Best Personal Loans for Fair Credit: Top Lenders and Offers

If you have a fair credit score, you might be wondering what your options are for getting a personal loan . Whether you're looking to consolidate debt, pay for unexpected expenses, or fund a major purchase, we've got you covered.

We'll share with you the best personal loans for fair credit in 2024, as well as tips for comparing personal loans , improving your credit score, and more.

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Best Personal Loans for Fair Credit of 2024

Looking for a personal loan with fair credit can be challenging, but there are options available to you. Here are some of the best personal loans for fair credit in 2024:

• Upstart : Best overall personal loan for fair credit
• Avant: Best personal loan for a range of repayment options
• LightStream: Best loan for lower interest rates
• Rocket Loans: Best personal loans for credit histories of at least two years

Consider these options for your next personal loan , whether you're moving, need funds for medical expenses, home improvements, or credit card refinancing. Check the minimum and maximum loan amounts, personal loan rates, time to fund, and loan closing and disbursement process before making your decision. Upstart personal loans offer fast funding, while LendingPoint offers achieve loans.

Best Overall Personal Loan for Fair Credit

Upstart

Upstart is a personal loan provider that offers loans to a range of borrowers, including those with poor credit histories. Upstart charges an origination fee between 1.85% and 9.99% of the loan, and borrowers will encounter a $10 fee if their payment is more than 15 days late or if the payment does not go through. However, Upstart borrowers are not subject to a prepayment penalty, so you can reduce the overall cost of the loan if you’re able to pay it off early.

Upstart offers loan amounts ranging from $1,000 to $50,000 with two- to seven-year terms. The lender provides direct lender payoff for debt consolidation loans , which can be a great option for those looking to consolidate their debt.

Upstart's Credit Heath tool makes it easy to track your credit score over the life of your loan. Beyond offering accessible personal loans, Upstart streamlines the lending process with a mobile app that lets borrowers view their balance, make payments, and update personal information.

Pros

• Low minimum credit score requirement
• Borrowers can use loans to cover business expenses
• Offers direct lender payoff for debt consolidation loans

Cons

• High APR range
• Charges fees for origination, late payment, and insufficient funds

Upstart's minimum credit score requirement is 580, and there is no minimum income requirement. Co-applicants are allowed.

Upstart is a great option for those looking for a personal loan provider that offers debt consolidation loans. Upstart's Credit Heath tool and mobile app make it easy to manage your loan and track your credit score.

Best Loans for a Range of Repayment Options

If you're looking for a personal loan with a range of repayment options, Avant may be a good choice for you. Avant personal loans come with flexible repayment terms of two to five years, making it an accessible option for borrowers.

Avant

Avant offers both secured and unsecured loans and specializes in middle-income borrowers with fair to good credit . To qualify, you only need a minimum score of 580. While maximum loan amounts are low compared to other lenders, the low minimum amount and flexible repayment terms make it an accessible option for borrowers.

Avant personal loans come with an administrative fee of up to 4.75% of the loan amount. Additionally, the APR range (9.95% to 35.99%) is on the high end for applicants with a good to excellent credit score. However, the platform earns top marks for borrowers with less than stellar credit who need quick access to funds.

Pros & Cons

Here are some pros and cons to consider before applying for an Avant personal loan:

Pros

• Secured and unsecured loan options available
• Low credit score requirement (580)
• Loan terms available up to 60 months

Cons

• Charges an upfront administrative fee
• High starting APR for prime borrowers
• Co-signers and co-applicants not allowed

Eligibility

Avant aims to provide credit services to a range of customers, including those with fair credit. For that reason, Avant has a minimum credit score requirement of 580, with the average borrower score between 600 and 700. Likewise, Avant focuses on low- to middle-income borrowers and has a minimum income requirement of just $20,000, though most borrowers have an average household income of $40,000 to $100,000.

To expand eligibility, Avant also considers more than just your employment income, including alimony and child support, and may include the income of other people within your household. That said, Avant does not allow co-signers or co-applicants.

Loan Uses

As with many other personal loan providers, Avant loans can be used to consolidate debt and pay for things like medical expenses, auto repairs, home improvements, moving, or vacations and travel. Avant borrowers cannot use personal loan funds to cover business expenses, but the platform does allow current borrowers to refinance their existing Avant loans with another loan—possibly with a lower APR.

Turnaround Time

Avant applicants who are approved for an unsecured loan before 4:30 p.m. Central time Monday through Friday may receive their funds the next business day. However, as with other lenders, the funding timeline varies depending on the borrower's bank. It can also take longer for borrowers who take out secured loans.

Best for Lower Interest Rates

LightStream

LightStream offers unsecured personal loans with an APR range of 7.99% to 25.49% when enrolling in autopay. The loans range from $5,000 to $100,000 and provide competitive rates, making it an attractive option for those seeking low-interest financing. Repayment terms are flexible, ranging from two to seven years, allowing you to manage large expenses over an extended period.

Pros & Cons

• No origination, prepayment, or late fees
• Competitive and low rates
• Fast approval and funding process
• No prequalification process
• Due date flexibility is limited
• Some restrictions on the use of loan proceeds

Details

Eligibility: LightStream recommends applicants to have good to excellent credit, several years of credit history, and a stable income to qualify for a personal loan. The platform does not allow co-signers but does offer a joint application option.

Loan Uses: LightStream's personal loans can be utilized for various purposes, including purchasing vehicles, making home improvements, and financing unique items such as land and timeshares. However, the loans cannot be used for post-secondary education costs, business purposes, or illegal activities.

Turnaround Time: Approved borrowers can receive funds as soon as the same day if the loan is approved before 2:30 p.m. Eastern time on a banking business day. To receive same-day funding, applicants must complete the necessary documentation and verification processes before the specified time.

By offering competitive rates, flexible terms, and no additional fees, LightStream stands out as a strong contender for individuals seeking lower interest rates on personal loans.

Best for Credit Histories of at Least Two Years

Rocket Loans

Rocket Loans is a good option for borrowers with fair credit scores who have at least two years of credit history. The lender offers personal loans with quick turnaround times and low interest rates. However, borrowers will face origination fees and repayment terms limited to three or five years.

Rocket Loans charges an origination fee of up to 9% of the loan amount, and APRs range from 9.116% to 29.99% (the minimum rate includes autopay discount). The lender offers loan amounts of $2,000 to $45,000, which can be used for home improvements, large expenses, travel, and vacation.

To qualify for fast funding, approved applicants must complete their applications and sign the promissory note before 1 p.m. ET on a business day. If same day funding is not possible, the average time to receive funds is two to four days.

Rocket Loans offers a prequalification process that only requires a soft credit check, which won't harm your credit score. The lender also offers same-day approval, and same-day funding may be possible. Rocket Loans does not impose a prepayment penalty, and a rate discount is available with autopay.

However, Rocket Loans charges fees for origination, late payment, and insufficient funds. The lender does not offer direct payment for debt consolidation loans, and it doesn't allow co-signers or co-applicants. The loan repayment terms are limited, with options for three or five years.

To be eligible for a Rocket Loans personal loan, you must have a minimum credit score of 580 and a minimum income of $24,000. Rocket Loans doesn't allow co-signers or co-borrowers.

In summary, Rocket Loans is a good option for borrowers with fair credit scores and at least two years of credit history who need fast funding. The lender offers low interest rates, same-day approval, and same-day funding may be possible. However, borrowers will face origination fees and repayment terms limited to three or five years. If you have a high credit score or can wait a little longer to receive funds, cheaper loan options may be available.

Tips for Comparing Personal Loans for Fair Credit

When comparing personal loans for fair credit , keep the following tips in mind:

Compare the Maximum Interest Rates

Be sure to compare the maximum annual percentage rates (APRs) of each loan provider. This will give you an idea of the highest interest rate you could be charged.

If Possible, Prequalify with a Provider

Consider prequalifying with a provider before applying for a loan. This can help you understand your eligibility and the loan terms you may qualify for.

Check for Additional Fees

Be aware of any additional fees, such as origination fees, late fees, or prepayment penalties. These fees can add up and increase the overall cost of your loan.

Evaluate the Lender's Customer Support Options

Consider the customer support options offered by the lender. Look for a lender with good customer service and support options, such as online chat or phone support.

By following these tips, you can make an informed decision when comparing personal loans for fair credit.

Methodology

To help you find the best lender for your needs, we reviewed 20 popular lenders based on 15 data points in five categories: Eligibility and Accessibility, Loan Cost, Loan Details, Customer Experience, and 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.

Within each category, we 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.

To ensure accuracy and fairness, where appropriate, we awarded partial points depending on how well a lender met each criterion. We assigned the following weightings to each category:

• Eligibility and Accessibility: 30%
• Loan Cost: 25%
• Loan Details: 20%
• Customer Experience: 15%
• Application Process: 10%

For more information on our editorial process and how we rate lenders, check out our Loans Rating & Review Methodology.

Guide To Fair-Credit Loans

If you have a fair credit score, you may still be eligible for a personal loan. Here is a guide to help you understand how personal loans can affect your credit score, how to improve your credit score before applying, and where to get personal loans with fair credit.

How To Qualify for Fair-Credit Loans

To qualify for fair-credit loans, you typically need a credit score between 630 and 689. Lenders will also look at your income, debt-to-income ratio, and credit history. Some lenders may require a co-signer or collateral to secure the loan.

How to Apply for Personal Loans for Fair Credit

To apply for personal loans for fair credit, gather your financial information, including your income, expenses, and credit score. Shop around for lenders that offer fair-credit loans and compare their rates, terms, and fees. Submit your application and wait for the lender to review and approve it.

Where To Get a Personal Loan With Fair Credit

You can get personal loans with fair credit from banks, credit unions, online lenders, and peer-to-peer lending platforms. Some lenders specialize in fair-credit loans, while others offer loans to borrowers with a range of credit scores.

How Does a Personal Loan Affect Credit Score?

Taking out a personal loan can affect your credit score in several ways. Applying for a loan can result in a hard inquiry on your credit report, which can lower your score temporarily. Making on-time payments can help improve your credit score, while missing payments can hurt your score.

How to Improve Your Credit Score Before Applying

Improving your credit score before applying for a personal loan can help you qualify for better rates and terms. Pay down your debts , make on-time payments, and avoid opening new lines of credit. You can also check your credit report for errors and dispute any inaccuracies.

Alternatives to Personal Loans For Fair Credit

If you don't qualify for a personal loan with fair credit, consider alternatives such as secured loans, credit cards, or borrowing from friends or family. You can also work on improving your credit score and try applying for a loan again in the future.

Recap: Best Personal Loans for Fair Credit

Some of the best personal loans for fair credit include Upstart, Avant, LightStream, Best Egg, and LendingClub. Compare rates, terms, and fees to find the best loan for your needs.

What Is a Fair Credit Score?

A fair credit score falls within the range of 580 to 669 on the FICO credit score scale, which spans from 300 to 850. Individuals with fair credit scores may encounter challenges when attempting to secure personal loans, credit cards, or mortgages due to the perceived higher risk associated with this credit category. To improve a fair credit score, it is advisable to focus on rectifying poor payment history, reducing credit utilization, and minimizing the number of credit applications or hard credit inquiries. Enhancing your credit score prior to loan applications can enhance your eligibility and lead to more favorable loan terms.

How Personal Loans Impact Your Credit Score

When you're in the process of obtaining a personal loan, it's essential to understand how it can affect your credit score. Here's a breakdown of the impact at different stages:

• Shopping for a Personal Loan: Initially, when you're shopping around for a personal loan, it generally does not influence your credit score. Most lenders use a soft credit check during the prequalification process, which does not negatively affect your credit. However, it's crucial to ensure that the lender uses a soft credit check to avoid any impact on your score.
• Applying for a Personal Loan: Once you apply for a personal loan, the lender will conduct a hard credit check, which may cause a temporary drop in your score, typically between one and five points. Hard credit checks usually affect your score for one year but remain on your credit report for two years. To minimize the impact, it's advisable to limit personal loan applications and reduce hard inquiries on your report.
• Repaying Your Personal Loan: Your payment history carries significant weight in determining your credit score, accounting for 35% of your FICO score. Timely payments on your personal loan can have a positive impact on your credit score. Conversely, missing payments can lead to a decline in your score.

Understanding these dynamics can help you navigate the personal loan process while being mindful of your credit score.

How to Improve Your Credit Score Before Applying

Improving your credit score before applying for a personal loan can help you qualify for better loan terms. Here are some 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. Make sure to pay all of your bills on time leading up to applying for a personal loan.
• Become an authorized user: If someone adds you as an authorized user to their credit card account, 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, which is 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: Increasing your credit limit can decrease your credit utilization ratio. To request a credit limit increase, contact your card provider. This may require a hard credit check that temporarily dings your score.

It's important to check your credit report for errors and dispute any inaccuracies with the credit bureaus.

Where to Get a Personal Loan with Fair Credit

If you have fair credit, banks may not be the best option for personal loans due to their strict credit requirements. Consider these alternatives:

• Credit unions
• Online lenders
• Family and friends
• Cash advance apps

Credit unions may offer lower interest rates and more flexible terms than traditional banks. Online lenders may also offer competitive rates and faster approval times. Family and friends may be willing to lend money with more lenient credit requirements. Cash advance apps may provide quick access to cash, but be aware of high fees and interest rates.

How To Qualify for Fair-Credit Loans

When you have fair credit, qualifying for a personal loan can be more challenging. However, there are strategies to improve your chances of getting approved for a loan.

Steps to Qualify for Fair-Credit Loans

• Preapproval: Seek lenders where you meet the minimum credit requirements and get preapproved for loans to explore qualifying rates without affecting your credit score.
• Consider Secured Loans: Secured loans, backed by collateral such as savings or your home, can be an easier option for loan qualification with fair credit. The collateral serves as a guarantee of repayment, making it less risky for the lender.
• Improve Credit Score: Review your credit report for errors and rectify them with the credit bureaus. Paying down credit card debt and addressing past-due accounts can enhance your credit score.
• Explore Specialized Lenders: Some lenders offer loans to individuals with fair or bad credit, but these may come with higher interest rates and fees. If possible, consider postponing borrowing to focus on improving your credit before applying for a loan.

By taking these steps, you can enhance your creditworthiness and increase your chances of qualifying for fair-credit loans.

How to Apply for Personal Loans for Fair Credit

If you have fair credit, getting approved for a personal loan may be more challenging than if you had excellent credit. However, there are still steps you can take to increase your chances of approval and get the best terms possible for your situation. Here is a general guide on how to apply for personal loans for fair credit:

1. Check your credit score: Before applying for a personal loan, check your credit score to get 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. You can check your credit score through your credit card provider or another credit-providing website.
2. Improve your score: If you have a fair credit score, you may not 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.
3. Evaluate your budget: Before 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.
4. 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. Prequalifying with multiple lenders can help you compare rates and terms to find the best offer.
5. 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.
6. 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.

Remember to read the terms and conditions carefully before accepting any loan offer. Make sure you understand the interest rate, repayment terms, and any fees associated with the loan. By following these steps, you can increase your chances of getting approved for a personal loan with fair credit and find the best terms possible for your situation.

Alternatives to Personal Loans for Fair Credit

If you have fair credit and cannot qualify for a personal loan, do not worry. There are several alternatives to personal loans that you can consider. However, before choosing any of these options, it is important to consider the pros and cons of each one. Here are some alternatives to personal loans for fair credit:

• 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

A 401(k) loan allows you to borrow from your retirement account, but it can come with high fees and penalties. A secured credit card requires a security deposit and can help you build your credit. A secured personal loan requires collateral and can have lower interest rates than unsecured loans. A buy-now-pay-later loan allows you to make purchases and pay them off over time, but it can come with high interest rates. A home equity loan or HELOC uses your home as collateral and can have lower interest rates than personal loans. Finally, community-based mutual and financial aid programs can provide assistance to those in need.