There’s no way to sugarcoat it: It’s harder for borrowers with fair credit to get a personal loan than it is for borrowers with good or excellent credit. But it’s still possible.
Fair or average credit (630 to 689 FICO score) lands between bad credit (629 and below) and good credit (690 to 719). With fair credit, you won’t qualify for the lowest-rate loans, but you may still find unsecured personal loans with rates and payments you can afford. Unsecured loans don’t require backing with an asset such as your car or savings, but rates can be higher than for secured loans.
Here are our picks for unsecured personal loans for fair credit, plus options for debt consolidation and borrowers with thin credit, a limited credit history.
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Personal loans for fair credit
LendingClub and Prosper are two options for borrowers with fair credit. They offer comparable loan terms and rates, with slight differences in qualifications and time to funding. You’ll need stronger credit to qualify for Prosper, which provides slightly faster funding than LendingClub.
•APR: 5.99% - 35.89% (4.99% with excellent credit)
•Loan amount: $1,000 - $40,000
•Loan terms: 3 or 5 years
•Minimum credit score: 600, but borrowers average 699
•Time to funding: Usually 7 days
•Fees: Origination fee of 1% - 6% of loan amount; fees for late payment, unsuccessful payment and personal check use
LendingClub requires a minimum credit score of 600 and three years of credit history to qualify. The average borrower has a score of 699 and more than 16 years of credit history.
Prosper is an option if you have slightly better credit: the lender’s minimum credit score requirement is 640, although its customers have an average score of 710. Funding takes one to three days after approval, compared to up to one week at LendingClub.
» MORE: Read our comparison of LendingClub and Prosper
Personal loans for debt consolidation
If you have fair credit and want to consolidate multiple high-interest debts into one new loan at a lower rate, Avant and FreedomPlus are two lenders offering loans geared toward borrowers who want to consolidate.
Half of Avant borrowers take out a loan for debt consolidation. The company has lower credit requirements than FreedomPlus, with a minimum credit score of 580. There are also no income requirements with Avant, although its borrowers generally earn more than $40,000 per year.
FreedomPlus is an option if you have slightly better credit; it requires a minimum credit score of 640. It also offers co-sign loans, and adding a co-signer can reduce your interest rate. You’ll need at least $30,000 in annual income to qualify.
Personal loans for ‘thin’ credit
Borrowers with a ‘thin’ or short credit history may still be able to qualify for loans with Backed and Upstart. Backed works best if you can apply with a co-signer, boosting your chances of qualifying if you don’t meet the lender’s minimum qualifications on your own.
Consider a personal loan from online lender Backed if you have a credit score of at least 660, at least six months’ credit history and annual income of at least $18,000 a year. If you don’t meet those qualifications and add a co-signer, your co-signer must have a credit score of at least 720 and income of at least $50,000 a year.
Upstart may be a good fit for borrowers with a credit score of at least 620, annual income of $12,000 and little to no credit history. The lender also considers academic history, job and income in its underwriting.
Build your credit for better rates
Your credit score is a key factor considered by lenders, and building your credit score can mean better odds of qualifying for a personal loan and getting a lower rate. Lenders may also weigh your debt compared to your income (calculated as debt-to-income ratio) and the length of your credit history.
More from NerdWallet
- Compare personal loans rates and terms
- Personal loans for debt consolidation
- Bank, credit union or online lender? Where to find a personal loan
Updated on Feb. 27, 2018.