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
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:
|Lender||APR Range||Minimum Credit Score||Loan Amounts|
|LendingClub||8.30% – 36%||600||$1,000 – $40,000|
|LightStream||5.99% – 21.49%||660||$5,000 – $100,000|
|Rocket Loans||8.41% – 29.99%||610||$2,000 – $45,000|
|Best Egg||8.99% – 35.99%||640||$2,000 – $50,000|
|Discover||6.99% – 24.99%||660||$2,500 – $35,000|
|Happy Money||7.99% – 29.99%||640||$5,000 – $40,000|
|Upgrade||7.96% – 35.97%||560||$1,000 – $50,000|
|Upstart||6.5% – 35.99%||None||$1,000 – $50,000|
How to choose the right personal loan?
When comparing personal loans for fair credit, you’ll want to compare:
- Annual percentage rate (APR)
- Monthly payments
- Repayment terms
- Time to fund
- Payment flexibility
Additionally, here are a few tips to consider:
- Get prequalified when possible. This helps give you a more accurate estimate of potential loan limits, interest rates, and repayment options.
- Compare customer service reviews and ratings. It’s important to choose a lender with great customer service in the event you have a question, encounter issues with payments, or face a financial hardship during your repayment period that would require assistance.
- Check out additional loan features such as credit monitoring, a mobile app, flexible payment schedules, or debt consolidation assistance.
Ultimately, the right personal loan for you is the loan amount you need with an interest rate you can afford. The loan ideally has low fees, payment flexibility, and repayment terms that fit in with your budget and financial plan. The lender has great customer service and may offer additional features to help you get or stay out of debt, or that makes managing your loan easier. Be sure to do your research to find the right lender and loan option for you.
Other financing alternatives for fair credit
1. Home equity loans
Home equity is the market value of your home minus any outstanding mortgages, i.e., the amount of your home that’s been paid off. If you have equity in your home, you can apply for a home equity loan. These loans use your house as collateral but have fixed monthly payments and lower interest rates. The amount you can borrow with the loan depends on your home equity and other factors like your credit history and income.
Learn more: How does a home equity loan work?
2. Home equity line of credit
Home equity lines of credit also require you to have some equity in your home. However, these function more like a credit card than a loan. You’re approved for a line of credit of a certain amount, and you can borrow money up to that amount at any time. You only pay back and owe interest on what you borrow. HELOCs typically have better interest rates than alternatives, though rates are variable and subject to the markets. And, if you default, you could lose your house.
Learn more: All about HELOCs
3. Credit union loans
Credit union personal loans are personal loans you can get from a credit union. You must be a member of a credit union to apply, so these loans are technically considered “private loans.” Credit union loans typically have lower rates and fees, can process your loan application faster, and offer smaller loan amounts.
These loan funds can be used for just about anything, and your application can still be considered even if you have fair credit. This is because the credit union will look at factors other than your credit score.
Learn more: Credit union personal loans
4. A 0% APR credit card
Some credit cards have a 0% APR introductory offer, which means you don’t pay any interest on the card’s balance for a certain period. Even if you carry a balance on the card from month to month, you won’t owe interest. However, this introductory period doesn’t last forever, and it’s important to pay off the balance before the period ends. Otherwise, the balance may be subject to high-interest rates.
Related: Credit cards with no annual fee
Tips to improve fair credit
If you have fair credit, you should take some time to improve your credit score prior to applying for a loan. Doing this will give you more lender options, as well as improve your chances of qualifying for a loan and getting better interest rates and terms. A few ways you can improve your credit include:
- Make sure your credit report is error-free. If there are or you have any questions, you can take steps to dispute or correct them.
- Make all payments on time. Late or missed payments can significantly decrease your score, but on-time payments can help build good history. Payment history is actually the biggest factor affecting your credit score.
- Pay down debts as much as possible, especially revolving credit like credit card debt. This can also improve your credit utilization rate. Try to use less than 30% of your credit cards limit.
- Avoid opening new accounts because each time you do, a hard credit inquiry is run which can decrease your score.
- Keep old accounts open to improve the age of your existing accounts, which makes up 15% of your score.
Related: The best ways to build credit and improve your score
Can a personal loan improve fair credit?
Yes, a personal loan can improve fair credit if you make the monthly payments on time every month. Payment history makes up 35% of your score, so it’s an important factor.
How much do personal loans for fair credit cost?
The cost of a loan depends on factors like the interest rate and fees associated with the loan, the loan amount, and loan term. The shorter the term the less you’ll pay in interest while the longer the term, the more you’ll pay over the life of the loan. Plus, those with fair credit likely won’t qualify for a low interest rate, and high rates will make the loan cost more.
What is the average APR for a fair credit personal loan?
Average APR for a fair credit personal loan is about 19.4%, though this can vary by lender.
The easiest loans to get approved for are payday loans, car title loans, pawnshop loans and personal loans with no credit check. These types of loans offer quick funding and have minimal requirements, so they're available to people with bad credit.What type of personal loan is easiest to get approved for? ›
The easiest loans to get approved for are payday loans, car title loans, pawnshop loans and personal loans with no credit check. These types of loans offer quick funding and have minimal requirements, so they're available to people with bad credit.Can you get a personal loan if your credit score is fair? ›
It's possible to get a personal loan with fair credit. However, you likely won't qualify for the same favorable loan terms as you would if you had good or excellent credit. If possible, it's worth improving your credit score before applying.What is the lowest credit score you can have to get a personal loan? ›
To qualify for a personal loan, borrowers generally need a minimum credit score of 610 to 640. However, your chances of getting a loan with a low interest rate are much higher if you have a “good” or “excellent” credit score of 690 and above.What credit score is needed for a $35000 personal loan? ›
In order to qualify for a $35,000 loan, borrowers are generally required to have a credit score of at least 620. A good to excellent credit score not only gives you more options in terms of lenders, but it also improves your chances of approval and gives you access to the most flexible terms and lowest interest rates.What is the easiest loan to get right now? ›
Payday loans are short-term loans designed to be paid back by your next pay period or within two weeks of taking out the loan. Because most payday lenders don't check your credit, these are easy loans to get.What is the easiest company to get loan? ›
The easiest banks to get a personal loan from are USAA and Wells Fargo. USAA does not disclose a minimum credit score requirement, but their website indicates that they consider people with scores below the fair credit range (below 640). So even people with bad credit may be able to qualify.What kind of loan can I get with a 600 credit score? ›
You can borrow anywhere from a few thousand dollars up to about $50,000 with a 600 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.What can I get with a 580 credit score? ›
|Type of Credit||Do You Qualify?|
|Secured Credit Card||YES|
|Unsecured Credit Card||YES|
|Home Loan||YES (FHA Loan)|
You can use a number of services to check your Equifax and TransUnion scores, which use the VantageScore model, or use Experian to check your score based on the FICO® 8 model. Note, the FICO 8 model gets used in about 90% of lending decisions in the U.S.
While many creditors look at your FICO Score, some lenders use VantageScore instead, a credit score model created by the three credit bureaus. LendingTree provides you with the most recent version of your VantageScore 3.0.Can I get a bank loan with a 550 credit score? ›
Though it may be more challenging to find a lender that's willing to work with you, it is indeed possible to obtain a loan with a credit score of 550. Most lenders require a minimum credit score of between 600 and 650, but some lenders specialize in personal loans for those with lower scores.Can I get a credit card with a 520 credit score? ›
It is 180 points away from being a “good” credit score, which many people use as a benchmark, and 120 points from being “fair.” A 520 credit score won't knock any lenders' socks off, but it shouldn't completely prevent you from being approved for a credit card or loan, either.What FICO score do banks use for loans? ›
The most commonly used FICO Score in the mortgage-lending industry is the FICO Score 5. According to FICO, the majority of lenders pull credit histories from all three major credit reporting agencies as they evaluate mortgage applications. Mortgage lenders may also use FICO Score 2 or FICO Score 4 in their decisions.What would be the monthly payment on a $35000 loan? ›
|Payoff period||APR||Monthly payment|
People who have a bad credit score can sometimes get personal loans up to 50k, but it's not common. The lender may require that a bad credit borrower provide collateral for a large personal loan. Alternatively, they may require that you apply with a cosigner that has good credit.What is the hardest type of loan to get? ›
Unsecured loans are harder to obtain and interest rates can be higher, as lenders rely heavily on your credit and other financial information to determine your loan eligibility. The better your credit score, the better the interest rate you're likely to get.How to get a loan with barely credit? ›
- No-credit-check loans. Some lenders may offer loans without checking your credit. ...
- Online payday advances. ...
- Payday alternative loans. ...
- Get a co-signer. ...
- Apply for a secured credit card. ...
- Apply for a credit-builder loan. ...
- Apply for a secured loan.
A personal loan generally it's not hard to get, but some personal loans are much more difficult to get than others. Unsecured personal loans often require a credit score of 660+, and some are only available to people with scores of 700+.Will a bank give you a loan with a 620 credit score? ›
Yes, you can get a personal loan with a 620 credit score. The best personal loans for a 620 credit score are from LendingPoint, FreedomPlus and Avant, as they offer the most competitive APRs and fees.
Yes, you can get a personal loan with a 600 credit score — there are even lenders that specialize in offering fair credit personal loans. But keep in mind that if you have a credit score between 580 and 669, you'll generally be considered a “subprime” borrower — meaning lenders might see you as a more risky investment.Can I get a loan with a 612 credit score? ›
Credit Rating: 612 is considered a bad credit score. Borrowing Options: Most borrowing options are available, but the terms are unlikely to be attractive. For example, you could borrow a small amount with certain unsecured credit cards or a personal loan for damaged credit, but the interest rate is likely to be high.Can I get a 5000 loan with a 580 credit score? ›
Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.How can I raise my credit score by 50 points in 30 days? ›
- Pay down your revolving credit balances. If you have the funds to pay more than your minimum payment each month, you should do so. ...
- Increase your credit limit. ...
- Check your credit report for errors. ...
- Ask to have negative entries that are paid off removed from your credit report.
Here's the short answer: The credit scores and reports you see on Credit Karma come directly from TransUnion and Equifax, two of the three major consumer credit bureaus. The credit scores and reports you see on Credit Karma should accurately reflect your credit information as reported by those bureaus.Does LendingTree do a soft pull? ›
Simply answer a few questions, provide some basic personal and income information, including your social security number, and wait for the results. At this point, LendingTree will perform a soft credit check and send your information to its lending partners. Within minutes you'll get offers from 5 different lenders.Do lenders use FICO or Credit Karma? ›
According to FICO, more than 90% of top lenders use FICO® scores. In addition to its base versions, FICO also offers industry-specific scoring models (and scores) for distinct credit products, such as auto loans, credit cards and mortgages.What does your credit score have to be to get a 10000 dollar loan? ›
You will likely need a credit score of 640 or higher to get approved for a $10,000 personal loan. Most lenders that offer personal loans of $10,000 or more require fair credit or better for approval, along with enough income to afford the monthly payments.What is the minimum credit score for SoFi? ›
What we don't like: Good-to-excellent credit required: SoFi requires a minimum credit score of 680 to be approved for a personal loan.Who do most lenders use for credit score? ›
FICO ® Scores are the most widely used credit scores—90% of top lenders use FICO ® Scores.
- FICO® Score 2, or Experian/Fair Isaac Risk Model v2.
- FICO® Score 5, or Equifax Beacon 5.
- FICO® Score 4, or TransUnion FICO® Risk Score 04.
The 1st Franklin Financial personal loan credit score requirement is at least 500, according to a customer service representative.Will a bank give you a loan with a 500 credit score? ›
You can get a personal loan with a credit score of 500 if you have a steady source of income, but your choices are very limited. The best way to get a personal loan with a 500 credit score is to start by checking to see if you pre-qualify for loans from major lenders.Can I get a Chase credit card with a 550 credit score? ›
Most Chase cards require a score of at least 600, which is about the dividing line between fair and poor credit.Which card is easiest to get approved for? ›
Secured credit cards are the easiest credit cards to get approved for when you have bad credit or no credit because they require a refundable security deposit that protects the issuer. Secured cards have annual fees as low as $0, report monthly to the 3 major credit bureaus, and often give rewards of 1% or more.What is the easiest card to get with bad credit? ›
- Winner. Discover it® Secured Credit Card.
- Best for no deposit. AvantCard Credit Card.
- Best for no credit check. OpenSky® Secured Visa® Credit Card.
- Best store credit card. Amazon Secured Card.
- Best for balance transfers. Discover it® Secured Credit Card.
- Low deposit. ...
- Unsecured. ...
You will likely need a credit score of 600 or above to qualify for a $5,000 personal loan. Most lenders that offer personal loans of $5,000 or more require bad credit or better for approval, along with enough income to afford the monthly payments.Which credit score matters more TransUnion or Equifax? ›
No credit score from any one of the credit bureaus is more valuable or more accurate than another. It's possible that a lender may gravitate toward one score over another, but that doesn't necessarily mean that score is better.What does a FICO score of 8 mean? ›
FICO Score 8 is a base score, which means that it is used to consider the risk of a borrower not making payments on any type of loan. Other types of FICO Score are used for a specific type of borrowing, such as an auto loan. 2.Do lenders use FICO or Experian? ›
When you are applying for a mortgage to buy a home, lenders will typically look at all of your credit history reports from the three major credit bureaus – Experian, Equifax, and TransUnion. In most cases, mortgage lenders will look at your FICO score. There are different FICO scoring models.
But if you take out a $50,000 loan for seven years with an APR of 4%, your monthly payment will be $683. Almost all personal loans offer payoff periods that fall between one and seven years, so those periods serve as the minimum and maximum in our calculations.How much would a $70,000 loan cost per month? ›
The monthly payment on a $70,000 loan ranges from $957 to $7,032, depending on the APR and how long the loan lasts. For example, if you take out a $70,000 loan for one year with an APR of 36%, your monthly payment will be $7,032.What is 6% interest on a $30000 loan? ›
For example, the interest on a $30,000, 36-month loan at 6% is $2,856.What is the lowest credit score you can have and still get a loan? ›
To qualify for a personal loan, borrowers generally need a minimum credit score of 610 to 640. However, your chances of getting a loan with a low interest rate are much higher if you have a “good” or “excellent” credit score of 690 and above.What credit score do I need if I want to borrow 20k? ›
You will likely need a credit score of 660 or higher for a $20,000 personal loan. Most lenders that offer personal loans of $20,000 or more require fair credit or better for approval, along with enough income to afford the monthly payments.What is considered bad credit for a personal loan? ›
If your FICO score is under 580 or your VantageScore is under 600, you likely have bad credit. This means you may not qualify for the lowest rates around, but you may still be able to get a bad credit loan.Who is more likely to approve a personal loan? ›
Improve your credit score
The higher your credit score is, the more likely you'll get approved for a personal loan. To improve or maintain your credit score, keep the following factors in mind. Payment history: Lenders want to see that you have a history of making timely payments.
Personal loans generally aren't hard to get and are available from credit unions, banks, and online lenders. There are various types of personal loans to consider, depending on how much money you need to borrow.What credit score is needed for a 1000 personal loan? ›
You will likely need a credit score of at least 580 to get a $1,000 personal loan. Most lenders that offer personal loans of $1,000 or more require bad credit or better for approval, along with enough income to afford the monthly payments.Can you get a personal loan with a credit score of 500? ›
You can get a personal loan with a credit score of 500 if you have a steady source of income, but your choices are very limited. The best way to get a personal loan with a 500 credit score is to start by checking to see if you pre-qualify for loans from major lenders.
- Find a lender that meets your financial needs. There are personal loan lenders that cater to a variety of circumstances and financial needs. ...
- Increase your credit score. ...
- Don't apply for more than you need. ...
- Apply with a co-applicant.
The most common reasons for rejection include a low credit score or bad credit history, a high debt-to-income ratio, unstable employment history, too low of income for the desired loan amount, or missing important information or paperwork within your application.How long should I wait to apply for a personal loan? ›
Wait for a 30 day cycle before applying for a loan.
Each time you apply for new credit, that credit application shows up as an inquiry on your credit report, which can lower your credit score.
- How you will use the loan. ...
- The amount of financing you're seeking. ...
- Your business and personal credit profile. ...
- Your capacity to repay. ...
- Gather information before you start. ...
- Work with an advisor. ...
- Capacity. ...
What Does a 495 Credit Score Get You?
|Type of Credit||Do You Qualify?|
|Unsecured Credit Card||NO|
You can borrow anywhere from a few thousand dollars up to about $50,000 with a 600 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.Can I get a personal loan with a 582 credit score? ›
Personal loans for fair credit typically require minimum scores between 580 and 660. Improve your score. If you have a fair credit score, you usually won't receive the most favorable terms, like low interest rates.What loans to avoid? ›
- 401(k) Loans. ...
- Payday Loans. ...
- Home Equity Loans for Debt Consolidation. ...
- Title Loans. ...
- Cash Advances. ...
- Personal Loans from Family.
Credit card loans tend to be riskier than other types of loans.Which loan is riskier? ›
Unsecured loans are riskier than secured loans for lenders, so they require higher credit scores for approval.