Our guide to the best personal loans for fair credit
You may have fair credit (a score from 630 to 689) if you’ve missed payments on credit cards or loans in the past or you have a limited credit history. Having fair credit, however, won’t exclude you from getting a personal loan. You just might have less borrowing options and a higher annual percentage rate than if you had good or excellent credit. Fair-credit borrowers can qualify for personal loans from $1,000 to $50,000 from online lenders, which tend to offer loans to borrowers across the credit spectrum. Credit unions are another good option for personal loans since APRs at federal credit unions are capped at 18%. Credit unions typically have less strict borrowing requirements compared to banks, though a strong relationship with your local bank could improve your chances of qualifying with fair credit.
Here’s what makes our picks for the best personal loans for fair credit stand out.
Achieve: Best fair-credit loans for joint borrowers
When you have a fair credit score, adding a co-borrower with a higher score or income could help you qualify or get a better rate. Not all lenders offer joint loans, but Achieve does. Achieve also offers a rate discount of up to 4 percentage points for borrowers that opt for a joint loan, which is a rare perk.
Prosper: Best for fair-credit loans with an easy application process
Prosper is a peer-to-peer lending platform that uses alternative data in its underwriting process to approve more applicants across the credit spectrum. Prosper says potential borrowers can apply for a loan in minutes either online or using its mobile app, and loan decisions are made instantly. Upstart: Best fair-credit loans for borrowers with limited credit history
Upstart works with borrowers who are new to establishing a credit history, so consider this lender if you have a thin credit profile. Instead of relying solely on credit scores, Upstart analyzes alternative data such as an applicant’s education background and work experience.
Upgrade: Best overall fair-credit personal loans
Upgrade has several factors that make it NerdWallet’s top pick for the best personal loan for fair-credit borrowers. It has a low minimum credit score requirement, multiple rate discounts and fast funding. Upgrade also allows fair-credit loan applicants to use collateral to secure a loan or add a co-borrower to the application — both of which can boost chances of loan approval or getting a lower APR.
LendingPoint says its application takes minutes to complete, qualified applicants can receive approval in five minutes and its loans are typically funded within 24 hours, making it a fitting option if you need a personal loan fast.
Best Egg: Best secured personal loans for fair credit
Best Egg offers two ways to secure a personal loan. Borrowers can either use a vehicle as collateral or, if they’re homeowners, they can secure their loan using permanent home fixtures like kitchen cabinets or bathroom vanities. Best Egg’s secured personal loans typically have lower rates than its unsecured loans.
Happy Money: Best debt consolidation loans for fair credit
Happy Money’s “Payoff Loan” is specifically for borrowers who want to consolidate their debt — either credit cards or other personal loans. If you qualify for a Happy Money loan, the lender offers the option of sending the loan proceeds directly to your creditors, saving you from that additional step. Happy Money says applicants can qualify for a loan if their debt-to-income ratio is as high as 55% (including mortgage debt).
What to consider when comparing personal loans
Here are the top features to compare on fair-credit loans.
Annual percentage rate
A personal loan APR is its interest rate plus upfront fees. This is the best apples-to-apples cost comparison tool for personal loans and other financing options like credit cards. Lenders weigh your financial and credit information differently, so it pays to compare rates from multiple lenders.
Fair-credit borrowers tend to get personal loan rates that are higher than what good- or excellent-credit borrowers qualify for, but lower than rates for bad-credit borrowers. Here are average personal loan rates by credit score:
Borrower credit rating | Score range | Estimated APR |
|---|
Excellent | 720-850. | 11.81%. |
Good | 690-719. | 14.48%. |
Fair | 630-689. | 17.93%. |
Bad | 300-629. | 21.65%. |
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified through NerdWallet from January 1, 2024, through December 31, 2024. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below 500 — are unlikely to qualify. Information in this table applies only to lenders with maximum APRs below 36%.
Fees
Origination fees are common on fair-credit personal loans from online lenders. This fee is usually from 1% to 10% of the loan amount, and a lender typically takes it from the funds before depositing them into your bank account. Monthly payments
Assess your budget to make sure you can comfortably afford the monthly payment on a personal loan. While a lender should disclose the monthly payments before you sign a loan agreement — usually when you check your rate or once you’re approved — you can also use a personal loan calculator to estimate your potential monthly payment, based on your loan amount, estimated rate and desired repayment term.
Estimated monthly payment
$309.92
Total interest over 3 years
$1,156.95
Total loan payment
$11,156.95
PRINCIPAL AMOUNT — $10,000TOTAL INTEREST PAID — $1,156.95
Repayment term
Repayment terms for fair-credit personal loans typically range from two to seven years. A longer term lowers your monthly payment, but increases the total interest cost. Choose a repayment term that helps you clear the debt in a timely manner while keeping payments affordable. Other features
If you’re choosing between two affordable offers, compare these other features:
Time to fund: Personal loans are often funded in less than a week, but some lenders can fund a loan the business day after you’re approved. If you need the funds quickly, consider lenders that offer same- or next-day funding.
Credit building tools: Ideally, you’ll leave this loan with better credit than when you got it. Most lenders report payments to all three major credit bureaus, but be sure yours does before signing the loan agreement to get credit for on-time payments. Some lenders offer credit score monitoring, so you can see how payments affect your score. Payment flexibility: Some lenders require you to keep your original payment date for the lifetime of the loan. If you think you’ll need more flexibility, look for a lender that lets you change the payment date.
Steps to get a personal loan
Review your credit. Check your reports from the three credit bureaus to spot any errors or opportunities to improve your credit. If you don’t need a loan right away, consider taking extra time to build your credit before you apply for a personal loan.
Pre-qualify with multiple lenders. Pre-qualifying for a personal loan lets you see how likely you are to be approved and preview potential offers. Check offers from multiple lenders to find the best rate and terms.
Submit a formal application. Once you’ve found a lender, it’s time to apply. Many lenders have online applications that take only a few minutes to complete, but some banks and credit unions may require an in-person visit. A tip to speed things up: Gather documents, including W-2s, pay stubs and government-issued IDs, before you apply.
Sign loan documents and receive funding. If approved, your final step will be to sign your loan documents. Read the fine print so you understand all aspects of the loan agreement. Most lenders will fund a loan within a few days. Your first payment date will usually be 30 days after funding, so make sure to add your new loan payment to your budget.
Tips to boost your chances of qualifying for a personal loan with fair credit
Secure the loan: Most personal loans are unsecured, but some lenders offer secured personal loans, which require collateral. Pledging something valuable to take if you can’t repay makes the loan less risky for the lender, which may mean better approval odds for you. Banks and credit unions typically let you use a savings or investment account to secure the loan, while online lenders prefer a vehicle. Add a co-applicant: Adding a co-signer with better credit and a higher income may help you qualify for a lower rate. A co-signer is someone who agrees to pay the loan if you can’t, but that person doesn’t have access to the money. You may also consider a joint personal loan, which is similar to a co-signed loan except that your co-applicant can access the funds. In both cases, if you fail to repay the loan, your co-applicant is responsible for repayment — and both of your credit scores can take a hit. Add up income streams: Lenders verify your income to make sure you’re able to repay a loan. Many personal loan lenders accept income from not just from employment, but from alimony, Social Security payments, child support and retirement. Be sure to account for all your income on a personal loan application.
How to improve fair credit
Taking the time to build credit before applying for a personal loan could get you a lower APR or larger loan amount.
Make on-time payments. The more consistently you make on-time payments toward your credit cards, mortgage or car loan, the more likely you are to build your score.
Keep credit utilization low. You can quickly lower your utilization by asking your credit card company to increase your limit, but the request may trigger a hard credit inquiry, which can cause your score to dip temporarily. Become an authorized user. If you can get yourself added as an authorized user to a family member’s or partner’s credit card, the positive payment history they’ve built up can benefit your credit. You don’t have to get access to the card to become an authorized user.
Alternatives to personal loans for fair-credit borrowers
Fair-credit personal loan rates can be high, so compare alternative borrowing options to find the right one for your budget and expense.
Credit cards: While personal loans work best for large, one-time expenses, credit cards are better for everyday use. Some cards for fair credit even come with rewards. Like personal loans, your credit is a factor in determining whether you qualify for a credit card, and your rate will likely be high, which is especially important to remember if you tend to carry a balance.
Buy now, pay later: If you need to make a large purchase such as a mattress or laptop, a “buy now, pay later” loan may be an inexpensive alternative to personal loans and credit cards. BNPL apps often only do a soft credit check and don’t charge interest on their short-term payment plans. BNPL is offered at most major retailers. Proceed with caution, though, as these plans can lead to overspending. Cash advance apps: A cash advance app lets you borrow up to a few hundred dollars from your next paycheck. Like payday loans, apps don’t check credit and withdraw repayment on your next payday, but they usually have lower fees. If you can repay the money in two weeks or less, an advance from an app can get you cash quickly.
Family loans: Though it could be uncomfortable to ask, a loan from a friend or family member can be an affordable, no-credit-check borrowing option. You and the lender can draw up a loan agreement, including rates, terms and interest, to avoid any misunderstandings. Tread lightly with this type of loan — your relationship with the lender could be damaged if you fail to repay the loan as promised.
