October 4, 2024

Best Personal Loans for Fair Credit in 2024

03 - 7 best personal loans for fair credit@1.5x

Almost 30% of Americans have a credit score that is “fair” or lower. And, while your credit score is only one part of your financial well-being, having a lower score makes it harder to get competitive rates on loans or higher credit limits.

Luckily, finding access to loans and borrowing money with a fair credit score is still possible. Let’s find out what a fair credit score is, walk through how to get a personal loan, and discover the best personal loans for fair credit.

What is a fair credit score?

Credit scores are a number that represents a person’s past relationship with debt and credit. They help creditors determine how risky it would be to lend to someone, based on their history of paying back debt.

The U.S. has two major credit score formulas: FICO and VantageScore. While both calculate scores from 300 to 850, they weigh factors slightly differently. For FICO, “Fair” is considered 580–669, and Vantage Score’s range is 601-660.

People with lower credit scores are considered riskier to lend to because the score could suggest a history of missing payments, not paying back debt entirely, or insufficient credit history. If you’re just starting to build credit for the first time, you’ll be starting with a lower score because you have little to no credit history. A higher credit score — which can simply come with a longer credit history — reinforces to the lender that you’re more likely to repay them because you’ve borrowed and repaid money consistently in the past.

How to get a personal loan with fair credit

A significant hurdle many consumers with fair credit face is finding a low-interest loan. Here are two tips to help optimize your chances of successfully getting approved.

1. Review your credit report and score

Reach out to the three major credit reporting agencies, TransUnion, Equifax, and Experian, to request a free copy of your credit report. You likely won’t know which service your lender is pulling your credit report from, so check your report from all three. Americans can request one free copy of their credit report from each agency each year.

When you receive your reports, verify that the information is correct to make sure there are no mistakes that could drag down your score, like a fraudulent charge or an inaccurate history. If there’s a mistake, report it to these agencies to make sure it gets fixed before submitting your loan application.

If you aren’t already doing so, use a free credit monitoring service like EarnIn’s Credit Monitoring tool to see your current credit score. This helps you guess your likelihood to be approved and research what interest rates are available. Consider when you need the loan and if you have time to improve your credit score to set yourself up for success.

2. Prequalify with lenders

When you’re ready to borrow money, your lender will run a hard credit check, causing your score to temporarily lower once your loan application is approved or denied. One way to minimize the impact on your score is to ask lenders to prequalify you. Prequalifying generally means the lender provides you with some borrowing options you’re likely to be approved for based on the information you give them. This information helps you choose the better lender and loan for your situation. Then you don’t risk harming your credit score to apply for a loan you won’t get approved for.

7 best personal loans for fair credit

There are many personal loan providers on the market, but it can be challenging to know who’s likely to approve you. Luckily, there are many loans for people with a credit score of 600.

Here’s an easy-to-compare table of 7 lenders likely to provide a small loan to people with fair credit.

Loan Provider	Best For	Minimum Credit Score	Interest Rates	Loan Amounts
Upgrade	Quick processing	560	8.49% to 35.99% APR	$1,000 to $50,000
Upstart	Considering more than just a person’s credit score	300	7.8% to 35.99% APR	$2,000 to $50,000
Prosper	Handling a variety of lending situations	560	8.99% to 35.99% APR	$2,000 to $35,000
Avant	Building credit	580	9.95% to 35.99% APR	$2,000 to $36,500
LendingPoint	Fast approvals	600	7.99% to 35.99% APR	$5,000 to $40,000
Happy Money	Great customer experience	640	11.72% to 17.99% APR	$5,000 to $40,000
Achieve	Personal loans for couples	620	8.99% to 35.99% APR	$1,000 to $50,000

How to choose the right personal loan for fair credit

Deciding the best lender is far from easy. You need to consider interest rates, borrowing amounts, fees, and any other conditions. Here are four tips for choosing the right personal loan.

Loan amount. Sometimes, a loan proposed to you may be more than what you need. While more money can provide flexibility, it also means higher payments and longer terms. Select the lender offering you the amount you actually need, not the amount they want to give. The extra money sounds great, but extra debt doesn’t.
Interest rate. Interest is the cost of borrowing money from a lender. The higher the interest rate, the more you’re ultimately paying to borrow that money. Selecting the lender with the lowest interest rate means you’ll pay the least amount on top of the borrowed amount.
Repayment time. Some loans have the repayment time clearly documented, while others may not. Tools like EarnIn’s free personal loan calculator help break down how long a loan will take to repay and how much you’ll pay in interest.
Fees. Before accepting a loan, review any associated fees. There can be fees for missed payments, setting up the loan, and even making a lump sum payment. Consider how this affects your intended repayment plan.

Alternatives to personal loans for fair credit scores

Personal loans aren’t for everyone, and you may need a loan with more flexibility or faster access. Here are a few alternatives to personal loans:

Credit cards. Credit cards offer a lot of flexibility regarding what you can buy and when to pay it back. If you can pay off your credit card bill by the end of your billing period, you won’t have to pay interest. But be careful — most credit cards have interest rates around 20%, so the cost of late payments adds up quickly.
Buy now, pay later. Buy now, pay later services can be an excellent choice if you only need to break up the total cost of a purchase into smaller, more manageable payments over a period like 4-8 weeks.
Earned Wage Access apps. Apps like EarnIn offer an easy, convenient, and secure way to get access to your money before your payday. EarnIn’s Cash Out tool lets you access up to $100/day and up to $750 every pay period with no credit checks, no interest, and no mandatory fees.

Use EarnIn and skip the loan

If you’re researching personal loans because you need cash now, consider downloading EarnIn to get access to your own pay as you earn it. With the Cash Out Tool, you can get up to $100/day and up to $750/pay period of your own pay. Instead of borrowing from a lender with a steep interest rate, you can spend money you’ve already made with no interest.

And with your EarnIn account, you can check your credit score for free anytime.

Download EarnIn and expand your financial toolkit today.

Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.

1. Calculated on the VantageScore 3.0 model. Your VantageScore 3.0 from Experian® indicates your credit risk level and is not used by all lenders, so don't be surprised if your lender uses a score that's different from your VantageScore 3.0. EarnIn services may not be available in all states. Learn more: https://www.experian.com/assets/consumer-information/product-sheets/vantagescore-3.pdf

2. EarnIn is a financial technology company, not a bank. Banking Services are provided by Evolve Bank & Trust, Member FDIC. Subject to your available earnings, Daily Max and Pay Period Max. EarnIn does not charge interest on Cash Outs. EarnIn does not charge mandatory fees for use of its services. EarnIn services may not be available in all states. Restrictions and/or third party fees may apply. For more info visit earnIn.com/TOS.

3. EarnIn does not charge interest on Cash Outs. Restrictions and/or third party fees may apply, for more information please review our Terms of Service available at http://EarnIn.com/TOS.