loan and cannot qualify for it by yourself.
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Can I Get a Personal Loan With a 600 Credit Score?
It is definitely possible to get a loan with a 600 credit score. Some lenders have credit score requirements that start at 660, so you have to check with the individual lender. In addition, the lender may require other qualifications like having a certain income.
If you’re looking to raise your credit score, a key consideration could better debt management. One way in which you can achieve this is through a debt consolidation loan with a top lender.
This will take debt from different sources and compile it into one payment. Besides the added benefit of handling payments easier, this method can actually save the amount you pay in interest as well.
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What Credit Score Do I Need to Get a $20,000 Loan?
There are companies that offer bad credit loans for up to $35,000. For example, PersonalLoans, Avant and LendingPoint will all give borrowers who have bad credit loans worth $25,000 to $35,000. If you have fair credit, it will be easier to find a company that will give you $20,000 or more.
Before you apply, you should see what the maximum loan amount is. You should also look for lenders who use soft credit inquiries.
With a soft credit inquiry, you can see the interest rate and loan amount you can receive without impacting your credit score. By working with several lenders, you can figure out which personal loan is the right one for your situation.
To get approved for a personal loan with fair credit, you should use a pre-qualification tool to see which lenders you can work with. You should also try to increase your credit score.
If you do not need the money right away, you can spend a few months working to raise your credit score. The leading credit repair software can raise your credit score — even for free. By boosting your score, you can save money on your loan’s interest rates and fees.
Are you ready to improve your score and get a $20,000 loan? Try using the following tips:
- Discover companies that use soft credit inquiries.
- Apply with several lenders to compare their rates.
- Find pre-qualification tools to learn which lenders will work with you.
- Spend time increasing your credit score.
You may want to leverage a top credit monitoring service as well. While this won’t necessarily raise your credit score, it will automatically survey your credit report to alert you of potentially damaging activity — including identity theft and cyber attacks.
If you do not have time to improve your credit score, there are still other ways to get a better interest rate. Some lenders allow you to use a co-signer on your loan application.
Since the co-signer is required to pay back the loan if you fail to make payments, the loan is less risky for the lender. With a co-signer, you may be able to get a loan for a larger amount or a lower interest rate.
All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.
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