3 Best Personal Loans for Fair Credit Borrowers

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Updated on Monday, January 4, 2021

When determining whether to extend you a personal loan, creditors will look to your FICO Score to determine how likely you may be to repay your debt. This score is calculated on a 300 to 850-point scale using your credit history, which reveals everything from your outstanding balances to your mix of credit.

If your credit score sits between 580 and 669, you have fair credit, indicating that while you’re not the riskiest kind of borrower, you may have past blemishes or a limited history of credit usage.

Fair credit could prevent you from securing the lowest offered interest rates. But that doesn’t mean you shouldn’t consider your options. Here’s our choice for the best personal loans for fair credit among our partners, as well as what to consider before you apply.

3 best personal loans for fair credit




Credit Req.


Minimum Credit Score


24 and 60


Origination Fee

Up to 5.00%


on LendingTree’s secure website

Lender Disclosure

Payoff is a financial services firm that offers personal loans mainly to help consolidate credit card debt.... Read More

All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

If you’ve got outstanding balances on one or more credit cards, Payoff may be worth looking into. The lender offers a credit card consolidation loan, which allows you to combine multiple credit card debts into a single loan with just one bill to manage. But Payoff doesn’t offer general use personal loans, meaning you’ll need to look elsewhere if you want financing for a home repair, emergency medical procedure or other purpose.

Using Payoff, you can take out personal loans between $5,000 and $40,000, which must be paid off between 24 and 60 months. The maximum offered APR is the lowest among the three options here. Though fair credit borrowers can expect a higher APR, if your Payoff personal loan offers a lower APR than your credit cards, then consolidating can make sense.

While Payoff charges an origination fee, it doesn’t charge application fees, early or extra payment fees or late fees. To qualify, you should have a minimum credit score of 600, a debt-to-income ratio of less than 50% and at least three years’ worth of good credit history and no delinquencies.

Best Egg



Credit Req.


Minimum Credit Score


36 or 60


Origination Fee

0.99% - 5.99%


on LendingTree’s secure website

Lender Disclosure

People looking for a process that is fast and straightforward can’t go wrong when applying through Best Egg for a personal loan. ... Read More

The Annual Percentage Rate (APR) is the cost of credit as a yearly rate and ranges from 5.99% to 29.99%, which may include an origination fee from 0.99% - 6.99% that is deducted from loan proceeds. Any origination fee on a loan term 4-years or longer will be at least 4.99%. The loan term and the APR offered will depend on your credit score, income, debt payment obligations, loan amount, credit usage history and other factors. Additionally, the APR offered is impacted by your loan term and may be higher than our lowest advertised rate. Requests for the highest loan amount may result in an APR higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest rate.

*Trustpilot TrustScore as of June 2020. Best Egg loans are unsecured personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. “Best Egg” is a trademark of Marlette Funding, LLC. All uses of “Best Egg” refer to “the Best Egg personal loan” and/or “Best Egg on behalf of Cross River Bank, as originator of the Best Egg personal loan,” as applicable. The term, amount and APR of any loan we offer to you will depend on your credit score, income, debt payment obligations, loan amount, credit history and other factors. Your loan agreement will contain specific terms and conditions. The timing of available funds upon loan approval may vary depending upon your bank’s policies. Loan amounts range from $2,000–$50,000. Residents of Massachusetts have a minimum loan amount of $6,500 ; New Mexico and Ohio, $5,000; and Georgia, $3,000. For a second Best Egg loan, your total existing Best Egg loan balances cannot exceed $50,000. Annual Percentage Rates (APRs) range from 5.99%–29.99%. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0.99%–6.99% of your loan amount, which will be deducted from any loan proceeds you receive. The origination fee on a loan term 4-years or longer will be at least 4.99%. Your loan term will impact your APR, which may be higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest APR.

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you.

Best Egg offers a personal loan that can be used for a variety of purposes, from debt consolidation to major purchases. In short, it’s a more flexible loan option compared to Payoff. Personal loans can be obtained for a minimum of $2,000 and maximum of $50,000.

The maximum APR of 29.99% is higher than Payoff’s, however. And to secure the lowest APRs, you’ll need a loan term under 48 months, a minimum credit score of 700 and a minimum annual income of $100,000.

To qualify for any of Best Egg’s loan, you’ll need a credit score of 640 or better, a low debt-to-income ratio and a steady source of income to prove you earn enough to repay your debts.


Borrowers who use Peerform may obtain personal loans that can be used for just about anything. But unlike the other options listed here, Peerform relies on other people opting to invest in your project in return for interest-accruing repayments. That’s because Peerform is a peer-to-peer lending platform.

After you apply, your loan inquiry is listed on Peerform’s online marketplace where investors can evaluate it and decide if they want to put up all or a share of the needed money in return for a steady, monthly return. It’s worth noting though that individual investors are not directly making these loans to you. Rather, loans are made by Cross River Bank and people can then choose to invest with Peerform in its collection of loans.

A notable downside of using a peer-to-peer lending marketplace is a potentially slower loan application process compared to your typical lender. However, eligibility requirements can be more flexible. To qualify, you’ll need a minimum credit score of 600, a debt-to-income ratio below 40%, an open bank account and a clean credit history that includes no current delinquencies or recent bankruptcies, tax liens or collections.

Your fair credit isn’t the only factor lenders consider

Having a fair credit score means lenders will be liable to deny you the best personal loan terms, notably their lowest offered interest rates. You might not be approved for the full amount or repayment term you want, either.

But credit scores aren’t the only measure of risk lenders look to when determining whether to extend a loan. They will typically consider other factors, such as:

  • Income
  • Checking account balance
  • Current savings
  • Debt-to-income ratio

That said, high earners, those with lots of money in the bank, or those with little-to-no existing debt may qualify for better loan terms than their fair credit score initially indicates.

Before you apply, ask yourself these 3 questions

Before borrowing, do the math on your personal loan. This is especially helpful once you’ve seen the terms you prequalify for among fair credit lenders.

Play around with our personal loan payment calculator by plugging in your loan amount, the APRs you’re seeing, and repayment terms. (Your APR is a great measure of what you’ll pay to borrow, as it takes your interest rates and other fees into account.) Your budget should comfortably accommodate your new loan’s monthly payment.

If you’re seeking a personal loan for an expense that can wait, that may be your best option. Personal loan interest rates can be high for fair credit borrowers, so taking the time to raise your credit score can save you a significant amount of money.

To help boost your credit, you might try such things as paying off your bills in full and on time each month and lowering your debt-to-income ratio.

If you have a family member or friend with a high credit score, it may be worth asking them to cosign on the loan in order to get more favorable repayment terms. But you should have a plan of action for repaying the debt. That’s because your cosigner is equally on the hook for the debt. If you fall behind on payments, for example, their credit will take a hit along with yours.

Alternative loan options for fair credit

Secured personal loan

If your financial situation is holding you back, a secured personal loan may be a good alternative. For lenders, you’ll be less of a risk if your loan is backed by collateral, such as a car, savings account balance or the equity in your home. That means you could get better repayment terms than with an unsecured personal loan, as well as qualify with more lenders.

But if you default, the lender can take possession of whatever asset you put on the line. Before you get a secured loan, then, make sure you can repay the debt in full. You don’t want to be caught with a defaulted debt on top of losing your car or other asset.

Payday alternative loan (PAL)

If you belong to a federal credit union, you may be able to borrow between $200 and $1,000 from the financial institution and repay it within one to six months at a maximum annual interest rate of 28%. Credit unions have also recently begun offering another of these kinds of loans, known as a PAL II, which extends the borrowing limit to $2,000 and the repayment period to 12 months.

Leaning on a credit card

If the interest rate on your credit card is close to the interest rate you’d pay on a personal loan and your credit limit is high enough, you might consider charging the expense. After all, you’ve already been approved for this line of credit and as long as you make the minimum payment, you can repay the balance over however long you need.

A credit card’s lack of structured monthly repayment terms though could lead you to pay the debt off more slowly than you would with a personal loan, though, which can skyrocket your costs.


To select the “best” personal loans for fair credit, we used MagnifyMoney’s personal loan marketplace on Jan. 23, 2020. We assumed the following:

  • Borrowers have a FICO Score of 580-669.
  • Loan amount of $5,000
  • ZIP code 11220

Lenders were chosen by A) lowest minimum APR and B) lowest minimum origination fee. Lenders who do not specify a minimum credit score requirement were not considered.