Individuals often turn to personal loans when they need help paying off existing debt or saving up for a major purchase. Most online payday loans don't demand collateral and feature quick application processes and deposit times.
However, qualifications may be challenging without an excellent credit history. If you have a stellar credit history, either because of past financial difficulties or a lack thereof, your possibilities for obtaining a loan will be unrestricted. Although securing a personal loan with fair credit may seem impossible, several lenders exist.
In certain cases, you can use a co-signer or co-applicant to improve your chances of approval. We researched and identified the best personal loan providers willing to work with clients with less-than-perfect credit and lower credit scores.
Should You Obtain a Personal Loan with Fair Credit?
There are a few things to consider if you have fair credit and are considering getting a personal loan. Think carefully about why you feel you need a loan, how fast you can pay it back, how much you can afford, and whether or not you even qualify for one.
Loan Purpose
If you need money for an unexpected expenditure or want to consolidate your debt into one manageable monthly payment, a personal loan may be the way to go. Considering you'll be paying off the loan in full at the end of the payback period and often getting a lower rate, it's better than using a credit card for these purchases.
Loan Repayment Speed
You should only use a credit card to pay for a cost if you are confident that you will be able to pay off the balance quickly. However, a personal loan is preferable if you need additional repayment time.
Your Budget
One of the most crucial steps when applying for a loan is determining whether or not you will be able to repay it. The ability to repay a loan and qualify for one are two different things. Before signing on the dotted line, calculate the monthly amount and be sure you can afford it.
Loan Eligibility
You may find the process difficult if you're trying to get a loan and have acceptable credit but ongoing delinquencies. You should settle any outstanding debts to increase your chances of getting a loan. Applying with a co-signer is an option if you still need to meet the requirements independently.
The Best Bad-Credit Personal Loan Providers
Personal loans for people with fair credit should be compared based on their eligibility requirements, interest rates, repayment schedules, and financing times.
Qualifications
Personal loan requirements are especially relevant for those with fair credit, as financing might be challenging. Most loan providers will look at more than just your credit score when deciding whether or not to provide you with a loan. To increase your chances of approval, verify your income, check your credit report, and avoid having any accounts that are past due.
APR
When evaluating loan options, always look at the annual percentage rate (APR) instead of the interest rate. The annual percentage rate differs from the interest rate because it also factors any fees associated with the loan.
Common examples of origination costs typically reflected in the APR include those charged by various lenders. The impact of these fees is accounted for when comparing APRs across loans.
Payment Schedule
Check to see if the lender you're considering has the length of payback term you need. Many financial institutions only allow for payback periods of 36 or 60 months. Loan terms typically range from 12 to 180 months, but you may be able to locate a lender that will give you more or less time if you need it.
Cost-Effectiveness of Funding
Look for a lender who can fund your account in a few days if you need money immediately. After getting approved for a personal loan, many top lenders can deposit your funds as soon as the following business day.
Can Someone With Average Credit Get a Personal Loan?
If you have fair credit, getting a loan will depend heavily on the reasons for your low score. If your credit score is low because of unpaid bills, paying them on time should raise it. A higher credit score may also arise from being consistently on time with future payments.
If your credit is only fair and not due to current delinquency, this may not be as much of a problem. Your medical collections have been on file for a while, and you have multiple overdue credit card amounts.
