If you have a FICO score between 580 and 669, that means you have fair credit. While there is no perfect fair credit loan for every borrower, it’s still possible to find the loan that best suits your intended purpose and financial situation.

Finding a lender that can cater to your needs, while still offering the most competitive rate is especially important as a fair credit borrower. That is because the lowest rates are typically reserved for borrowers with excellent credit, so you’ll need to do some research to find the one that offers you the most affordable loan.

Key takeaways

  • A personal loan for fair credit is one that's targeted toward borrowers with credit scores between 580 and 669.
  • Although you can get a fair credit loan from banks and credit unions, online lenders are typically the best option due to their flexible criteria.
  • To find the best credit loan, you'll need to factor-in eligibility requirements, loan amounts, interest rates, fees and additional perks, like rate discounts and joint applications.

7 key components of the best fair credit personal loans

To find the best personal loan for you and your needs as a fair credit borrower, consider where your priorities lie and what will benefit you most down the road.

1. Requirements for approval

Every lender has its own eligibility requirements for approval. Some lenders only work with borrowers with a certain score, income or debt-to-income ratio. While others — typically those that cater to borrowers with less-than-perfect credit — factor in one’s education history or allow borrowers to apply jointly with a co-signer that meets these criteria.

As a fair credit borrower, look for lenders that allow for a co-signer or have nontraditional approval criteria. You’ll likely walk away with a loan that has better terms and interest rates than those offered by lenders that use a traditional approval model or that only allow individual applications.

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Bankrate tip

If approval requirements are top-of-mind, explore personal loans offered by Upstart. The company considers education and employment along with your credit history.

2. Funding timeline

Depending on the use of your personal loan, the fund disbursement timeline could be a make-or-break factor when comparing lenders. If you are in a financial pinch that requires money as soon as possible, it is important to take stock of how quickly your personal loan will become available. Funding timelines will range greatly by lender so use this to measure if the loan is right for your needs.

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Bankrate tip

Some lenders in the Upgrade network state to have funding available as soon as the next day after approval, which is great for those in need of money quickly.

3. Interest rates

Lenders generally reserve the best rates to those with very good to excellent credit (or a FICO score of 740 and above), so as a fair credit borrower, you need to anticipate a higher rate. According to Bankrate, the average personal loan currently has an interest rate of 11.29 percent. However, those with fair credits get an average interest rate between 17.80 and 32 percent.

Many personal loan lenders offer prequalification as part of their approval process. Prequalifying for a loan allows you to see exactly what you’d be eligible for with a particular lender — including rates and terms — without impacting your credit.

Before applying for a loan, prequalify with at least three lenders to compare your predicted rates side-by-side. It’s also important to account for any fees charged by the lender to get a holistic view of how much you’ll actually be paying each month.

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Bankrate tip

The Chicago-based lender Avant is excellent for the rate-conscious borrower. Avant caters specifically to those with low credit, so it’s more likely that you’ll score a lower rate.

4. Loan amounts and use

Consider the use of your personal loan and the exact amount that you need to take out. Many lenders offer specific loans based on use, so it may be better to go with a lender that caters to these needs.

For example, some lenders offer loans specifically for home improvement or wedding expenses. Likewise, some lenders offer lower rates for personal loans intended to pay for certain purposes, such as medical expenses or debt consolidation. Going with an expense-specific lender could increase your chances of approval or, in some cases, a higher loan limit or a lower interest rate.

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Bankrate tip

Borrowers looking to borrow large amounts should consider Best Egg. The lender offers amounts up to $50,000, making it an ideal financing option for bigger projects or purchases.

5. Repayment terms

The repayment term of a loan is the number of months — or years — it will take to pay off your entire balance. The amount of time that you choose to pay off your loan is an important consideration when picking the best loan for your needs, as this will determine your monthly payment, as well as how much you pay in interest.

For instance, a longer repayment period automatically translates to a lower monthly payment, but that also means you’ll pay more in interest in the long run. On the other hand, a shorter repayment term will result in a higher monthly payment, but less money paid in interest over the life of the loan.

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Bankrate tip

Discover allows for a repayment period longer than most, up to seven years, best for those who need to stretch out their loan payments.

6. Unique features

Many lenders, especially in the fair credit space, have restrictions on what your loan can be used for. But outside of these restrictions, some lenders offer special perks to borrowers that can sweeten the deal and mean more competitive rates. These include interest rate discounts for things like enrolling in automatic payments or having an account with the company and the ability to add a co-signer to get a better rate.

When researching lenders, make sure to account for these, as you could end up with a more affordable loan, even if your credit isn’t in mint condition.

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Bankrate tip

Adding a co-signer can greatly improve your rates. Prosper is one lender that encourages joint applications, great for those needing an extra credit boost.

7. Customer support

Not only is customer service important following loan approval, but it can prove to be essential for those that need an extra hand during the application process. When shopping around pay close attention to support available, online or in-person, and how that approach fits your needs.

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Bankrate tip

Achieve doesn’t just have competitive interest rates — it also offers support seven days a week for its applicants and borrowers.

How to secure the best fair credit loans

To get the best personal loan as a fair credit borrower you must approach the process just as a borrower with a perfect score would — but with some additional care. Consider the following tips when shopping for a fair credit personal loan.

  • Apply for loan prequalification. While not all lenders offer this perk, prequalifying for your personal loan can help you to get a firm grasp on your monthly payment and the likelihood of approval.
  • Use a co-signer. Adding a co-signer, especially one with strong credit, will make you a more appealing borrower as it will create an added layer of reliability for the lender.
  • Use a local bank or credit union. Those with a previous relationship with a local institution can benefit from more competitive rates as a longstanding history of payments aids in approval.
  • Pay down debt. Your debt-to-income ratio serves as another measure of reliability when it comes to qualification. Work to pay down remaining debt ahead of loan exploration to ensure better rates.

The bottom line

Signing off on the best personal loan for fair credit requires a bit of reflection on what you need from your lender. This way you will walk away satisfied with a competitive loan for your specific wants. And as always, be sure to shop around and compare offers before finalizing.