Why You Should Trust Us

Investopedia’s researchers spent countless hours analyzing hundreds of data points to determine the factors that mattered most for readers when choosing what company to take out a fair credit loan with. When choosing which lenders to feature on this list, Investopedia considered their fees, repayment terms, credit score requirements, and more to provide the most comprehensive and unbiased recommendations possible. Founded in 1999, Investopedia has been dedicated to finding its readers the best fair credit loan co🐠mpanies since 2020.

How Does a Personal Loan for Fair Credit Work?

A 澳洲幸运5开奖号码历史查询:personal loan for fair credit is typically unsecured, repaid in installments, and can be used for most any purpose. ꦦThis means once you receive the balance of the loan, you'll pay it back, with interest, in installments over a predetermined period of time.

When applying for the loan, be prepared to show proof of income and identification, including your Social Security number (SSN). For proof of income, you can use copies of pay stubs. The lender will use your SSN to run a 澳洲幸运5开奖号码历史查询:credit check. You'll also need to provide bank account information where loan fun🎐ds can be deposited. Origination fees and your interest rate are negotiable, but if you have fair credit, you may have a harder time getting lower fees or rates.

When repaying your loan, you can sometimes receive a discounted rate if you agree to have monthly payments 澳洲幸运5开奖号码历史查询:automatically debited from your account. This can also help prevent late payments and the additional fees that come🐟 with them.

Who Should Con🔯side✨r a Personal Loan for Fair Credit?

Debt consolidation is one of the most popular reasons for a personal loan. If your credit is only fair, then you may have a lot of debt with high interest rates, in which case 澳洲幸运5开奖号码历史查询:debt consolidation would be worth considering. By combining multiple debts into one payment, they'd be easier to manage and less of a burden on your 澳洲幸运5开奖号码历史查询:monthly budget.

Other reasons to consider a personal loan despite fair credit might be unexpected bills that cannot be avoided. Examples include medical bills, tax bills𒊎, or moving expenses.

Common Personal Loan Terms to Understand

If you have fair credit and are shopping for a personal loan, it's important to be familiar with these key terms:

• Credit score: A 澳洲幸运5开奖号码历史查询:credit score is based on your credit history and is one way lenders measure your creditworthiness. The most common score is the FICO score, which ranges from 300 to 850. Scores ranging from 580–669 generally are considered fair, which means there may be some negative marks on your credit, but nothing major.
• Origination fee: Lenders sometimes charge an 澳洲幸运5开奖号码历史查询:origination fee to cover the cost of processing the loan application. The fee constitutes a percentage of the total loan amount.
• Annual percentage rate (APR): The APR for a personal loan calculates the percentage of the principal you'll be charged in interest and certain fees each year. It's calculated by multiplying the 澳洲幸运5开奖号码历史查询:periodic interest rate by the number of periods (monthly in most cases) in a year. The calculation doesn't include compounding interest but may contain some fees associated with the loan.
• Joint application: A 澳洲幸运5开奖号码历史查询:co-applicant can help with loan approval by providing lenders with an additional source of income and perhaps a better credit history to consider. Co-applicants can become co-borrowers once an application is approved, giving them equal access to funds. This is in contrast to a co-signer, who's responsible for repayment without having equal access to the funds.

Pros & Cons of Personal Loans♈ for Fair Credit

Pros Explained

• Fast access to cash: Some lenders provide access to funds as soon as the same day the application is approved.
• Direct creditor payments: If the loan is being used to consolidate debt, lenders can make direct payments to creditors.
• Longer repayment terms: Repayment can be extended for several years, depending on the lender.

Cons Explained

• Higher APRs: Having less than good credit generally means having to pay higher rates.
• Higher fees: Much like with higher APRs, lenders may be less willing to budge on high origination fees if your credit is only fair.
• Membership may be required: For credit unions on our list, you have to apply for membership, which is an extra hoop to jump through and may include an additional small fee.

Methodology

This list of the best personal loans for fair credit is based on extensive research into a group composed of 59 banks, credit unions, and other lenders. Investopedia co🧔nsidered each lender’s APR, loan amounts and terms, fees, customer experiences, and dozens of other factors. Our criteria and ratings were further informed by surveying hundreds of borrowers about their experiences with personal lenders and their opinions on the process. This research and data collection took place between July 23 to Oct. 18, 2024.

Each of the 45 criteria Investopedia evaluated were grouped into one of four categories and weighted them based on their importance to Investopedia’s readers. This data was the♚n used to develop an overall star rating for each of the 59 lenders that were considered. The four categories and their weights are:

• Loan Costs (APRs, origination and late fees, and autopay discount): 30.00%
• Borrowing Requirements (Secured loans, membership requirement, minimum credit score, and four additional factors): 24.00%
• Lender Features (Online experience, educational resources, pre-qualification, and seven additional features): 24.00%
• Loan Terms (Loan terms and amounts, funding time, and approval process): 22.00%

You can find out more about how Investopedia evaluated personal loans in 澳洲幸运5开奖号码历史查询:the complete methodology.