Personal Loans For Fair Credit

Susan GuilloryUpdated January 2, 2024

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

If you need an injection of cash, perhaps to help pay for a big move or to consolidate existing debt, you may be thinking about getting a personal loan. But how will that work if your credit is just so-so — or, as it’s more typically called, fair? For those who fall in the middle of the credit spectrum from exceptional to poor, rest assured that there are fair credit personal loans. The lenders who offer personal loans for fair credit scores may consider other factors besides credit score to determine eligibility.Let’s look at what it means to have fair credit, as well as how to apply for personal loans with fair credit.

What You Should Know About Personal Loans With Fair Credit

Your credit score is an important factor in qualifying for a personal loan. Lenders typically prefer borrowers with good or excellent credit because they consider them less risky. If your credit is fair, there are still personal loan options available, but be aware that your choice of loans might be more limited. In addition, personal loans with fair credit are likely to have higher interest rates.

What Does It Mean to Have Fair Credit?

How fair credit is defined depends on which credit scoring model you’re using. There are two primary personal credit scoring models: VantageScore® and FICO®. Each has similar, if not exactly identical, credit score ranges, as shown below:

VantageScore	FICO
Excellent 781–850	Exceptional 800–850
Good 681–750	Very Good 740–799
Fair 601–660	Good 670–739
Poor 500–600	Fair 580–669

As you can see, for VantageScore, a score considered fair falls between 601 and 660, while for FICO, a fair score falls between 580 and 669. Bear in mind that not every lender may abide exactly by these ranges.There are many factors that affect your credit score, including how much debt you have versus your total income, whether you pay your bills on time, the age of your credit accounts, and how many credit accounts you have open. All of these factors and more can go into how your credit score is determined by the scoring models.If your credit score falls in the fair credit range, there are many possible explanations for why that’s the case. It might be because you're new to building credit history — maybe you’re just out of college and have only had one credit card that you’ve rarely used. Or maybe you have several maxed-out credit cards. A couple of late payments can also impact your credit score.In general, the better your credit score, the better the rates you’re likely to qualify for when applying for financing. If your score is below the average credit score, you’ll need to explore personal loans for fair credit. These loans will look at other factors besides credit to determine your eligibility.

Can I Get a Personal Loan With Fair Credit?

There are personal loans for people with every type of credit, including those with a bad credit score. But be aware that the lower your credit score, the fewer options you may have, and the higher the interest rates you may be offered.Why is that? Lenders assess the amount of risk they believe you present to them. In other words, they look at the likelihood you’ll be able to pay back the loan. Those with lower credit scores may be seen as riskier, particularly if they already have several outstanding loans or credit card balances. If you already have $25,000 in debt, for instance, lenders may think there’s a risk that you might default on your loan, so they may be unwilling to loan money to you, or they may charge you more interest.Also keep your eye out for fees when looking for a fair credit personal loan — these can drive up the cost of borrowing. Some common fees to look out for include origination fees, prepayment penalties, late fees, and returned payment fees. Recommended: 5 Typical Personal Loan Requirements

Factors That May Impact Credit Decisions

If you’re looking into personal loans for fair credit, start by knowing your credit score so you can determine what you might qualify for. Some lenders will let you see whether you prequalify for a loan without your credit being impacted. You might want to try prequalifying with several lenders to see what loan terms you might be eligible for.You might also consider applying with a cosigner who has a good credit score. That can not only boost your chances of getting approved, but it may also potentially give you access to lower interest rates.

How to Apply for a Fair-Credit Loan

Once you’ve identified one or more personal loans for fair credit scores that you want to apply for, it’s time for the application process. Often, this takes just minutes.Each personal loan application may be slightly different, but information you’re likely to be asked for includes the following:

Name
Address
Social Security number
Annual income
Housing expenses
How much debt you currently carry
Bank account details (so that the lender can deposit your funds if you are approved for a loan)

Naturally, you’ll also be asked how much you want to borrow and possibly what you plan to use the money for (refinancing debt, moving, home remodel, and so on).Once your application is reviewed, you may receive an instant decision (some lenders use software for this). Or, you may be told that you’ll receive a decision in a few days once a human reviews your application.If you’re approved, you’ll be presented with your loan options, including interest rate and fees, if applicable, and repayment terms. Review those carefully. If you’re happy with them, you can sign the loan agreement (this may be a digital signature), and the funds will be deposited into your bank account in as little as one day. Because this is a closed-end credit vs. open-credit loan, you’ll receive the money as a lump sum.Repayment will usually begin the following month. You may either receive a paper or electronic bill each month, or you might opt to set up automated payments.

How to Choose a Fair-Credit Lender

When you’re looking for a loan, it’s important to shop around and compare a number of different options, regardless of whether your credit score is stellar or so-so. Specifically, you’ll want to analyze the following factors when choosing a fair credit personal loan.

Compare APRs

When you’re shopping around for a loan, you’ll want to take a close look at a loan’s annual percentage rate, or APR. This figure represents the yearly interest you’ll pay to borrow the funds. Because interest rates can be higher for those with lower credit scores, it’s important to shop around to look for a low-interest personal loan for fair credit — or at least as low as you can find.

Compare Payment Amounts & Options

Consider the amount of the monthly payments you’ll need to make to pay back the loan. Sit down and figure out a budget to determine what you can comfortably afford, and stick to your limit. Be sure to make your payments regularly and on time. Failing to do so can negatively impact your credit score and result in late payment fees.In addition, find out whether you’re allowed to make extra payments — some lenders charge a fee for this.

Compare Loan Terms

As you’re shopping around for fair credit personal loans, you’ll want to look at the loan’s term, or how long you’ll have to pay back the money. Make sure the specified time frame works for you. Also keep in mind that while a longer term might seem better, it could lead to paying more in interest over the life of the loan.

Compare Loan Fees

A loan’s fees can increase the cost of borrowing. These costs can include late penalties, origination fees, and prepayment fees. Ideally, look for a fair credit personal loan that has minimal fees involved.

The Best Online Personal Loans for Fair Credit

As you search for online personal loans for fair credit, here are some lenders to consider. (The following information on APR range, loan amounts, and maximum term lengths will be updated weekly, every Monday.)

Lender	Loan amounts	APR range	Maximum term
Avant	$2,000 to $35,000	9.95% to 35.99%	60 months
Best Egg	$2,000 to $50,000	7.99% to 35.99%	60 months
Achieve (formerly FreedomPlus)	$10,000 to $50,000	8.99% to 29.99%	60 months
OneMain Financial	$1,500 to $20,000	18% to 35.99%	60 months
Prosper	$2,000 to $50,000	8.99% to 35.99%	60 months
Universal Credit	$1,000 to $50,000	11.69% to 35.99%	60 months
Upgrade	$1,000 to $50,000	8.49% to 35.99%	60 months

The Takeaway

If you have fair credit, there are a number of personal loan choices available to you. Just realize that the interest rate you’ll get may not be as low as it would be if your credit were good or excellent. To help find the lowest rate possible, look for low interest loans for fair credit, and explore your options.When you’re comparing personal loans interest rates from different lenders, it can help to have them all in the same place. Lantern by SoFi makes it easy to compare personal loans for every type of credit with one simple form that gives you access to multiple lenders.Find and compare personal loan options with Lantern.

Frequently Asked Questions

Can I borrow money with a fair credit score?

Where can you find low interest personal loans for fair credit?

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About the Author

Susan Guillory

Su Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.

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