Best Personal Loans for Fair Credit: Compare Options | LendEDU

Personal loans are a useful form of financing because you can use the money for everything from home improvements to paying off credit card debt. Unfortunately, if you have only fair credit, you may not be eligible for every lender.

Luckily there are some lenders that offer personal loans for fair credit. You might not qualify for the best personal loan rates, but these loans will still often have lower rates than credit cards and other financial products.

We provided details on three lenders offering fair credit loans so you can find an option that works for you.

On this page:

Best Personal Loans for Fair Credit

Below, you will find three personal loan lenders offering loans to consumers with fair credit.

Upgrade

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Upgrade is a great option for borrowers with fair credit, as well as those that need smaller loans due to the lender’s small minimum loan amount. With Upgrade, you are able to check rates without damaging your credit score, and eligibility is based more on free cash flow as compared to other lenders.

  • Credit score category: Fair, bad
  • Soft credit pull to check rates: Yes
  • Deposit time: As soon as the next day
  • Origination fee:
  • Late fee:
  • Repayment terms:

Upstart

Upstart logoView Rates

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Upstart offers competitive rates, a large range of loan amounts, and funding in as fast as one business day3. All three of these features make Upstart a great choice for borrowers with fair credit.

  • Credit score category: Fair, bad
  • Soft credit pull to check rates: Yes
  • Deposit time: As fast as one business day3
  • Origination fee:
  • Late fee: (whichever is higher)
  • Repayment terms: 1

Payoff

PayoffView Rates

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Payoff provides consumers with low rates and a variety of repayment terms to choose from, in addition to offering a personal loan specifically designed to pay off credit card debt. To qualify for a Payoff personal loan, you must have fair credit.

  • Credit score category: Good, fair
  • Soft credit pull to check rates: Yes
  • Deposit time: 3 – 6 business days
  • Origination fee:
  • Late fee:
  • Repayment terms:

What Do I Need to Apply for Personal Loans With Fair Credit?

In most cases, it’s possible to apply online for a personal loan. You can submit simple online applications with all of our top lender choices as well as with many other banks, credit unions, and online lenders. Try to look for lenders that allow you to submit your details and get pre-approved with only a soft credit check, as hard credit checks will show up as inquiries on your credit report and stay on your report for two years. Too many inquiries hurt your credit score.

When you apply for a personal loan online, you’ll need to provide some basic information so a lender can assess your qualifications. Some of the information you may be asked to provide include:

  • Your name, address, phone number, email, and other contact details
  • Your Social Security number so the lender can check your credit
  • Details about your income and employment history
  • Information about your other debts
  • What you plan to use your personal loan for

Many lenders provide a fast answer when you’ve submitted your application, so you’ll know within minutes if you are approved for the loan.

How to Qualify for Personal Loans With Fair Credit

Your credit score is typically the primary factor lenders consider when you apply for personal loans. Your credit score provides a shorthand way for lenders to assess whether you’ve been a responsible borrower in the past and whether you’re likely to keep up with payments this time around. However, just because you have fair or average credit, you won’t necessarily be precluded from getting a personal loan. You just need to identify lenders willing to issue loans to people with fair credit—and make sure you meet their minimum qualifications.

For many lenders, you’ll need a minimum credit score of 630 or higher. While many lenders also have minimum income requirements, those minimums vary by lender. If you do not meet these minimum qualifying criteria, or if you meet the minimum requirements but want to qualify with other lenders at better loan rates, there are some things you can do.

Improve Your Credit Score

Improving your credit score is one of the best ways to get better loan offers and to qualify for personal loans with more lenders. Fortunately, there are many ways you can boost your score—and some tactics take as little as 30 days.

To improve your credit score, follow these steps:

  • Check your credit report for mistakes and dispute any incorrect information that could be bringing your score down.
  • Work on paying down debt as quickly as possible.
  • Ask for a credit line increase from current credit card issuers to improve your credit utilization ratio—but don’t use your new credit.
  • Make sure to submit all ongoing monthly payments on time.
  • Consider writing a professional letter to creditors asking if they’re willing to remove a record of a past late payment from your report.
  • See if someone with good credit may be willing to add you as an authorized cosigner to one of their accounts so it shows up on your credit report and you benefit from its positive payment history.

Bring a Cosigner

If you have a family member or friend with good credit, you could ask them to cosign on a personal loan for you. A cosigner is jointly responsible for loan repayment, so lenders consider the cosigners credit and income when deciding whether to lend to you. Adding a cosigner with good credentials can significantly improve your chances of getting approved and receiving a favorable rate because the lender won’t have to rely solely on you to pay back the debt.

Just be aware your borrowing behavior reflects on the cosigner. Don’t ask someone to cosign for you if you aren’t 100% sure you can afford to repay the loan without any late payments.

>> Read More: Personal loans with a cosigner

Join a Credit Union

Credit unions are often more lenient than other financial institutions in granting loans to people with imperfect credit. They also often offer lower interest rates. Credit unions can afford to be less expensive and have more relaxed qualifying standards because they are member-owned non-profits, while banks are for-profit enterprises owned by private individuals or traded publicly and owned by shareholders.

Membership requirements vary by credit union, but if you have fair credit and want to maximize your chances of getting approved for a loan, it may be worth looking for a credit union you can join. Once you’ve become a member, you can apply for a credit union personal loan.

Shop Around

Shopping around for a loan can also help you to find the best rates. You should go through the pre-qualification process to get several quotes from different lenders, then choose the lender that offers you the lowest rate for the loan term you need.

Here are a couple of other fair credit personal loan lenders you may want to consider other than those listed above:

1 The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.

2 Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.

3 If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.