Personal loans are a useful form of financing because you can use the money you borrow for almost anything you want, from home improvements to paying off credit card debt. Unfortunately, if you have only fair credit—as opposed to good or excellent credit—it can be hard to qualify for a loan.
You don’t want to take out a payday loan because you could quickly get trapped in a debt cycle, and racking up credit card debt irresponsibly can also be disastrous for your finances due to high interest rates.
Fortunately, there are some lenders that offer personal loans to people with fair or average credit histories. You might not qualify for the best personal loan rates, but these loans are preferable to other forms of revolving debt.
We’ve ranked and rated the top five lenders offering fair credit personal loans with reasonable terms. Check them out to see if you can qualify, and compare quotes from different lenders so you can find the money you need at a rate you can afford.
On this page:
- LendEDU’s 5 Best Personal Loans for Fair Credit
- What do I Need to Apply?
- How to Qualify for Fair Credit Personal Loans
Best Personal Loans for Fair Credit
To pick the best lenders offering loans to borrowers with fair credit, we analyzed the weighted average of 16 data points. Here are our top picks.
Compare Fixed Rate Personal Loans
Loans from $5,000 to $100,000 – Rate Beat Program
- Fixed rate loans from 4.99% APR
- Funds available as soon as the same day
Borrow what you need – as little as $5,000 or as much as $100,000
- Rates starting at 5.74% APR
- No origination fees or pre-payment penalties
Loans up to $4,000 – No credit check required
- Get your cash as soon as the next business day
- Affordable payments and personal service
LendEDU’s 5 Best Personal Loans for Fair Credit
Marcus is a personal loan and banking company operated by Goldman Sachs. It offers personal loans at a fixed rate with no fees.
- Minimum Credit Score: 660
- Loan Amounts: $3,500 to $40,000
- Loan Terms: 36 – 72 months
- APRs: 5.99% – 28.99%
- There’s no origination fees, late fees, or prepayment penalties.
- Loan funds can be used for anything you’d like.
- Marcus will send payment directly to creditors if you’re taking a personal loan to consolidate debt.
- Marcus recommends you have a FICO score of 660 or higher.
- You may be denied unless you can prove an annual income of at least $40,000.
- You may not get approved if your debt-to-income ratio is too high.
If you can qualify, Marcus personal loans are a great option. You won’t have to worry about fees, you’ll have flexibility in loan terms, and you’ll be able to choose your loan repayment timeline.
DCU is a credit union that provides personal loans at competitive rates for up to 60 months. Here’s what you need to know about DCU personal loans.
- Minimum Credit Score: No minimum
- Loan Amounts: $300 – $25,000
- Loan Terms: Up to 60 months
- APRs: Start at 8.00%
- Interest rates are competitive.
- You can qualify for discounts if you set up autopay or if you have a DCU checking account.
- There are no loan application fees, origination fees, or prepayment penalties.
- You have to be a credit union member to qualify.
- Maximum loan repayment terms are shorter than some competitor options.
- Some competitors offer lower starting APRs on their loans.
If you’re a DCU member, applying for a DCU personal loan can be a great choice—especially as there’s no minimum credit score requirement unlike with some other lenders on this list.
Payoff focuses on debt consolidation loans and allows you to check your rate online with a soft credit check, so your credit score won’t be affected. Here’s what you need to know about getting a personal loan from Payoff.
- Minimum Credit Score: 640
- Loan Amounts: $5,000 – $35,000
- Loan Terms: 24 – 60 months
- APRs: 5.99% – 24.99%
- You can check your rate in just three minutes without your credit score being affected.
- There are no loan application fees or late fees charged.
- The starting APR is below what some competitors charge.
- The loan is intended for consolidating debt, so you may have less flexibility in what you can do with borrowed money.
- You can’t borrow as much as with many other lenders.
- There’s a minimum credit score requirement, so not everyone will qualify, but it’s lower than the minimum required by some other lenders on this list.
Payoff makes it easy to check your rates, and it offers competitive APRs along with no fees and flexibility in loan repayment terms. Since you can get your rate without affecting your score, it’s worth checking what you’d qualify for when comparing your loan options.
FreedomPlus is a personal loan lender that provides funds as soon as 48 hours after you apply—but you have to talk to a loan consultant to get approved.
- Minimum Credit Score: Not provided
- Loan Amounts: $7,500 – $40,000
- Loan Terms: 2 – 5 years
- APRs: 5.99% to 29.99%
- You can get funds within 48 hours.
- There are no prepayment penalties or hidden fees.
- FreedomPlus looks beyond your credit score when deciding if you’ll be approved.
- Application process can’t be completed entirely online; you must talk with a consultant.
- There’s an origination fee between 0% and 5%, based on your loan amount and term length.
- The minimum loan balance is higher than with some competitors.
- The maximum loan repayment term is shorter than with some competitors.
- If you have poor credit, you may receive higher interest rates than with some competitors.
If you need fast funding and don’t mind talking to a loan consultant, FreedomPlus is a good option for you to consider. You just need to supply your consultant with your signature, a valid ID, and a verified bank account with proof of income.
Regions Bank provides personal loans to be used for any purpose, including debt consolidation, home improvement, and emergency expenses. You could get money deposited the same or next business day if you’re a Regions Deposit account customer.
- Minimum Credit Score: No minimum credit score
- Loan Amounts: $2,000 – $35,000 (or up to $50,000 if you apply via branch or phone)
- Loan Terms: 3 – 5 years
- APRs: Not provided
- Get fast access to funds, especially for Regions Bank deposit account customers.
- Loan minimums are below what some competitors require you to borrow.
- There’s no minimum credit score requirement.
- The best deals are for existing Regions Bank customers.
- There’s a late payment fee of 5%.
- You may have to pay a loan processing fee.
Regions Bank loans are ideal for existing customers, but they could also be a good option for other borrowers, especially those looking to borrow a smaller amount of money.
How We Chose the Best Personal Loans for Fair Credit
To find the best personal loans for fair credit, our Editorial Team reviewed 37 personal loan lenders based on product information, fees, eligibility & application, customer support, and discounts & benefits. There were multiple data points analyzed within each category and each data point was weighted by importance.
Learn more about our ratings and methodology here.
What Do I Need to Apply for Personal Loans With Fair Credit?
In most cases, it’s possible to apply online for a personal loan. You can submit simple online applications with all of our top lender choices as well as with many other banks, credit unions, and online lenders. Try to look for lenders that allow you to submit your details and get pre-approved with only a soft credit check, as hard credit checks will show up as inquiries on your credit report and stay on your report for two years. Too many inquiries hurt your credit score.
When you apply for a personal loan online, you’ll need to provide some basic information so a lender can assess your qualifications. Some of the information you may be asked to provide include:
- Your name, address, phone number, email, and other contact details
- Your Social Security number so the lender can check your credit
- Details about your income and employment history
- Information about your other debts
- What you plan to use your personal loan for
Many lenders provide a fast answer when you’ve submitted your application, so you’ll know within minutes if you are approved for the loan.
How to Qualify for Personal Loans With Fair Credit
Your credit score is typically the primary factor lenders consider when you apply for personal loans. Your credit score provides a shorthand way for lenders to assess whether you’ve been a responsible borrower in the past and whether you’re likely to keep up with payments this time around. However, just because you have fair or average credit, you won’t necessarily be precluded from getting a personal loan. You just need to identify lenders willing to issue loans to people with fair credit—and make sure you meet their minimum qualifications.
For many lenders, you’ll need a minimum credit score of 630 or higher. While many lenders also have minimum income requirements, those minimums vary by lender. If you do not meet these minimum qualifying criteria, or if you meet the minimum requirements but want to qualify with other lenders at better loan rates, there are some things you can do.
Improve Your Credit Score
Improving your credit score is one of the best ways to get better loan offers and to qualify for personal loans with more lenders. Fortunately, there are many ways you can boost your score—and some tactics take as little as 30 days.
To improve your credit score, follow these steps:
- Check your credit report for mistakes and dispute any incorrect information that could be bringing your score down.
- Work on paying down debt as quickly as possible.
- Ask for a credit line increase from current credit card issuers to improve your credit utilization ratio—but don’t use your new credit.
- Make sure to submit all ongoing monthly payments on time.
- Consider writing a professional letter to creditors asking if they’re willing to remove a record of a past late payment from your report.
- See if someone with good credit may be willing to add you as an authorized cosigner to one of their accounts so it shows up on your credit report and you benefit from its positive payment history.
Bring a Co-Signer
If you have a family member or friend with good credit, you could ask them to cosign on a personal loan for you. A cosigner is jointly responsible for loan repayment, so lenders consider the cosigners credit and income when deciding whether to lend to you. Adding a cosigner with good credentials can significantly improve your chances of getting approved and receiving a favorable rate because the lender won’t have to rely solely on you to pay back the debt.
>> Read More: Personal loans with a co-signer
Just be aware your borrowing behavior reflects on the cosigner. Don’t ask someone to cosign for you if you aren’t 100% sure you can afford to repay the loan without any late payments.
Join a Credit Union
Credit unions are often more lenient than other financial institutions in granting loans to people with imperfect credit. They also often offer lower interest rates. Credit unions can afford to be less expensive and have more relaxed qualifying standards because they are member-owned non-profits, while banks are for-profit enterprises owned by private individuals or traded publicly and owned by shareholders.
Membership requirements vary by credit union, but if you have fair credit and want to maximize your chances of getting approved for a loan, it may be worth looking for a credit union you can join. Once you’ve become a member, you can apply for a credit union personal loan.
Shopping around for a loan can also help you to find the best rates. You should go through the prequalification process to get several quotes from different lenders, then choose the lender that offers you the lowest rate for the loan term you need.
Author: Christy Rakoczy
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