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Personal Loans For Fair Credit in 2021

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Susan Guillory

Susan Guillory

Updated July 13, 2021
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Personal Loans For Fair Credit in 2021; What is a personal loan for fair credit? Learn more about what is considered fair credit and the best options for you to get a loan.
If you need an injection of cash, perhaps to 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 basically just so-so—or, as it’s more typically called, fair? You may fall in the middle of the credit spectrum of exceptional to poor. If that’s the case, rest assured that there are personal loans specifically designed for people like you, who have fair credit. The lenders who make these loans 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 a personal loan with fair credit.

What Does it Mean to Have Fair Credit? 

There are two primary personal credit scoring models: VantageScore and FICO®. Each has similar, if not exactly identical, credit score ranges, as shown below.
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.Your credit score is based on many factors, including how much debt you have versus 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 these 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. Maybe you have several maxed-out credit cards, which can also impact your credit score. Or maybe you’ve made a couple of late payments. All of these situations can impact your credit score.The better your credit score, the better the rates you’re likely to qualify for when applying for financing. If you have fair credit, you’ll need to explore personal loans for fair credit, as these will look at other factors besides credit to determine your eligibility for financing.

Can I Get a Personal Loan with Fair Credit?

Actually, there are business and personal loans for people with every type of credit (including small business loans for bad credit scores). 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: what is the likelihood that you’ll be able to pay back this loan? People 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, lenders may think there’s a risk that you might default on your loan, so they may either be unwilling to loan to you or may charge you more interest to get access to that money. 

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 tell what you might qualify for.Many 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.If your credit is not as good as you’d like and you’re able to wait for your loan, you might consider working on your credit to help your credit score rise before you apply for a personal loan. That may not be an option in all cases, of course.If your credit is fair or lower, you might also consider applying with a co-signer who has better credit than you do. 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 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, as well as possibly what you plan to use the money for (refinancing debt, moving, home remodel, et cetera).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, then 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.Your repayment will usually begin the following month. You may either receive a paper or an electronic bill each month, or you might opt to make automated payments.

How to Choose a Fair-Credit Lender

Whether you’re shopping for personal loans to pay off a car or looking for a refinance personal loan, there are lenders that approve people like you who have fair credit. Here are just a few, based on the top results found for the search “personal loans for fair credit lender,” as of May, 2021.

Upstart

Upstart offers personal loans of $1,000 to $50,000, with three and five-year terms. You must have a FICO score of at least 600 to qualify. Interest rates range from 7.86% to 35.99%.

Lightstream

Owned by Truist (formerly SunTrust and BB&T), Lightstream offers loans between $5,000 and $100,000 that can be used for a variety of purposes, from a wedding to adoption. Interest rates range from 2.49%-19.99% with a discount for setting up autopay.

Discover

Another of the top personal loans for fair credit comes from Discover. Interest rates range from 6.99% to 24.99%, depending on your qualifications, and there are no late fees. Funds can be used for weddings, remodeling, debt consolidation, vacations, and more.

The Takeaway

Even if you have fair credit, there are personal loans available to you. Just realize that the rate you are offered may not be as low as it would be if your credit were excellent. Be sure that you’re willing to pay the extra expense to access the funds you need to pay for life’s expenses.When you’re comparing loans from different lenders, it can help to have them all in the same place. Lantern Credit makes it easy to compare personal loans for every type of credit with one simple form that gives you access to multiple lenders.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit (https://www.consumer.ftc.gov/topics/credit-and-loans)The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.SOLC0421051

Frequently Asked Questions

What does it mean to have fair credit?
Can I get a personal loan with fair credit?
What should I look for in a personal loan for fair credit?

About the Author

Susan Guillory

Susan Guillory

Susan Guillory is the president of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and has been published on sites including Forbes, AllBusiness, and Cision. She enjoys writing about business and personal credit, financial strategies, loans, and credit cards. Follow her on Twitter @eggmarketing.
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