Lindsay VanSomeren is a personal finance writer based out of Kirkland, Washington. Her work has appeared on Business Insider, Credit Karma, LendingTree, and more.
Lindsay VanSomeren
Lindsay VanSomeren is a personal finance writer based out of Kirkland, Washington. Her work has appeared on Business Insider, Credit Karma, LendingTree, and more.
Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top performer in the mortgage industry and his entrepreneurial success to simplify complex financial topics. Jordan aims to make mortgages and loans understandable.
Reviewed
Jordan Tarver
Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top performer in the mortgage industry and his entrepreneurial success to simplify complex financial topics. Jordan aims to make mortgages and loans understandable.
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Fair credit, as defined by FICO, is a credit score between 580 and 669. While you’ll be able to score a loan with a score below 670, you shouldn’t expect the most favorable terms. High loan limits and low interest rates are typically reserved for those with the highest credit scores.
But don’t get discouraged. Lenders are still willing to extend financing to you, even if you do have a score between 580 and 669.
Read more
Show Summary
- Compare Personal Loan Rates
- Best Personal Loans for Fair Credit of 2024
- Upgrade
- Avant
- LightStream
- Rocket Loans
- Summary: Best Loans for Fair Credit
- Tips for Comparing Personal Loans for Fair Credit
- Methodology
- Guide To Fair-Credit Loans
- What Is a Fair Credit Score?
- How Does a Personal Loan Affect Credit Score?
- How to Improve Your Credit Score Before Applying
- Where To Get a Personal Loan With Fair Credit
- How To Qualify for Fair-Credit Loans
- How to Apply for Personal Loans for Fair Credit
- Alternatives to Personal Loans For Fair Credit
- Recap: Best Personal Loans for Fair Credit
- Frequently Asked Questions (FAQs)
Best Personal Loans for Fair Credit of 2024
- Best Overall Personal Loan for Fair Credit: Upgrade
- Best Personal Loan for a Range of Repayment Options: Avant
- Best Loan for Lower Interest Rates: LightStream
- Best Personal Loans for Credit Histories of at Least Two Years: Rocket Loans
Summary: Best Loans for Fair Credit
Tips for Comparing Personal Loans for Fair Credit
Consider these tips when comparing personal loans for fair credit:
Compare the maximum interest rates.
If possible, prequalify with a provider.
Check for additional fees.
Evaluate the lender’s customer support options.
Methodology
We reviewed 18 popular lenders based on 14 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose lenders that have a minimum credit score requirement of between 580 and 669 and ranked them based on the weighting assigned to each category:
- Eligibility and accessibility: 30%
- Loan cost: 25%
- Loan details: 20%
- Customer experience: 15%
- Application process: 10%
Within each category, we also considered several characteristics, including loan amounts, repayment terms, APR ranges and applicable fees. We also looked at whether each lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like prequalification and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.
Related: Compare Personal Loan Rates
Guide To Fair-Credit Loans
- What Is a Fair Credit Score?
- How Does a Personal Loan Affect Credit Score?
- How to Improve Your Credit Score Before Applying
- Where To Get a Personal Loan With Fair Credit
- How To Qualify for Fair-Credit Loans
- How to Apply for Personal Loans for Fair Credit
- Alternatives to Personal Loans For Fair Credit
- Recap: Best Personal Loans for Fair Credit
What Is a Fair Credit Score?
Based on the FICO credit score range of 300 to 850, a score between 669 and 580 is considered to be a fair credit score. Fair credit borrowers tend to be riskier and may find it more difficult to qualify for personal loans in addition to other credit accounts like credit cards or mortgages. It’s in your best interest to improve your score before applying for a loan to increase your chances of receiving more favorable terms.
Fair credit scores are typically a result of poor payment history, high credit usage and/or too many credit applications or hard credit inquiries. If you want to improve a fair credit score, it’s best to focus on these areas of your credit profile.
How Does a Personal Loan Affect Credit Score?
A personal loan can help you gain access to necessary financing while building your credit if used responsibly. Here’s how the lifecycle of a personal loan may affect your credit score.
- Shopping for a personal loan. Shopping around for a personal loan typically has no impact on your credit score. Most lenders that offer a prequalification process utilize a soft credit check, which doesn’t damage your credit. However, be sure to confirm a lender uses a soft credit check vs. a hard credit check to safeguard your score.
- Applying for a personal loan. When you apply for a loan, your lender will then run a hard credit check, which can temporarily drop your score between one and five points. Hard credit checks typically impact your score for one year but stay on your credit report for two years. Be sure to keep personal loan applications to a minimum to reduce hard inquiries on your report.
- Repaying your personal loan. Your payment history is one of the most important factors that makes up your credit score—it accounts for 35% of your FICO score. If you make all your payments on time, it can boost your credit score. But if you miss payments, your score will likely start to experience pitfalls.
How to Improve Your Credit Score Before Applying
If your score is lower than you wish and you want to increase your chances of receiving better loan terms, take time to improve your score before applying. Use these strategies to build your credit fast:
- Pay all of your bills on time. On-time payment history is one of the most important factors when building credit. Be sure to pay all of your bills on time leading up to applying for a personal loan.
- Become an authorized user. An authorized user is someone who is added to an existing credit card account. When you become an authorized user, the card’s history will appear on your credit report. If the primary account holder has a history of on-time payments, your credit score may experience a boost.
- Pay off existing debt. Your debt levels impact your credit utilization ratio—how much of your total available credit you use, represented by a percentage. The higher your ratio, the harder it is to qualify for a personal loan. Paying off existing debt before applying can help boost your score by decreasing your credit utilization ratio.
- Request a credit limit increase. Paying off existing debt is not the only way to reduce your credit utilization ratio. Because your credit utilization looks at how much of your available credit you use, increasing your credit limit can achieve the same goal. To request a credit limit increase, contact your card provider. This may require a hard credit check that temporarily dings your score.
Where To Get a Personal Loan With Fair Credit
Banks usually have the strictest credit requirements for personal loans. If your credit score isn’t high to begin with, consider these other options for personal loans for fair credit:
- Credit unions
- Online lenders
- Family and friends
- Cash advance apps
How To Qualify for Fair-Credit Loans
It can be more difficult to qualify for a personal loan when you have fair credit, but there are steps you can take to increase your chances of qualifying for a loan.
If you don’t have time to improve your credit, find lenders where you meet the minimum credit requirements. Getting preapproved for loans will show you which rates you qualify for without impacting your credit score.
Secured loans may also be an option to qualify for a loan with fair credit. Secured loans are backed by collateral, such as savings or your home, and can be easier to qualify for. The loan’s collateral serves as a guarantee of repayment since the lender can take possession of it if you default on the loan.
There are ways to quickly improve your credit score, although it can take several months before you see your credit score increase. First, review your credit report for any errors. If you find any, contact the credit bureaus to get the mistake corrected.
You can also pay down credit card debt to improve your credit utilization ratio, which helps determine your credit score. Paying any past-due accounts can also improve your credit score.
How to Apply for Personal Loans for Fair Credit
While the process may vary depending on your specific score and lender, here are the general steps you can follow to get a personal loan with fair credit:
- Check your credit score. Start by checking your credit score through your credit card provider or another credit-providing website before looking for the best lender. This will give you an understanding of which lenders you can or can’t qualify for. 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. Take time before applying to improve your score as much as possible to receive the best terms possible for your situation. Some quick ways to improve your credit include repaying any outstanding debts and reducing your credit usage.
- Evaluate your budget. Prior to looking for the right lender, evaluate your budget and understand how much loan you can afford. Be sure to only borrow what you need because you’ll owe interest on the entire balance. Use a personal loan calculator to estimate your potential monthly payments.
- Prequalify with multiple lenders. Some lenders offer a prequalification process, which lets you see what terms you may receive once approved without a hard credit check.
- Add a co-signer, if necessary. If you need to boost your application to receive better terms, consider adding a co-signer. A co-signer is a secondary person who agrees to pay back the loan if you fail to do so, which reduces the risk you pose to the lender.
- Submit your application. Once you’ve found the best lender for your situation, submit an application online or in person. Prepare to provide your personal information, such as your Social Security number (SSN), address and income information.
Pro Tip
If you decide to apply for a loan with a co-signer, the ideal co-signer is someone with good credit or a FICO Score of 670 or higher. Having a co-signer with strong credit increases your approval odds and chances of qualifying for a loan with a low-interest rate.
Alternatives to Personal Loans For Fair Credit
If you have fair credit and you’re not able to qualify for a personal loan, there are other options. Before going forward with any alternatives, consider the pros and cons of each one so you know what you’re getting into.
- 401(k) loan
- Secured credit card
- Secured personal loan
- Buy-now-pay-later loan
- Home equity loan or home equity line of credit (HELOC)
- Community-based mutual and financial aid (use 211.org to get help finding programs)
Recap: Best Personal Loans for Fair Credit
- Upgrade: Best Overall Personal Loans for Fair Credit
- Avant: Best for Range of Repayment Options
- LightStream: Best for Lower Interest Rates
- Rocket Loans: Best for Credit Histories of Two Years
Frequently Asked Questions (FAQs)
What is the minimum credit score for a personal loan?
Some personal loans, like loans for bad credit, accept credit scores as low as 580. However, a score at this level won’t get you low interest rates or high loan limits. If you’re searching for the absolute best loan terms, you’ll likely need a score above 670. Before applying, check your credit score and look for ways to improve it. This will help you secure a more favorable loan.
Can I get a loan with a credit score of 640?
Yes, most applicants can get a loan with a credit score of 640. In fact, fair credit personal lenders make loans available to applicants with scores as low as 580. However, with a score that low, don’t expect to receive the most favorable terms, including low interest rates and large loan limits.
Can I get a personal loan with a credit score of 600?
While the most favorable terms are reserved for borrowers with scores typically above 670, many lenders allow for lower credit scores, like 600. If you have a credit score of 600, you, fortunately, can get financing; however, you may qualify for a lower limit and interest rates nearing the maximum rate the lender offers.
How can I get a personal loan with fair credit?
Personal loans are available for borrowers who have fair credit—scores between 580 and 669. Some lenders offer a prequalification process, which lets you submit your information prior to applying to learn what terms you can receive. Once you prequalify through different lenders, compare each loan and choose the one that best suits your financing needs.
Can a personal loan improve fair credit?
There are two immediate ways a personal loan can improve fair credit.
When you open a personal loan, you have an opportunity to work on or establish your payment history, which makes up 35% of your credit score. As long as you pay on time and never miss a payment, you should improve your fair credit score. Set up autopay to ensure a perfect payment history.
Further, your credit mix—the different types of accounts shown on your credit reports, such as a personal loan and credit card—makes up 10% of your credit score. If you’re opening your first personal loan, it will add a new type of credit account to your report. This can improve your score.
How much do personal loans for fair credit cost?
Personal loans come for fair credit with various fees, including:
- Annual percentage rates (APRs). Personal loans charge APRs between 3% and 35%. However, the lowest rates are reserved for highly qualified borrowers. Applicants with fair credit should expect to receive higher rates.
- Origination fees. Some personal loan lenders charge an origination fee between 1% and 8% of the total loan amount. If you want to reduce the overall cost of your personal loan, look for lenders that charge no origination fees,
- Late fees. If you fail to make on-time payments, most lenders will hit you with a late fee. This fee is typically a percentage of your minimum payment or a flat fee, depending on the lender.
- Prepayment penalties. Some lenders penalize borrowers for repaying their full loan amount before the end of the term. Fees typically start out around 2% of the outstanding principal balance and fall to zero over the first several years of a loan. If you want the flexibility of repaying your loan at any time throughout the term, choose a lender that charges no prepayment penalty fees.
