Personal Loans for Fair Credit Score
Most borrowers lie on, or below the average credit mark. And, let’s face it – it’s hard to get loans with a fair credit score than it is for people with excellent and good credit scores. But, that’s where personal loans for fair credit scores come in.
These loans are meant for individuals with scores lying slightly above 580. In this article, we’ll explore all about them. But first, we singled out some lenders offering personal loans for fair credit scores at the best rates. Take a look;
- REP APR
- AMOUNT
- CREDIT SCORE
Upgrade
- 6.94 - 35.97%
- $1,000 - $50,000
- 580
FreedomPlus
- 7.99 - 29.99%
- $7,500 - $40,000
- 620
Upstart
- 6.16 - 35.99%
- $1,000 - $50,000
- 580
- APR range
- Fees
- Terms
- Amounth
- Unemployment protection
Bank 1
- 6.95%–35.89%
- Up to 5% transfer fee
- 3–5 years
- $1,000–$40,000
- No
Bank 2
- 6.95%–35.89%
- Up to 5% transfer fee
- 3–5 years
- $1,000–$40,000
- No
Bank 3
- 6.95%–35.89%
- Up to 5% transfer fee
- 3–5 years
- $1,000–$40,000
- No
Table of Contents
What does it mean to have a fair credit score?
A fair credit score, according to FICO, lies between 580 and 669.
Individuals with these credit scores have a hard time finding loans with most borrowers. However, there are still lenders willing to offer them loans. Such lenders consider more than just credit scores.
They also pay fairly higher interest rates than their counterparts with excellent credit scores. This is because lenders regard them as risky borrowers to some extent.
Most borrowers with fair credit scores are relatively new with credits. They’ve also likely experienced such setbacks as late repayments in the past.
They also probably carried high credit balances through months in the past.
Apart from getting lenders to offer them loans and the high-interest rates, fair credit borrowers have to deal with the fact that they won’t get the best loan terms.
A fair credit score lies between 580 and 669.
Requirements to qualify
Like other personal loans, lenders have different criteria gauging eligibility for one to qualify for personal loans for a fair credit score.
The most basic include being a legal US resident and being aged 18 years and above.
Additionally, borrowers should have a credit score between 580 and 669. Most lenders will also likely look at your debt-to-income ratio. The lower, the better.
You’ll also need to show proof of your income. Borrowers with a stable income will more likely get approved. Lenders use this to demonstrate the ability to repay.
To boost your chances, avoid harming your credit score by first checking if the lender offers prequalification. Most fair credit score personal lenders do.
You can also do well to pay your existing loans including your credit card debt. Doing so will keep your debt-to-income ratio to a minimum hence painting a good image to potential lenders.
Alternatively, you can approach banks and credit unions. These institutions are likely to be more lenient to members, especially those with good repayment history.
What do you need to know
Here are some of the things you should keep in mind if you’re looking to take a fair credit score personal loan;
- Flexibility: Far credit score personal loans are not tied to a single-use. You can use them for debt consolidation for credit cards and other loans. you can also use them for emergency medical bills, home improvement, sponsoring your education, or to pay for a vacation.
- Interest rates: Lenders regard borrowers with fair credit scores as risky. You’ll therefore pay higher interest rates than those with good and excellent credit scores. Our listed lenders charge an APR of between 6.16 and 35.99%. the easiest way around this would be to wait before borrowing to rebuild a good credit score.
- Repayment terms: these are dictated exclusively by the lender. They’ll be set based on your income-to-debt ratio and the actual credit score. It would be, therefore, safe to be on the highest side of the fair credit score bracket. Having a low income-to-debt will also win you better terms.
Be sure to shop around for lenders with better terms before committing to one.
The prequalification procedure will show you beforehand which terms you’re open to. Qualify and take advantage of this. A formal application will likely include a hard credit check which will cost you a few points off your credit score.
Only go for a loan if it’s absolutely necessary, and you’ve exhausted other options. Remember to carefully go through the lender agreement and ensure each term works well with you.
Types of Personal Loans you can get with Fair Credit Score
Here are some personal loan products you can take with a fair credit score;
- Secured loans: these loans will require you to offer a valuable property as security. That could be your car, house, or any other property. Lenders treat these as low-risk and will easily offer you a loan even with a fair or poor credit score. However, they’re risky to the lender and you could lose your property should you breach the lender agreement.
- Unsecured loans: these loans don’t require any collateral backing. Instead, approval will be determined by your creditworthiness. The same will also dictate your loan terms and interest rates. A credit score of 670 will get you an unsecured loan with most lenders.
- Credit cards: these are revolving loan types you can consider frequent or one-off purchases. They often attract higher interest rates and will hardly deny you loans because of poor credit scores. In fact, they hardly publish their credit requirements making the process of finding a suitable lender hectic.
- Auto loan: You can also get car loans from different car dealers with a fair credit score. However, you’ll want to proceed with caution on this. They often carry higher interest rates.
- Mortgage: a credit of as low as 620 can get you a mortgage. Shop around for lenient mortgage lenders with lower interests and better loan terms.
How much can you borrow?
For the lenders we singled out, you can borrow from $100 to $50,000.
Like we earlier noted, being on the higher side of the fair credit score bracket will unlock higher loan limits with most lenders.
Getting a co-signer with an excellent credit score will also work to your advantage. Ensure they have a steady source of income and a low income-to-debt ratio. That will, in a way, boost the lender’s confidence.
If you have a property you can offer as collateral, go for a secured loan. If it’s a property with a higher value, the lender will likely increase your loan limits.
However, how much you can borrow shouldn’t be your only concern. Ensure you borrow what you’ll be able to repay comfortably. Overlooking this could place you in a recurrent debt cycle.
If you had a co-signer, you also risk your relationship should you put them in a position to repay your loan. Further, you can also your property if you used one as collateral.
If you have a property you can offer as collateral, go for a secured loan.
Tips for Choosing a Fair Credit Lender
As you shop around for a suitable fair credit score loan lender, keep the following in mind;
- Interest rates: fair credit score personal scores don’t have the best interest rates generally. Such are often preserved for people with stellar credit scores. Look for lenders offering the lowest interest rates in the market
- Co-signers: Look for lenders allowing co-signers during loan applications. Such unlocks higher loan limits and better loan terms.
- Fees: Such fees as origination, early, and repayment fees are common with most lenders. However, while some charge them, others don’t. No-fee loans may not always be free. Some lenders make up for these costs by charging a higher APR. be on the lookout for such lenders.
- Repayment terms: A lender may offer you a longer, or shorter repayment term, depending on what you qualify for. While longer repayment terms could be flexible, they often attract higher interest rates. Shorter repayment terms, on the other hand, may stretch your budget, but often attract lower interests.
How to Boost your Fair Credit Score
If yours isn’t an emergency, you could take time to grow your credit score. While there’s no shortcut for that, the following steps will come in handy;
- Pay off your debts: Pay off your credit card balances in good time. If you have other loans, pay them down, too.
- Offset your bills on time: a single late payment could be a mark on your credit reports for a long time. Try to avoid this.
- Don’t take on new loans or credits until when it’s time to do so
- Look out for errors in your credit profile. Track down these errors and file a complaint early should find any.
Frequently Asked Questions (FAQ)
Yes. You don’t need an excellent credit score to get a loan. The lenders above will offer you a loan with a fair credit score.
Credit scores from 580 will get you a loan with most lenders. However, you’ll have limited choices.
The lenders above are some of the best fair credit score personal loan lenders.
By repaying your loans on time. You should also make timely repayments for your bills, and avoid opening additional credit card accounts.
Look out for interest rates charged, repayment terms, and fees charged.
