A personal loan can help you take control of high-interest debts or fund a major purchase. Most of them have fixed monthly payments, which can make it easier to budget for your payments. And there’s no need to pledge collateral to get approved, as there is with some other types of loans. If you have fair credit, a variety of lenders can help you get a personal loan with reasonable terms.
It’s wise to shop around and compare terms from several lenders. But stick to lenders who do a “soft pull” or “soft inquiry” of your credit report or those who say that checking offers won’t hurt your credit score.
What it Means to Have Fair Credit
The term “fair credit” here refers to your FICO score. We’re assuming lenders use the FICO 9 scoring model, and we’re targeting personal loans for scores in the 650 to 699 range. If you have a lower credit score, check out our list of best personal loans for bad credit.
For the list below, we’ve chosen lenders likely to provide the funding you need at a reasonable price and with fixed interest rates. What’s more, these lenders should be easy to work with because your time is valuable. The process doesn’t need to be painful.
Best Personal Loans for Fair Credit
Prosper.com was a pioneer in online lending and claims its place as the first peer-to-peer (P2P) lender in the U.S. Prosper keeps it simple with a three-year repayment term or a five-year option, and you can pay off your loan early at no additional charge. Rates range from 5.99% to 35.97% APR. However, with fair credit, expect rates near the middle of that range—the lowest rates are only available to borrowers with excellent credit.
Fixed rates make it easy to budget while you pay off debt
Three- and five-year terms keep payments manageable without piling up interest costs
No prepayment penalty
Easy to check your rate before borrowing
Depending on creditworthiness, high rates can make borrowing expensive
Origination fees require borrowers to take out extra to fund major purchases
Upstart, launched in 2014 by former Google executives, takes a unique approach to evaluating personal loan applications. In addition to reviewing your credit history and income, Upstart takes your education and work history into account when approving loans. APRs range from 6.14% to 35.99%, and Upstart reports that the average borrower pays 20% APR. Upstart may charge a one-time origination fee, as well.
Your degree or work history can help you get approved with fair credit
Loans as small as $1,000
Three- and five-year repayment terms
Next-day funding available
Fixed interest rates
Origination fees as high as 8%
Potential for high rates, depending on your application
LendingClub is a marketplace lender offering P2P loans as well as funding from institutional investors. According to a LendingClub representative, you can qualify with a credit score as low as 600. Other factors, like your income and debt payments, affect whether or not you’ll get approved. Rates range from 6.95%-35.89% APR, and you pay an origination fee of 1% to 6% when you receive funds.
Personalized rate quotes are quick and easy to get
Fixed interest rates keep loan payments stable
Loan amounts as little as $1,000 available
No prepayment fees, so you can repay early
Potentially expensive borrowing source if you pay the highest rates
It can take seven days to receive funds after you apply
SoFi has relatively low rates and no origination fee. But it requires a credit score of at least 680, making it harder for those with fair credit to obtain a personal loan. That said, if your credit score is high enough, factors like your work history and your income can help you secure those lower rates. APRs range from 5.99% to 20.91%.
No late payment fees, though late payments can damage your credit
Signing up for automatic payments reduces your rate by 0.25 percentage points
Fixed rate prevents surprise payment increases
No origination fee
Minimum loan amount of $5,000 ($10,000 in CA) might be more than you need
You might not qualify with fair credit
Marcus is a relative newcomer to personal loans, but Goldman Sachs is a well-established financial services company. Marcus evaluates your credit history alongside other financial details like your income and housing expenses to determine your creditworthiness. According to a Marcus representative, you can qualify with a FICO Score as low as 660. Rates range from 6.99% to 28.99% APR, and there are no fees to borrow with Marcus.
No origination fee
No late fees, though paying late can increase costs and damage your credit
Fixed interest rate for consistent payments
Minimum loan amount of $3,500 could exceed your needs
Best for Personal Attention: Local Banks and Credit Unions
When you’re applying for a personal loan, it’s wise to include a local financial institution in your search. Particularly with fair credit, you might benefit from having a human rather than an automated system review your finances.
For example, you might be able to explain temporarily-high credit card balances that were a result of unexpected medical bills. Plus, if a bank employee can see your checking and savings accounts—which shows healthy financial behavior—they may be more likely to make exceptions.
Credit unions, as community-focused, not-for-profit organizations, might be especially willing to approve your application.
Potential same-day funding
A loan officer at the financial institution might review your credit history
If you have accounts at your local bank, they have visibility into your finances, which could help you get approved
Support for organizations in your area
An in-person visit may be inconvenient
The application process may be cumbersome and require substantial manual input
May require credit union membership
Prosper. "Personal Loans Rates and Fees," Accessed Dec. 4, 2019.
Upstart. "Personal Loans," Accessed Dec. 4, 2019.
Upstart. "What Fees am I Charged?" Accessed Dec. 4, 2019.
LendingClub. "Personal Loan Rates and Fees," Accessed Dec. 4, 2019.
SoFi. "Compare Rates and Terms," Accessed Dec. 4, 2019.
Marcus: By Goldman Sachs. "We're Offering Personal Loans With No Fees. Ever." Accessed Dec. 4, 2019.