FICO defines fair credit as a credit score between 580 and 669. Although many personal loans require credit scores higher than this, the lenders on this list are appropriate for those with fair credit.
While you can get a loan with a credit score below 670, you shouldn’t expect the best terms. Loans with high loan limits and low interest rates are typically reserved for those with the best credit.
But don’t be disheartened. Even if your credit score is between 580 and 669, lenders are still willing to lend to you. Here are the top six personal loans for people with bad credit.
Compare personal loan rates from top lenders
When you borrow money, your credit score is an important factor to consider. Many loans with favorable terms are available to you if your credit score is excellent.
However, if your credit score is fair—in the 580 to 669 range on the FICO score scale—finding a good deal on a personal loan may be more difficult. Some lenders might refuse to work with you at all.
Other lenders may charge you a rate that is several percentage points higher than the rate offered to more creditworthy borrowers.
Even though borrowers with fair credit are unlikely to qualify for the best personal loan rates, many lenders still provide financing options at a reasonable cost.
Interest rates, fees, loan amounts, and other terms can vary greatly between lenders. So, before making a decision, carefully weigh your options.
Best Personal Loans for Fair Credit
To qualify for a personal loan, you’ll typically need to have good to excellent credit. If you have fair credit, which is usually defined as a credit score between 640 and 699, you may have a more difficult time getting approved.
However, there are several lenders who provide personal loans for people with bad credit.
Remember that the best personal loans for bad credit offer competitive interest rates, a diverse range of loan terms, and comprehensive eligibility requirements.
Upgrade
Upgrade, which debuted in 2017, offers online and mobile credit and banking services in all states except Iowa, Vermont, and West Virginia.
Since then, the platform has made over $3 billion in credit available to over 10 million applicants while also expanding its online and mobile services.
Although the maximum APRs are higher than those offered by other online lenders, Upgrade makes loans available to people with bad credit.
Loan amounts are flexible but cap out at $35,000, which is lower than lenders who focus on more creditworthy borrowers. Loan terms of three and five years are available.
Upgrade charges an origination fee ranging from 2.9 percent to 8% of the loan amount, and borrowers will be charged a $10 fee if their payment is more than 15 days late or does not go through; there are no discounts for autopay.
However, Upgrade borrowers are not subject to a prepayment penalty, so if you can pay off the loan early, you can reduce the overall cost of the loan.
Upgrade, in addition to providing accessible personal loans, streamlines the lending process with a mobile app that allows borrowers to view their balance, make payments, and update personal information.
Upgrade’s Credit Heath tool also makes it simple to monitor your credit score over the course of your loan.
Extra Details
Eligibility: To qualify for an Upgrade personal loan, prospective borrowers must have a minimum credit score of 580 (the average borrower score is 697), making it an accessible option for those with fair credit.
Furthermore, the lender does not require applicants to meet a minimum income requirement, despite the fact that borrowers earn an average of $95,000 per year.
Applicants should have a pre-loan debt-to-income ratio of no more than 45 percent, excluding their mortgage.
Each applicant’s free cash flow is also considered by the lender, as it demonstrates their likely ability to make consistent on-time loan payments. Applicants should ideally have a monthly cash flow of at least $800.
By allowing co-applicants, the loan becomes more accessible.
Loan purposes: Loans from Upgrade, like most other personal loans, must be used to pay off credit cards, consolidate other debt, make home improvements, or pay for other large purchases.
Upgrade, on the other hand, distinguishes itself from other lenders by allowing borrowers to use personal loan funds to cover business expenses.
Furthermore, Upgrade will pay third-party lenders directly, making debt consolidation more convenient than with some competing lenders.
Other than those already imposed by law, there are no specific prohibitions on the use of Upgrade loans.
Turnaround time: Once an Upgrade loan is approved, a borrower can expect to receive funds within four business days.
However, if Upgrade is directly repaying a borrower’s loans to a third-party lender, the funds may take up to two weeks to clear.
Best For a Range of Repayment Options
Avant
Avant, based in Chicago, was founded in 2012 and is a consumer lending platform that provides secured and unsecured personal loans through a third-party bank (WebBank).
Unsecured loans are available in all states except Hawaii, Louisiana, Nevada, and South Carolina, as well as Washington, D.C.
The platform caters to middle-income borrowers with fair to good credit, and a minimum credit score of 580 is required to qualify.
Maximum loan amounts are low in comparison to other lenders, but the low minimum amount and flexible repayment terms (two to five years) make it a viable option for borrowers.
However, as with many subprime loans, Avant personal loans come at a cost. There is no autopay discount, in addition to an administrative fee of up to 4.75 percent of the loan amount.
Nonetheless, the platform receives high marks for borrowers with less-than-perfect credit who require quick access to funds.
It’s also worth noting that in April 2019, Avant reached a $3.85 million settlement with the Federal Trade Commission (FTC).
According to FTC documents, the lawsuit was filed in response to allegations that Avant, among other things, charged consumers late fees and interest that they did not owe and collected payments from customers without permission or in amounts greater than authorized.
We contacted Avant to find out what they’ve done to change their practices since the settlement, but we didn’t receive a response.
Extra Details
Eligibility: Avant’s goal is to provide credit services to a wide range of customers, including those with poor credit.
As a result, Avant requires a minimum credit score of 580, with the average borrower scoring between 600 and 700.
Similarly, Avant targets low- to middle-income borrowers and has a $20,000 minimum income requirement, despite the fact that most borrowers have an average household income of $40,000 to $100,000.
Avant will consider more than just your employment income, including alimony and child support, and may also consider the income of other people in your household to determine eligibility. However, Avant does not accept co-signers or co-applicants.
Avant loans, like many other personal loan providers, can be used to consolidate debt and pay for things like medical expenses, auto repairs, home improvements, moving, vacations, and travel.
Personal loan funds cannot be used to cover business expenses for Avant borrowers, but the platform does allow current borrowers to refinance their existing Avant loans with another loan—possibly with a lower APR.
Time to receive funds: Avant applicants who are approved for an unsecured loan before 4:30 p.m. Central time Monday through Friday may receive their funds the following business day.
However, the funding timeline varies depending on the borrower’s bank, as it does with other lenders. Borrowers who take out secured loans may also have to wait longer.
Best for Lower Interest Rates
LightStream
Truist, which was formed by the merger of SunTrust Bank and BB&T, has a consumer lending division called LightStream.
The platform provides unsecured personal loans ranging from $5,000 to $100,000. Although a number of lenders offer loans that are smaller than the LightStream minimum, only a few lenders offer loans that are larger than the LightStream maximum.
Repayment terms range from two to seven years, making it an excellent choice for those who want to spread out large expenses over time.
In addition to attractive and flexible terms, LightStream does not charge origination, late payment, or prepayment fees.
Borrowers who enroll in autopay will also be eligible for loans with interest rates as low as 2.49 percent, the lowest on our list.
It also provides a 30-day loan experience guarantee, Covid-19/hardship assistance, and a rate-beat program to ensure borrower satisfaction.
For applicants who meet certain criteria, LightStream will beat a competitor’s interest rate by 0.1 percent.
LightStream provides loans in all 50 states, as well as Washington, D.C. and Puerto Rico, and applicants can contact the lender’s customer service team seven days a week; current borrowers can contact customer service Monday through Saturday.
Additionally, while LightStream does not provide a mobile app for loan management, customers can access their accounts via LightStream.com.
Extra Details
Eligibility: To qualify for a personal loan, LightStream requires a minimum FICO credit score of 660.
Applicants should also have several years of credit history, including multiple account types, as well as an income that is stable enough to service current debts and a new LightStream loan to increase their chances of approval.
LightStream does not allow prospective borrowers to prequalify for a loan. This fact, combined with the minimum credit score requirement, makes the platform a better fit for those with a solid credit history.
Applicants with good credit are also more likely to receive favorable terms. Although LightStream does not accept co-signers, prospective borrowers can submit a joint application.
Personal loans from LightStream can be used for a variety of purposes, including the purchase of a new car, RV, or jewelry, as well as the payment of home improvements.
LightStream, on the other hand, stands out because loans can be used to finance land, timeshares, and so-called tiny homes.
LightStream, like other top lenders, prohibits the use of its personal loans for post-secondary education costs, business purposes, or illegal activities.
Borrowers are also prohibited from refinancing an existing LightStream loan with LightStream loan funds.
Turnaround time: If the loan is approved before 2:30 p.m. Eastern time on a banking business day, LightStream borrowers can receive funds the same day.
To be eligible for same-day funding, the applicant must also review and electronically sign the loan agreement, provide LightStream with funding preferences and relevant banking information, and complete the final verification process by 2:30 p.m. on the day the loan is approved.
