Best Personal Loans for Fair Credit

A personal loan can provide some much-needed access to cash. Whether you want to renovate your home, pay off medical bills or even splurge on a wedding, a personal loan can be used for just about anything. 

You might have a harder time securing a loan if you have fair or average credit. You also may not qualify for the kinds of loans and best terms typically reserved for people with top-notch scores. 

But you should still have access to a healthy range of lending opportunities. Follow this guide to find the best personal loans for fair credit. 

The Best Personal Loans for Fair Credit

• Best for Home Improvement Loans: Upgrade
• Best for Physicians: Doc2Doc Lending
• Best for Consolidating Debt: Upstart
• Best for Comparing Lenders: LendingClub
• Best for Little to No Credit Score: NetCredit
• Best for Comparing Lenders: Credible

A fair credit score is typically in the range of 580 to 669 for FICO® and 601 to 660 for VantageScore®. Your FICO® Score is generated by the Fair Isaac Corporation and is one of the primary factors lenders will look at to determine your eligibility for a loan. Your VantageScore® was developed by national credit reporting companies (CRCs) — Experian, TransUnion and Equifax. It’s another commonly used scoring metric alongside FICO®. Both credit scores categorize creditworthiness based on a scale of very poor, fair, good, very good and excellent. 

Take a look at our picks for the best personal loans for fair credit. 

Best for Home Improvement Loans: Upgrade

Upgrade is a great place for anyone with fair credit to get a fast quote and potential approval as it markets your loan to its many partners. You can choose from a wide range of terms and values, but you will notice that the loans you’re offered could be quite diverse depending on how much the lender wants to charge.

Even though Upgrade doesn’t lend to you directly, it ensures that you have the best experience and find the funding you’ve been looking for. 

Because you have fair credit, you will see the best options for your situation, and you can use the funds you borrow for any purpose. This means that you can work out repayment, refinancing and other issues with your lender in the future, if needed. If you need additional support, however, you can always reach back out to Upgrade for help.

Best for Physicians: Doc2Doc Lending

Doc2Doc Lending provides personal loans to physicians at competitive rates. You can apply online right now to get loans that were made by doctors for doctors. Plus, you can learn more about the platform’s proprietary algorithm and how it helps you.

Plus, several medical professionals can apply:

• Doctors
• Dentists
• Residents
• And many more

And, you can choose from a few loan types, including:

• In-practice loans
• In-training loans
• J-1 visa loans

Best for Consolidating Debt: Upstart

Upstart is a lender that makes customer support easy by offering a whole page on its website on loan information and customer service. Plus, the lender allows you to access cash with no minimum credit score, which is perfect for those with fair credit because there are a lot of platforms that might be out of reach. 

You can choose from a wide range of loan values, and you can also avail yourself of:

• No prepayment fees
• Soft credit checks for eligibility
• Flexible payment options

You can currently borrow up to $50,000, but remember that your borrowing power changes based on your credit score, the recency of any issues that might be lingering on your credit report and other items that are addressed on the application.

Best for Comparing Lenders: LendingClub

LendingClub is a unique lending platform that allows you to check your eligibility without impacting your credit, complete the process entirely online and get funded in around 24 hours. You will see a range of loan offers that will help you choose the best program for the situation, and you can proceed with the loan as needed.

LendingClub also makes it clear that you may want to apply with a cosigner to improve your chances of being approved. With this type of customer support and information, it’s much easier to make the most of your finances with fair credit, especially because it can be more difficult than ever to get obtain loans from traditional banks where their guidelines put you just on the outside of the cash you need.

Best for Little to No Credit Score: NetCredit

NetCredit is a good place for you to turn when you have fair credit because it can work with people who actually have little to no credit. This means that you might have experienced some struggles with your credit in the past, but you can still get a loan when you need it. You can get approved in funded in just a few days, and there are no prepayment fees.

However, you should make sure you know if NetCredit is offered in your state because the platform is not available in CO, CT, IA, ME, MD, NV, NH, NH, NY, NC, PA, VT, VA, WV and DC.

You can check your chances of pre-approval with a soft credit pull, but interest rates could be high depending on your credit score. The firm also offers:

• Low origination fees
• Nominal late fees
• A wide range of loan terms and values

Consider NetCredit when you want to get going in the right direction or need cash for a specific expense.

Best for Comparing Lenders: Credible

Credible is another loan aggregator that brings together all the best deals so that you can choose the best loan for your situation. The platform puts you in touch with:

• A massive range of personalized prequalified rates and terms
• A customer service team that can help you make wise choices
• A large segment of lenders who can help your business

Remember, when you work with a company like Credible, you need to make sure you understand how much the lender you choose can charge in your state. Yes, you can reach back out Credible for help, but you will ultimately pay the lender and deal with their terms. If you ever want to refinance a business loan, you can come back to Credible to find another create option. This is a good place to start when you have fair credit because you can get into a loan that makes sense for you, only to upgrade and refinance when your credit improves.

Types of Personal Loans for Fair Credit 

The terms and interest rates you qualify for when you take out a personal loan will heavily depend on your credit score. With fair or average credit, you won’t receive the kind of favorable terms someone with very good or excellent credit would receive. 

You might have to put up with higher interest rates or fewer choices. In fact, some lenders may deny you a personal loan altogether. If you are denied by a lender, remember not to become discouraged. You’re still able to shop around for a lender that will approve you. In the meantime, take a look at some common types of loans you could be offered, including a debt consolidation loan or home equity loans in some cases, etc.

Secured Loans

A secured loan is a personal loan that is backed by collateral. Collateral is an asset you own that has significant value. Collateral can be your home, car, jewelry, antiques, an investment portfolio or even art. Lenders will verify that you are the owner of the asset and that the asset’s value is high enough to cover the loan amount. 

Secured loans are a great way to obtain cash without a credit check. However, they are not without their downsides. Secured loans can be especially dangerous if you are unable to pay back the money you owe. You risk losing the asset you’ve put up for collateral if you can’t meet the loan’s terms. 

Unsecured Loans

Unlike secured loans, unsecured loans don’t require you to put up any collateral in order to qualify for the loan. Instead, lenders will consider other factors when deciding whether to approve you. Your credit score and income levels are both important in determining your eligibility. 

Many lenders will still approve you for a personal loan even if your credit score is only fair, or average. However, if you have a high-income or low debt-to-income ratio, your chances of being approved on more favorable terms are higher. So, you may want to pay down credit card balances to improve your chances in the future, check into credit score requirements so you know what’s expected of you when you start a new loan application and remember that repayment terms are often better when you’ve had time to work on your credit.

If you don’t have time to work on your credit, unsecured loans are a good way to get the funding you need. Plus, paying these loans on-time means that your credit score can improve and you will likely get better options, as described above, in the future.

Fixed-Rate Loans

Fixed-rate loans come with an interest rate that remains the same for the duration of the loan. Common examples of fixed-rate loans include auto loans, student loans and mortgages. Fixed-rate loans are the opposite of variable-rate or adjustable-rate loans, which have interest rates that can change over time. Your credit information likely won’t force you into a variable rate loan, but you might get better rates with a variable rate (understanding that the rate could change in the future.)

It’s ideal if you can secure a fixed-rate loan at a low-interest rate. This way, even if interest rates go up you’ll keep paying your original rate. Personal loans generally have shorter timeframes than mortgages or student funding. So even if you are stuck with a fixed-rate loan at a higher rate, rest assured that it won’t be for the long-run. Plus, as you improve your credit history, you will likely pay a lower origination fee in the future, save money on interest rates and reduce the overall loan amount.

Personal Loan Requirements and Criteria

It’s a guarantee that most lenders will pull your credit report before approving you for a personal loan. Your fair credit score could hinder your chances of getting approved. Even if you are approved, your options will be limited and you may have to accept a higher interest rate. 

The good news is that lenders won’t base the entire decision on your credit report. There are other important factors they consider to get an accurate estimate of your overall financial health. Check your status in the categories below to gauge your chances for approval:

• Steady income
• Debt-to-income ratio
• Payment history
• U.S. citizen or legal resident
• Minimum age (usually 18 but varies in different states)

Personal Loan Considerations

The good news about having fair credit is that you are on your way to good credit - and maybe even excellent credit in the future. Taking out a personal loan can help you boost your credit score. 

Be sure to make all your payments on-time and always pay above the required minimum amount. This practice will lower your credit utilization ratio (the amount of available credit you are using up). A lower credit utilization ratio shows lenders you are responsible with your credit and reflects positively on your credit score. 

Some other good tips for boosting your credit include paying off your higher-interest debts 1st, refraining from opening up too many accounts at once and keeping unused accounts open. 

Never take out a predatory loan. Predatory loans exploit borrowers with unfair or abusive terms. Some lenders might try to coerce, force or hide important information from you to try to get you to agree to a predatory loan. These loans charge high-interest rates, excessive fees and have the potential to pull you into a cycle of debt. They’re also notorious for harming people’s credit scores. 

Personal Loans vs. Credit Cards

Personal loans have fixed interest rates and fixed timeframes. On the other hand, credit cards charge variable interest rates and offer a continuous credit line. Credit cards are a great option if you are looking for long-term access to credit and you can make continuous payments towards your balance. Personal loans are better if you need a set amount of cash and you’re able to pay it off in full by the required dates. 

Borrow Money Today With Fair Credit

Whenever you decide to borrow money, it’s a good idea to meet with multiple lenders to shop around for the best rates. Always work with licensed lenders and avoid lenders that sound too good to be true. 

Don’t want to engage with lenders who rush you to sign documents, leave blank spaces in documents or offer packaged services. With a bit of work, you’ll find you can still access the lending options you need even with fair credit.

Frequently Asked Questions