Best Personal Loans for Fair Credit in December 2024

Upgrade offers the best personal loans for fair credit, thanks to low credit score requirements, secured loans, discounts, and fast funding. In addition to Upgrade, Prosper and OneMain Financial are other strong options.

If you have fair credit (a FICO score of 580 to 669) and need a loan, be prepared to pay a higher interest rate. Borrowers with fair credit prequalified for personal loan rates from 26% to almost 30%, according to Credible’s personal loans data. 

Why you can trust Credible

The Credible editorial team is independent and unbiased, which means that partners do not influence our editorial content. To help you find the best personal loan for your situation, we analyzed over 800 personal loan data points across 30 lenders. Using data-driven methodologies, we scored criteria that are important to you. This approach allows us to objectively rank personal loans. To learn more, read our methodology below.

Best personal loans for fair credit

Fair credit personal loans may not have the lowest rates, but they can help you save money relative to other forms of debt, like credit cards, and may offer lower monthly payments.

Methodology

Credible evaluated the best personal loans for fair credit based on customer experience, minimum and maximum interest rates, origination fees, minimum and maximum loan amounts, minimum and maximum loan terms, discounts, the availability of secured loans, whether cosigners are accepted, and more. Special consideration was given to lenders that offer rate discounts.

Credible's team of experts gathered information from each lender's website, customer service department, directly from our partners, and via email support. Each data point was verified by a senior editor for accuracy.

Learn more about how Credible rates lenders by exploring our Personal Loans Lender Rating Methodology.

How to compare fair credit personal loan lenders

When you’re evaluating fair credit personal loan lenders, these are the key criteria to compare:

• Available loan amounts: See whether the amount you need to borrow falls within the lender’s range. If you need a $50,000 loan and the largest loan available is $35,000, look at other lenders or other borrowing options. Loan size can also vary by state.
• Annual percentage rate (APR): APR captures both the interest rate and upfront fees on a loan so you can compare loan costs across lenders. 
• Fees: Most personal loans for fair credit have an origination fee. This fee gets subtracted from your loan amount before the funds are disbursed, meaning you’ll receive a smaller amount than what you borrowed. The higher the fee, the more you’ll have to borrow to end up with the sum you need. 
• Discounts: Some lenders offer rate discounts for autopay or for sending loan money to your creditors directly (if you’re consolidating debt). 
• Terms: If you want a 12-month loan term and a lender doesn’t offer it, you may be able to get a 24-month loan and repay it early. Before borrowing, make sure there’s no prepayment penalty. But if you want a 96-month term and the lender’s maximum is 60 months, you may need to look elsewhere. 
• Borrower requirements: See how your credit and financial profile compare to the lender’s ideal customer. Some lenders’ requirements are more relaxed than others regarding income, credit score, and credit history (like most of the lenders above).
• Speed: Make sure the lender can provide the money by the time you need it. If the lender says they offer same-day or next-day funding, read the fine print to determine what the exceptions are and/or what the application cut-off time is. 
• Reputation: It can be tricky to assess a financial service provider’s reputation. Customers who write reviews are often disgruntled, which can skew ratings negatively. On the other hand, some companies actively request reviews from satisfied customers. Take them with a grain of salt, but still check out reviews on sites like Trustpilot and the Better Business Bureau (BBB) to get the full picture. 
• Availability: Some lenders don’t offer personal loans in every state. Make sure your state isn’t excluded.

What is fair credit?

Your credit score is a three-digit number that suggests your level of risk to lenders. FICO credit scores range from 300 to 850, with a lower score indicating a higher level of risk. A credit score between 580 and 669 qualifies as a fair score, according to FICO.

FICO score ranges include: 

• Poor: less than 580
• Fair: 580-669
• Good: 670-739
• Very Good: 740-799
• Exceptional: 800+

Your credit score can vary depending on which of the three national credit bureaus (Equifax, Experian, or TransUnion) calculates it and what credit scoring model they use. FICO scores are used by 90% of lenders, but some lenders use VantageScore, a model with scores ranging from 300 to 850. This model defines scores of 300 to 600 as “subprime” and scores of 601 to 660 as “near prime.” TransUnion uses the VantageScore scoring model, while Experian uses FICO. Equifax uses its own scoring model, and its scores range from 280 to 850.

Additionally, lenders and creditors don’t always report credit data to all three national credit bureaus. Instead, they may only report to one or two. This can also impact your overall score.

Related: What Credit Score Is Needed for a Personal Loan?

What are fair credit personal loans and how do they work?

A fair credit personal loan allows you to borrow money for almost any purpose even if you don’t have good credit. It’s just like any other personal loan except lenders offering them consider borrowers with fair credit. 

Personal loan features

• Payments and terms: Personal loans typically have fixed monthly payments and fixed interest rates with repayment terms that range from as short as one year to more than 10, depending on the lender and the loan’s purpose. 
• APRs: APRs for fair credit loans average between 26% and 30%, depending on the repayment term, and according to Credible data. But we may see rates come down since the Federal Reserve made the second of two interest rate cuts this year in November.
• Loan amounts: How much you’ll qualify to borrow depends on your income, credit, and existing debt. But many lenders offer loans up to $50,000. Some offer larger loans, especially if used for home improvements.
• Funding time: Some lenders can send money as soon as the same day you apply, as long as you submit your application by that lender’s cutoff time and are approved that day. Typically, you can expect to receive funds within three business days once you’re approved.

Secured vs. unsecured personal loans

Most personal loans are unsecured loans, but some lenders give fair credit (and bad credit) borrowers an easier avenue to approval via secured loans. Secured personal loans require collateral, like your car or a savings account, that can be seized by the lender if you default on the loan. 

Common personal loan uses

Since the average personal loan interest rate is lower than the average credit card rate, personal loans are often a good alternative to credit cards. 

In fact, they’re often used to consolidate credit card debt, also referred to as credit card refinancing. This can result in lower payments and/or lower overall cost. While loans for fair credit may not have lower APRs than your credit cards, they don’t charge compound interest (interest that’s charged on interest you haven’t paid yet) — compound interest is one reason credit card debt can get out of control so quickly. 

In addition to debt consolidation, personal loans are frequently used to pay for home improvements and renovations. Personal loans typically can’t be used to pay for higher education or business expenses, but policies and acceptable uses vary by lender.

Average personal loan rates for fair credit borrowers

Personal loan rates change as market conditions change, though unlike credit card rates, your personal rate is locked in once you’ve signed your loan documents. 

Bad and fair credit borrowers with scores below 680 can expect to pay personal loan rates ranging from around 26% on a three-year loan to 30% on a five-year loan, according to Credible marketplace data.

Getting your score above 680 (in good credit territory) and choosing a three-year term instead of a five-year term could reduce your rate by about 10 percentage points. That difference wouldn’t cost too much more each month, but could mean major savings over your loan term. You’d also be able to pay off the loan in almost half the time.

$15,000 personal loan example

Try using a loan calculator like the one below to estimate your monthly payments. 

Where can I get a personal loan with fair credit?

If you have fair credit, credit unions and online lenders are likely your best options for getting a personal loan. However, a solid relationship with a local bank could work in your favor.

• Banks: Compared to credit unions and online lenders, banks may have the strictest credit requirements. While major national banks often require at least good credit for loan approval, having a strong relationship with your local bank might enhance your chances of getting a loan with fair credit. 
• Credit unions: A credit union might consider factors beyond your credit score and income. If you've been a long-term member, regularly pay off your debts, and maintain a good account standing, the credit union may take that into account. Even for non-members, credit unions often have lower credit requirements than banks. Plus, most cap personal loan interest rates at 18%. Payday alternative loans (PALs) are capped at 28%.
• Online lenders: Some online lenders use alternative data to assess your overall financial situation, not just your credit score and income, which can make them a good choice if you have fair credit. You can prequalify with multiple online lenders to gauge your chances of approval and see potential rates without impacting your credit score.

How to get a personal loan with fair credit

While it is possible to get a personal loan with fair credit, you may have a harder time qualifying, and you’ll likely have to pay a higher interest rate. There are a few things you can do to increase your chances of getting a personal loan with fair credit:

• Know your credit score: You can request a free copy of your credit report and credit score from the three national credit bureaus with Credible's credit monitoring tool. You can also access a free copy of your full credit report from each of the bureaus at AnnualCreditReport.com. Once you know your credit score, start researching lenders that require a minimum credit score below yours. 
• Consider a secured loan: If you want a lower APR, consider a secured personal loan, also known as a collateralized loan. This is a loan that requires you to put up an asset as collateral, like your car. Putting up collateral lowers the lender's risk and can often help you get a better rate. If you default on your loan, however, you risk losing your collateral. 
• Look for lenders that accept cosigners: Cosigners are often family members or good friends who agree to take responsibility if you do not pay your debt. Applying with a cosigner can help you qualify for a loan or get a better rate, as having a second person with a good credit score on the loan reduces the risk to the lender. However, few lenders offer this option.
• Review minimum credit score requirements: Some lenders make their minimum credit scores publicly available. Check lender websites and loan comparison marketplaces for credit score minimums by lender.

How to improve your credit score

Securing a lower interest rate on a personal loan can help you save money. Before applying, consider taking some time to improve your score. This can increase your chance of qualifying for a better rate. 

Your FICO score is calculated based on five main categories: 

To boost your score, consider the following tips: 

• Pay your bills on time: Make sure you pay your bills on time, every time. Consider automating your bill payments to help ensure you never miss a deadline. 
• Avoid maxing out your cards: Aim to use less than 30% of your available credit. If you do have to use more, try to repay all or most of the balance right away.
• Consolidate your debt: Consolidating high-interest credit card debt with a debt consolidation loan can increase the available credit on your credit cards, which can reduce your credit utilization and increase your score in a short period of time. It can also make it easier to afford monthly payments.
• Avoid closing old accounts: If you have old accounts that you no longer use, avoid closing them. But if you’re tempted to spend on the card when you shouldn’t, it may be better to close it. 

Alternatives to fair credit loans

If you’re struggling to qualify for a fair credit loan or want to avoid paying a high APR, consider the following alternatives to personal loans: 

• Credit cards: It may be possible to qualify for a credit card with a fair credit score. However, you may pay a higher rate than what you’d get with a personal loan. A credit card can make sense if you’re able to pay your balance off in full every month. 
• Credit-builder loan: If you need a relatively small loan and can wait for the money, consider a credit-builder loan. With this type of loan, you make a series of payments, usually from six months to two years, and then receive the money. Your payments are reported to the credit bureaus, which can improve your credit score.
• Peer-to-peer lending: Through peer-to-peer (P2P) lending platforms, individual investors can lend money to other individuals. Prosper offers P2P personal loans with a minimum credit score requirement of 600.

Read More: 

• Best Personal Loans for Good Credit
• Best Personal Loans for Bad Credit
• Best Personal Loans for Excellent Credit
• Best Emergency Loans for Poor Credit
• Best Low-Interest Personal Loans