The Bankrate guide to choosing the best personal loan for fair credit
Reviewed by
Mark Kantrowitz, Bankrate Financial Review Board memberAs of Saturday, June 12, 2021
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When comparing the best loans for people with fair credit, the first thing to look for is the lender’s minimum credit score requirement. Then, it’s important to compare interest rates across multiple lenders; unsecured loans for fair credit tend to carry higher APRs than loans for good or excellent credit, so shopping around is critical. Also, before deciding on a lender, make sure it offers flexible repayment terms and keeps fees to a minimum.
Loan details presented here are current as of the publication date. Check the lenders’ websites for more current information. The lenders listed below were selected based on factors such as credit requirements, APR, loan amounts and fees. To learn more, read our methodology section.
Best personal loans for fair credit in 2021
| Avant |
9.95%–35.99%
|
$2,000
|
$35,000
|
| Best Egg |
5.99%–29.99%
|
$2,000
|
$50,000
|
| Upgrade |
5.94%–35.97% (with autopay)
|
$1,000
|
$50,000
|
| Payoff |
5.99%–24.99%
|
$5,000
|
$40,000
|
| Upstart |
7.68%–35.99%
|
$1,000
|
$50,000
|
| LendingClub |
8.05%–35.89%
|
$1,000
|
$40,000
|
| Prosper |
7.95%–35.99%
|
$2,000
|
$40,000
|
| FreedomPlus |
7.99%–29.99%
|
$7,500
|
$50,000
|
| Discover |
6.99%–24.99%
|
$2,500
|
$35,000
|
| PenFed |
Starting at 5.99%
|
$600
|
$35,000
|
| LendingPoint |
9.99%–35.99%
|
$2,000
|
$36,500
|
| LightStream |
2.49%–19.99% (with autopay)
|
$5,000
|
$100,000
|
What you need to know about fair-credit loans
What does it mean to have fair credit?
Having fair credit means that you have some credit history but a moderately low credit score. People with fair credit typically have credit scores ranging from 580 to 669.
If you have a 600 credit score, for instance, you may have missed a few payments or you might carry a high balance on your credit cards. You may still qualify for a loan, but only with select lenders. If you do qualify, you might not get the lowest interest rate available. Those are reserved for people who have excellent credit.
Lenders that offer personal loans for fair credit may charge more or higher fees than lenders that target borrowers with good or excellent credit. This means that in addition to repaying your principal balance and interest, you might be on the hook for more money over the life of your loan.
FICO credit score ranges
| Excellent |
800–850
|
21%
|
| Very good |
740–799
|
25%
|
| Good |
670–739
|
21%
|
| Fair |
580–669
|
17%
|
| Very poor |
300–579
|
16%
|
Source: Experian
Can I get a personal loan with fair credit?
Not all lenders offer loans to borrowers with fair credit since it's seen as a greater risk to the lender. However, many lenders will consider credit scores in the low 600s, though they'll likely charge higher interest rates.
Explore lenders that advertise fair credit scores before you apply. Additionally, check out lenders that offer prequalification. Prequalification lets you share some information with the lender but doesn’t result in a hard credit check, which would temporarily cause your credit score to dip. It also lets you see if you’re eligible for a loan from a particular lender.
What are the best personal loans for fair credit?
It's critical to choose a reputable lender for a fair-credit loan. In your search, you may encounter payday lenders or other predatory lenders, which advertise no-credit-check loans in exchange for extremely high APRs and fees. If you see a loan offer that's too good to be true or that has very short repayment terms or APRs in the triple digits, it's best to steer clear.
The best personal loans for borrowers with fair credit, such as those with a 600 credit score, generally come with APRs between 10 percent and 30 percent, few fees and a variety of repayment terms. The lenders profiled on this page are good places to start. They are reputable companies with loans for a variety of needs.
How to qualify for a loan with fair credit
To improve your chances of obtaining a personal loan with fair credit, try taking the following steps before you apply:
- Use a co-signer: While a co-signer adopts some responsibility for your loan — and therefore some risk — they may also make it easier for you to qualify. Choosing a co-signer with good credit will improve your overall creditworthiness.
- Prequalify: If you're unsure if you'll qualify for a loan with a particular lender, see if it offers prequalification. That way, you'll avoid harming your credit score even further before applying.
- Pay down debt: Many lenders consider your debt-to-income ratio in addition to your credit score. By paying down credit card debt before applying for a loan, you'll look better to potential lenders.
- Use a local bank or credit union: Your existing bank or a local credit union may be more lenient when it comes to your credit score, especially if you have a history of timely payments on your accounts.
How to improve your fair credit score
Raising your credit score will give you the best chance of qualifying for a personal loan with lower rates. Ways to improve your credit score include:
- Pay off existing debt: Your credit utilization ratio makes up 30 percent of your FICO score. Lowering your total debt shows more responsible use of credit.
- Make payments on time: Payment history makes up 35 percent of your credit score, so making late payments or missing payments altogether will tank your score.
- Keep old accounts open and don't open new ones: Keeping old, unused accounts open raises the average age of your accounts, which makes up 15 percent of your credit score. Don’t open new credit accounts before applying for a loan, as that will lower the average age of your account.
How to choose a fair-credit lender
If you don’t have good or excellent credit, you might not find favorable lending terms for your personal loan needs. To find the best lender for you, keep an eye on the factors below.
Watch out for high interest rates
Many personal loan lenders advertise low APRs, but those rates are reserved for people with the best credit. With fair credit, you can expect higher APRs. When researching personal loan lenders, look for those that offer the lowest interest rates based on your credit score.
Assess fees and repayment terms
Find a lender that has minimal fees and flexible repayment terms, such as choosing your due date. Additionally, some lenders offer longer repayment terms that could reduce your monthly payment amount.
Find lenders that allow co-signers
If you can’t find a lender because of your fair credit score, search for one that allows co-signers. Also, consider waiting until you can boost your score.
Fair-credit personal loans in June 2021
Avant: Best for very low credit
Overview: Avant targets bad- and fair-credit borrowers. Most of its borrowers have credit scores between 600 and 700, which covers much of the range for fair credit.
Why Avant is the best for very low credit: While Avant doesn't advertise its eligibility requirements on its website, a representative says the lender requires a 580 FICO score and 550 Vantage score.
Perks: With Avant, you can receive your funds as soon as the next business day after approval, and repayment terms are as long as five years.
What to watch out for: The lowest APR available is 9.95 percent, which is much higher than those of competitors. Avant also charges an administration fee and late fees.
| Avant |
| 4.5 / 5.0 |
| 580 FICO and 550 Vantage |
| 9.95%–35.99% |
| $2,000–$35,000 |
| 2 to 5 years |
| Not specified |
| Administration fee: up to 4.75%; Late fee: $25; Dishonored payment fee: $15 |
Read Bankrate's expert Avant review
Best Egg: Best for home improvements
Overview: Best Egg offers personal loans to borrowers with credit scores ranging from fair to excellent. Terms are three to five years.
Why Best Egg is the best for home improvements: Loan amounts range from $2,000 to $50,000, making them ideal for home improvement expenses from repairs to remodeling projects.
Perks: Approval and deposit of funds can come as quickly as one business day.
What to watch out for: The origination fee can go as high as 5.99 percent, and there’s a $15 late fee.
| Best Egg |
| 4.6 / 5.0 |
| 600 |
| 5.99%–29.99% |
| $2,000–$50,000 |
| 3 to 5 years |
| Not specified |
| Origination fee: 0.99% to 5.99%; Late fee: $15; Returned payment fee: $15 |
Read Bankrate's expert Best Egg review
Upgrade: Best for fast funding
Overview: Upgrade offers loans ranging from $1,000 to $50,000 for a variety of purposes, like an emergency or debt consolidation.
Why Upgrade is the best for fast funding: Once you’re approved for a loan and your information is verified, you could receive your funds within one business day.
Perks: You can take advantage of the 5.94 percent APR if you qualify. The rate is lower than the minimum APR from most lenders profiled on this page.
What to watch out for: Upgrade’s origination fee can go as high as 8 percent, and if you don’t pay your loan on time every month, you could face a $10 late payment fee.
| Upgrade |
| 4.8 / 5.0 |
| Not specified |
| 5.94%–35.97% (with autopay) |
| $1,000–$50,000 |
| 2 to 7 years |
| None |
| Origination fee: 2.9% to 8%; Late fee: up to $10; Returned check fee: $10 |
Read Bankrate's expert Upgrade review
Payoff: Best for credit card debt
Overview: If you’re facing a mountain of credit card debt, you might be best suited for a Payoff personal loan for debt consolidation.
Why Payoff is the best for credit card debt: Payoff’s loans are exclusively for consolidating credit card debt, and the company provides your FICO score for free each month to help you track your progress.
Perks: There are no application or annual fees. Additionally, there are no fees for making late payments, paying your loan off early or paying by check.
What to watch out for: Even though you can get a Payoff loan with fair credit, its minimum credit score requirement is 640, which is on the higher end of a fair credit score. Payoff loans can also only be used for credit card debt consolidation, so it's not a good choice if you're looking to use a personal loan for emergency expenses or home improvements.
| Payoff |
| 4.5 / 5.0 |
| 640 |
| 5.99%–24.99% |
| $5,000–$40,000 |
| 2 to 5 years |
| Not specified |
| Origination fee: 0% to 5% |
Read Bankrate's expert Payoff review
Upstart: Best for short credit history
Overview: While Upstart evaluates your credit score to determine your creditworthiness, it’s not the company’s only method. It will also consider your education and job history, which might be helpful if you’re struggling to qualify for a personal loan based on your credit score.
Why Upstart is the best for short credit history: You can apply for a personal loan even with little credit on your report, and Upstart’s minimum credit score is 580.
Perks: You can borrow as little as $1,000, and there’s no penalty for paying your loan off early.
What to watch out for: If you don’t qualify for a loan on your own, you might have to look elsewhere, since Upstart doesn’t allow co-signers.
| Upstart |
| 4.5 / 5.0 |
| 580 |
| 7.68%–35.99% |
| $1,000–$50,000 |
| 3 or 5 years |
| Not disclosed |
| Late fee: 5% or $15 (whichever is greater); Origination fee: up to 8%; Returned check fee: $15; One-time paper copies fee: $10 |
Read Bankrate's expert Upstart review
LendingClub: Best for availability in most states
Overview: LendingClub offers personal loans of $1,000 to $40,000 for three- or five-year terms.
Why LendingClub is the best for availability in most states: While some lenders only operate in a limited number of states, LendingClub accepts applications from borrowers in every part of the U.S., except Iowa and U.S. territories.
Perks: You may qualify for a loan if you have a credit score of at least 600. The lender also allows a 15-day grace period on late monthly payments.
What to watch out for: It can take several days to receive your funds. You’ll also be subject to an origination fee of up to 6 percent.
| LendingClub |
| 4.3 / 5.0 |
| 600 |
| 8.05%–35.89% |
| $1,000–$40,000 |
| 3 or 5 years |
| Not specified |
| Origination fee: 3% to 6%; Late fee: greater of 5% or $15 |
Read Bankrate's expert LendingClub review
Prosper: Best for joint applicants
Overview: Prosper offers loans to borrowers with fair credit that’s on the higher side. The minimum credit score is 640, so if you’re still in the fair range but moving up, you might qualify.
Why Prosper is the best for joint applicants: Prosper accepts joint applications, and having a co-borrower could improve your chances of being approved for a loan or for a larger loan amount.
Perks: Prosper lets you change your monthly due date to ensure on-time payments.
What to watch out for: Prosper charges many fees, including an origination fee of 2.41 percent to 5 percent, a late fee of 5 percent or $15 (whichever is greater), a $15 insufficient funds fee and a check fee of 5 percent or $5 (whichever is less). Getting your money can take up to three days after you’re approved, which might be too long, depending on your situation.
| Prosper |
| 4.4 / 5.0 |
| 640 |
| 7.95%–35.99% |
| $2,000–$40,000 |
| 3 or 5 years |
| None |
| Origination fee: 2.41% to 5%; Late fee: greater of 5% or $15; Insufficient funds fee: $15; Check fee: lesser of $5 or 5% |
Read Bankrate's expert Prosper review
FreedomPlus: Best for competitive interest rates
Overview: FreedomPlus offers loans of $7,500 to $50,000, with funding in as few as 48 hours.
Why FreedomPlus is the best for competitive interest rates: Whereas its maximum APR is 29.99 percent, some personal loan lenders charge as much as 36 percent.
Perks: While FreedomPlus does not disclose its eligibility requirements, it is possible for borrowers with credit scores in the low- to mid-600 range to be approved.
What to watch out for: The minimum loan amount of $7,500 is a bit high compared with other options on this list. If you need to borrow less, you’ll need to explore other personal loan options.
| FreedomPlus |
| 4.3 / 5.0 |
| Not specified |
| 7.99%–29.99% |
| $7,500–$50,000 |
| 2 to 5 years |
| Not specified |
| Origination fee: 1.99% to 4.99% |
Read Bankrate's expert FreedomPlus review
Discover: Best for longer repayment terms
Overview: While Discover accepts borrowers with fair credit, it favors those on the higher end of the fair-credit spectrum; borrowers typically have credit in the mid-600 range to qualify for a personal loan. If you’re on the lower end of fair credit, you may not qualify.
Why Discover is the best for longer repayment terms: Its relatively long repayment terms — up to seven years — could mean lower monthly payments.
Perks: Discover offers competitive interest rates, fast funding and no origination fee or closing costs.
What to watch out for: The $39 late fee is high compared with competitors. Additionally, Discover doesn’t have a co-signer option.
| Discover |
| 4.8 / 5.0 |
| 660 |
| 6.99%–24.99% |
| $2,500–$35,000 |
| 3 to 7 years |
| $25,000 |
| Late payment fee: $39 |
Read Bankrate's expert Discover review
PenFed: Best for credit union members
Overview: PenFed is a credit union offering unsecured personal loans of up to $35,000. Its loan eligibility requirements are undisclosed, but third-party sources claim credit score requirements hover in the mid-600s.
Why PenFed is the best for credit union members: Anyone can join PenFed, and it serves all 50 states and Washington, D.C.
Perks: The low minimum loan amount of $600 is enticing for those who don’t need to borrow much but still need help.
What to watch out for: You'll have to become a member of PenFed to get a loan from the credit union, and the length of your PenFed membership can be a factor in determining your APR.
| PenFed |
| Not specified |
| Starting at 5.99% |
| $600–$35,000 |
| 1 to 5 years |
| Not specified |
| Late fee: $29; Returned check fee: $30 |
Read Bankrate's expert PenFed review
LendingPoint: Best for subprime borrowers
Overview: LendingPoint specializes in loans for subprime borrowers, with loan amounts of $2,000 to $36,500.
Why LendingPoint is the best for subprime borrowers: You could get a loan with a credit score as low as 590, which is on the lower end of the range for fair credit.
Perks: There is no prepayment penalty for paying your loan off early, and the credit score requirement is low compared with other fair-credit lenders.
What to watch out for: You’ll need to prove income of at least $35,000 and employment. There’s no co-signer option, which means if you don’t qualify on your own, you won’t be able to get a loan.
| LendingPoint |
| 4.4 / 5.0 |
| 590 |
| 9.99%–35.99% |
| $2,000–$36,500 |
| 2 to 5 years |
| $35,000 |
| Origination fee: 0% to 6% |
Read Bankrate's expert LendingPoint review
LightStream: Best for a wide range of repayment terms
Overview: Despite a minimum credit score requirement of 660, LightStream has personal loan options to cover all your borrowing needs.
Why LightStream is the best for a wide range of repayment terms: Depending on how much you borrow, you can take up to 12 years to pay off your loan.
Perks: LightStream doesn't charge any fees, and the company allows joint applications, which may be helpful if you have trouble qualifying on your own.
What to watch out for: The minimum credit score threshold is on the higher side of the fair-credit spectrum. You’ll need to prove a few years of credit history as well.
| LightStream |
| 4.6 / 5.0 |
| 660 |
| 2.49%–19.99% (with autopay) |
| $5,000–$100,000 |
| 2 to 12 years |
| Not specified |
| None |
Read Bankrate's expert LightStream Bank review
Alternative loan options for fair credit
If you’re unable to take out a personal loan due to your fair credit, you may want to look at other options.
- Credit union: While you usually have to join a credit union before taking out a personal loan, they tend to be more forgiving to those with fair credit. Talk to your local credit union about what you need to qualify.
- 0 percent APR credit card balance transfer: If you’re looking to pay off credit card debt, consider getting a credit card with a 0 percent APR introductory offer. That way, you can move your balance over and keep interest from adding up. Keep in mind that you might not qualify for the full balance to be moved over, so there’s a chance that you’ll end up paying off your new card while still making payments on your old one.
- Home equity loan or line of credit: If you have a home, you may be able to use that as collateral and take out a home equity loan or home equity line of credit (HELOC). Remember, your home is used to secure the loan, so if you miss payments, the house could be subject to foreclosure.
Additional personal loan resources:
