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Best Personal Loans for Fair Credit of October 2020

Steve NicastroOctober 6, 2020

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Compare rates and terms at online lenders offering personal loans to borrowers with fair or average credit.

There’s no way to sugarcoat it: It’s harder for borrowers with fair or average credit (630 to 689 FICO score) to qualify for a personal loan than it is for borrowers with good or excellent credit. But it’s still possible, and some lenders will consider more than your credit score when determining your creditworthiness.

Compare personal loans at multiple lenders and choose one that offers the lowest rate. Here are your best options for fair credit loans, plus what you need to know.

Summary of Best Personal Loans for Fair Credit of October 2020

Our picks for

Personal loans for fair or average credit

Upgrade

on Upgrade's website

Upgrade

Upgrade

Min. Credit Score

580

Est. APR

7.99 - 35.97%

Loan Amount

$1,000 - $35,000

on Upgrade's website

Min. Credit Score

580

Key facts

Upgrade offers personal loans plus credit-building tools; you'll need strong cash flow to qualify.

Pros

  • Allows co-signed and joint loans.

  • Offers hardship program.

  • Offers direct payment to creditors with debt consolidation loans.

Cons

  • Charges origination fee.

  • Charges late fee.

Qualifications

  • Minimum credit score: 600.

  • Minimum annual income: None, but most applicants earn more than $30,000.

  • Minimum monthly free cash flow: $800.

  • Maximum debt-to-income ratio: 60%.

  • Unavailable to borrowers in: Iowa, Vermont and West Virginia.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 2.9% to 8%.

Disclaimer

Personal loans made through Upgrade feature APRs of 7.99%-35.97%. All personal loans have a 2.9% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's lending partners. Information on Upgrade's lending partners can be found at https://www.upgrade.com/lending-partners/. Accept your loan offer and your funds will be sent to your bank or designated account within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes the transaction. From the time of approval, funds should be available within four (4) business days. Funds sent directly to pay off your creditors may take up to 2 weeks to clear, depending on the creditor.
Read Full Review
Prosper

on Prosper's website

Prosper

Prosper

Min. Credit Score

630

Est. APR

7.95 - 35.99%

Loan Amount

$2,000 - $40,000

on Prosper's website

Min. Credit Score

630

Key facts

Prosper is a peer-to-peer lender with rates and fees that compare to other personal loan lenders.

Pros

  • No prepayment fee.

  • Option to change your payment date.

  • Offers joint loan option.

Cons

  • Charges origination fee.

  • Charges late fee of $15 or 5% of the unpaid loan amount.

Qualifications

  • Minimum credit score: 640, but average is 717.

  • Minimum credit history: Two years, but average is 11.

  • Minimum annual income: None, but average is $89,000.

  • Maximum debt-to-income ratio: 50% (excluding mortgage).

  • No bankruptcies filed within the last year.

  • Fewer than five credit bureau inquiries in the last six months.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 2.41 to 5%.

  • Late fee: $15 or 5% of unpaid amount (whichever is greater).

  • Insufficient funds fee: $15.

Disclaimer

For example, a three-year $10,000 personal loan would have an interest rate of 11.74% and a 5.00% origination fee for an annual percentage rate (APR) of 15.34% APR. You would receive $9,500 and make 36 scheduled monthly payments of $330.90. A five-year $10,000 personal loan would have an interest rate of 11.99% and a 5.00% origination fee with a 14.27% APR. You would receive $9,500 and make 60 scheduled monthly payments of $222.39. Origination fees vary between 2.41%-5%. Personal loan APRs through Prosper range from 7.95% to 35.99%, with the lowest rates for the most creditworthy borrowers. Eligibility for personal loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility for personal loans is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All personal loans made by WebBank, Member FDIC.
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FreedomPlus

on FreedomPlus's website

FreedomPlus

FreedomPlus

Min. Credit Score

620

Est. APR

7.99 - 29.99%

Loan Amount

$7,500 - $40,000

on FreedomPlus's website

Min. Credit Score

620

Key facts

FreedomPlus works for debt consolidation, with low starting rates and direct payment to creditors.

Pros

  • Offers co-signed and joint loans.

  • Offers direct payment to creditors with debt consolidation loans.

  • No prepayment fee.

Cons

  • May charge origination fee.

  • High minimum loan amount.

  • Charges late fee of $15 or 5%, whichever is greater.

Qualifications

  • Minimum credit score of 620. Borrowers' average is 690. The company uses the FICO 8 credit scoring model.

  • At least $40,000 in annual income. Borrowers’ average is $80,800. Joint applicants’ average is $107,200 combined.

  • Debt-to-income ratio: Less than 40%, not including mortgage. Average borrowers have a DTI of 20%.

Available Term Lengths

2 to 5 years

Fees

  • Origination fee: 1.99% - 4.99%.

  • Late fee: $15 or 5% of amount due, whichever is greater.

  • Unsuccessful payment fee: $15.

Disclaimer

The loan terms presented are not guaranteed and APRs presented are estimates only. To obtain a loan you must submit additional information and documentation and all loans are subject to credit review and our approval process. The range of APRs is 7.99% to 29.99% and your actual APR will depend upon factors including your credit score, usage and history, the requested loan amount, the stated loan purpose, and the term of the requested loan. To qualify for a 7.99% APR loan, a borrower will need excellent credit on a loan for an amount less than $12,000.00, and with a term equal to 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could help you also qualify for the lowest rate available. All loans are made by Cross River Bank and MetaBank®, N.A., Members FDIC.
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Avant

on Avant's website

Avant

Avant

Min. Credit Score

580

Est. APR

9.95 - 35.99%

Loan Amount

$2,000 - $35,000

on Avant's website

Min. Credit Score

580

Key facts

Avant's low starting rates make it a good option for borrowers with low credit scores and income.

Pros

  • Able to fund loans within one business day.

  • Soft credit check with pre-qualification.

  • Option to change your payment date.

Cons

  • Charges origination fee.

  • No option to include co-signer.

Qualifications

  • Minimum credit score of 580.

  • At least $20,000 in gross annual income.

Available Term Lengths

2 to 5 years

Fees

  • Administrative fee: Up to 4.75%.

  • Late fee: $25 (most states).

  • Unsuccessful payment fee: $15 (most states).

Disclaimer

A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33. Minimum loan amounts may vary by state. If approved, the actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. An administration fee of up to 4.75% will be deducted from the loan proceeds. Avant branded credit products are issued by Webbank, member FDIC
Read Full Review
Upstart

on Upstart's website

Upstart

Upstart

Min. Credit Score

600

Est. APR

6.16 - 35.99%

Loan Amount

$1,000 - $50,000

on Upstart's website

Min. Credit Score

600

Key facts

Upstart is a good option for those who have short credit histories and promising financial futures.

Pros

  • Accepts borrowers new to credit.

  • Fast funding.

Cons

  • Origination and late fees.

  • No secured or co-sign option.

Qualifications

  • Minimum credit score: 600.

  • Minimum credit history: None.

  • Minimum annual income: $12,000.

  • Max debt-to-income ratio: 45%.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 0% - 8%.

  • Late fee: 5% of past due amount or $15, whichever is greater.

Disclaimer

1)This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Rate and loan amount are subject to change based upon information received in your full application. This offer may be accepted only by the person identified in this offer, who is old enough to legally enter into contract for the extension of credit, a US citizen or permanent resident, and a current resident of the US. Duplicate offers received are void. Closing your loan is contingent on your meeting our eligibility requirements, our verification of your information, and your agreement to the terms and conditions on the www.upstart.com website. 2) § Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5,100. The minimum loan amount in GA is $3,100. 3) ‡ The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 15% and 36 monthly payments of $33 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
Read Full Review
RocketLoans
See my rates

on NerdWallet's secure website

Rocket Loans

RocketLoans

Min. Credit Score

580

Est. APR

7.16 - 29.99%

Loan Amount

$2,000 - $45,000

See my rates

on NerdWallet's secure website

Min. Credit Score

580

Key facts

Rocket Loans funds loans as fast as the next day. Its loans have low rates for borrowers with good credit.

Pros

  • Able to fund some loans the same day as approval.

  • Soft credit check with pre-qualification.

  • Rate discount for autopay.

Cons

  • Charges origination fee.

  • Does not offer direct payment to creditors for debt consolidation loans.

  • No co-sign, joint or secured loan option.

Qualifications

  • Minimum credit score: 580; borrowers’ average is 710. Rocket Loans uses the FICO 9 credit scoring model.

  • Maximum debt-to-income ratio: 40%; borrowers’ average is 14%. This lender doesn’t include a mortgage in its debt-to-income calculation.

  • Minimum annual income: $24,000; borrowers’ average is $85,000.

  • Minimum credit history: Two years; borrowers’ average is 18 years.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 1% to 6%.

  • Late fee: $15 after 10-day grace period.

  • Unsuccessful payment fee: $15.

Disclaimer

All personal loans are made by Cross River Bank, a New Jersey state chartered commercial bank, Member FDIC, Equal Housing Lender. All loans are unsecured, fully amortizing personal loans. Eligibility for a loan is not guaranteed. Please refer to our Disclosures and Licenses page for state required disclosures, licenses, and lending restrictions. Borrower must be a U.S. citizen or permanent U.S. resident alien at least 18 years of age (in Nebraska and Alabama a borrower must be at least 19 years of age). All loan applications are subject to credit review and approval. Offered loan terms depend upon your credit profile, requested amount, requested loan term, credit usage, credit history and other factors. Not all borrowers receive the lowest interest rate. To qualify for the lowest rate, you must have excellent credit, meet certain conditions, and select autopay. Rates and Terms are subject to change at any time without notice. Please refer to RocketLoans.com and our Terms of Use for additional terms and conditions.
Read Full Review
Lending Club
See my rates

on NerdWallet's secure website

LendingClub

Lending Club

Min. Credit Score

600

Est. APR

10.68 - 35.89%

Loan Amount

$1,000 - $40,000

See my rates

on NerdWallet's secure website

Min. Credit Score

600

Key facts

LendingClub is a pioneer of peer-to-peer lending and a good option if you want to consolidate your debt.

Pros

  • Offers direct payment to creditors with debt consolidation loans.

  • Joint loan option.

  • Soft credit check with pre-qualification.

Cons

  • Charges origination fee and late fees.

  • Does not offer mobile app to manage your loan.

Qualifications

  • Minimum credit score of 600. LendingClub uses FICO 8 credit scoring model.

  • Minimum credit history of three years.

  • Debt-to-income ratio of less than 40% for single applications, 35% combined for joint applicants.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 2% to 6%

  • Late fee: Greater of $15 or 5% of payment after 15-day grace period.

Disclaimer

*All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage and history. The APR ranges from 10.68% to 35.89%. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long-term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: 595 Market St suite 200 San Francisco Ca 94105. **Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between Jan. 1, 2018, and July 20, 2018. The time it will take to fund your loan may vary.
Read Full Review

How much will a personal loan cost?

As with most credit products, the rate you receive on a personal loan depends a lot on your credit score. Borrowers with fair or average credit will pay a higher rate — somewhere around 20%, according to a NerdWallet lender survey — than those with good credit. The interest rate also affects your total monthly payment, as does the term length; a longer term means lower monthly payments, but more interest.

Use our personal loan calculator to estimate your monthly payments based on your credit score.

How to qualify for fair-credit loans

Focus on your credit score. Even if lenders look at other factors, your credit score is a key consideration. Building your credit can mean better odds of qualifying and getting a lower rate.

Add a joint applicant or co-signer to your application. There are risks to co-signing, but it’s an option that can help you qualify for a loan that you wouldn’t be able to on your own because of fair credit or low income. Online lenders and banks offer joint and co-signed loans.

Consider a credit union. Credit unions tend to know their members and their financial histories and may offer lower rates and more flexible terms to borrowers with average credit. Federal credit unions cap interest rates at 18%.

Pre-qualify with multiple lenders. Many online lenders allow you to pre-qualify to see rates and terms you may receive. This usually involves a soft credit check, which doesn’t affect your credit score, and it allows you to compare rates and terms.

» MORE:  5 ways to boost your chances of qualifying

Pre-qualify for a personal loan

Most online lenders will give you preview of the rates and terms you may receive by performing a soft check of your credit. This won’t affect your credit score, so it pays to take the steps to pre-qualify for a loan with multiple lenders and compare rates and loan features. You can pre-qualify on NerdWallet and see rates from lenders that partner with us.

Last updated on October 6, 2020

Methodology

NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews.

To recap our selections...

NerdWallet's Best Personal Loans for Fair Credit of October 2020

  • Upgrade: Best for Personal loans for fair or average credit
  • Prosper: Best for Personal loans for fair or average credit
  • FreedomPlus: Best for Personal loans for fair or average credit
  • Avant: Best for Personal loans for fair or average credit
  • Upstart: Best for Personal loans for fair or average credit
  • Rocket Loans: Best for Personal loans for fair or average credit
  • LendingClub: Best for Personal loans for fair or average credit

Frequently asked questions