Best Personal Loans for Fair or Average Credit of April 2023

A fair or average credit score ranges from 580 to 669. If that's where your credit score currently stands and you're looking for a personal loan, you've come to the right place. Whether you're looking to make home repairs or pay off medical bills, a personal loan can help you accomplish your goal. But first, you'll need to find a loan that meets your needs. The following lenders offer some of the best personal loans for borrowers with credit scores between 580 and 669.

A fair credit score is generally in the 580-669 range.

FICO® Scores are the most commonly used credit scores. These scores range from 300 to 850, with higher scores being better. There's no official cutoff point that determines what is considered good credit, fair credit, poor credit, and so on, but FICO does offer some guidelines:

We'll use FICO's definition and say you have fair credit if your FICO® Score is in the 580-669 range. That means if your credit score is 600, you have fair credit. The above best personal loans for fair credit are a great place to start looking for a personal loan if your credit score falls in this range.

If your credit score is well under 600, then you may want to consider some of the best personal loans for bad credit instead. A bad credit loan can also help you raise your credit score. If you make your monthly payments on-time, you can eventually qualify for a fair credit loan.

If you aren't sure what your credit score is, there are several websites where you can check it before applying for a personal loan. You may be able to access a free FICO® Score through certain credit card issuers if you're a cardholder. My personal favorite (although it isn't free) is myFICO, which is run by the Fair Isaac Corporation -- the creator of the FICO® Score. I've been a customer for well over a decade and love the comprehensive score reports and tools I have access to.

When you're looking for the best personal loans for fair credit, make sure you shop around. Find out which lender offers an interest rate and loan term that works for you. You can also compare loan amounts between different personal loan lenders.

There are four important parts of a loan offer every borrower should compare before agreeing to work with a personal loan lender:

Loan amounts offered

How much do you need to borrow? Some lenders specialize in larger loans, while others offer small or mid-range loans. Knowing how much you need to borrow ahead of time can help you narrow down your list of lenders.

Interest rate and other fees

The interest rate is the fee your lender charges you for the service of lending you money. In general, it's good to look for low-interest personal loans.

An origination fee is something you pay the lender for the service of processing your loan application and funding your loan. A prepayment penalty is a fee you'll pay if you pay off your loan before the loan term ends. The best personal loans for fair credit won't have these fees, or will not charge much for these services.

When you're comparing loans, look at each loan's annual percentage rate (APR). The APR combines interest with other fees to give you the true, total cost of getting a loan.

Repayment term

If you repay your fair credit loan over a long period of time, your monthly payments will be lower. However, you'll end up paying more in interest over the life of the loan. If you instead get a loan with a short repayment term, you'll have a higher monthly payment -- but you'll pay less in interest long-term.

Missing loan payments can hurt your credit score, so it's important to pick a loan term and monthly payment that fits your budget. But if you can repay the loan quickly, you'll save yourself hundreds (or thousands) in cash by the time the loan term is up.

Before you look at loans, look at your budget. What sort of loan payments can you afford? This will help you narrow down possible loans to ones you can afford. For example, if you need to borrow a large amount, but you can't afford much in repayments, you might want to stretch out repayment over several years. If you can afford bigger payments, you might want a shorter loan term.

Secured or unsecured loan

Also notice whether the loan you're interested in is a secured personal loan or unsecured personal loan. If you're approved for a secured personal loan, you'll need to provide collateral (like a savings account). The lender can take this collateral if you don't make payments.

What's the best way to find a fair credit personal loan? Get pre-qualified with many different personal loan lenders.

Pre-qualification doesn't hurt your credit score, and isn't a commitment to work with one specific lender. Pre-qualification is an opportunity for lenders to look at your credit history and offer you personalized fair credit loan offers.

Here are 3 steps on how to get pre-qualified for a personal loan with fair credit:

1. Start the lender's pre-qualification process by giving the lender some basic information.
2. Wait for the lender to look into your financial history.
3. Find out the types of loans you'll probably qualify for with that lender.

The loan term and interest rate you're offered will differ from one fair credit lender to the next. If you really want to find the best personal loans for fair credit, you'll need to look at more than one loan option. Every time you're pre-qualified for a fair credit loan, you can add another loan offer to your list.

There are a few things you can do to give yourself a leg up on your loan application.

Ways to increase your chances of qualifying for a personal loan with fair credit include:

• Increase your credit score. Two ways to quickly improve your credit score: check your credit reports for mistakes and pay down debt. Methods that take a bit longer include making on-time payments, avoiding applying for new credit, and consolidating debt. Check out our list of the Best Credit Cards For Bad Credit.
• Consider getting a cosigner. If your credit score or income is low, you might have trouble getting approved for a loan. A cosigner improves your chances of getting approved.
• Shop around. If your application is denied once or twice, don't get discouraged. Get pre-qualified with several lenders to increase your chances of getting approved. If you're having a lot of trouble, you can also look at personal loans for bad credit -- it might be easier for you to get approved for a bad credit loan.

Once you're ready to apply for a personal loan, follow these steps to get a loan:

1. Submit your loan application. You'll need to provide some personal details, like your Social Security number, income information, and address.
2. Wait for a decision. How long it takes to get a loan depends on the lender -- and, sometimes, the borrower. Sometimes, you'll hear back same-day or in one day. Other times, you may need to wait a couple days to hear back.
3. Agree to the loan terms. Make sure the loan terms meet your needs. Then, formally agree to pay back the loan according to the terms.
4. Receive loan funds. At this point, your lender will give you the loan funds.

If your loan application is denied, don't give up hope. Check our guide on how to get approved for a personal loan to find out the best next steps for your situation.