Can I Get a Personal Loan With Fair Credit?

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Personal loans can help meet a variety of financial needs. One of the most common myths about personal loans is that you need perfect credit to qualify for one. 

In reality, getting approved for personal loans is possible for people with excellent credit scores, poor credit scores and everything in-between. So if you’re wondering, can I get a personal loan with fair credit? the answer is yes. 

But there are some things that are helpful to know first. If you’re interested in getting a personal loan with fair credit, here’s a closer look at how it works. 

What Is a Fair Credit Score?

Credit scores measure how well you manage your financial life. These scores operate on a range and the higher your scores are, the better when applying for personal loans or other lines of credit. 

Both FICO credit scores and VantageScores range from 300 at the low end to 850 at the high end. So what is a fair credit score for either one?

With FICO scores, it’s generally a score between 580 and 669. For VantageScores, fair credit typically means anything between 600 and 660. This reflects some subtle differences in how FICO credit scores and VantageScores are calculated. 

But it’s important to remember that some lenders may set the minimum threshold higher. For instance, they may look for a score ranging from 620 to 699 when issuing personal loans for fair credit. 

Can You Get a Personal Loan With Fair Credit?

Again, the short answer is yes, but there are some things to keep in mind. 

First, differences in what individual lenders consider to be fair credit can affect which personal loans you qualify for. For instance, if you have fair credit but your score is at the lower end of the range then you may only be eligible for smaller loans. 

Where you lie on the fair credit spectrum can also influence your personal loan terms, including:

  • Interest rates
  • Annual percentage rate
  • Repayment terms

Asking someone to cosign for a personal loan alongside you could help you secure more favorable loan terms. A cosigner with good or excellent credit can make you more attractive to lenders. Just remember that if you default on the loan for any reason, both you and your cosigner may suffer the consequences when it comes to credit score damage and/or collection actions. 

How to Get a Personal Loan With Fair Credit

If you need a personal loan for debt consolidation, home improvements or any other reason and you have fair credit, there are some things you can do before applying to improve your odds of approval. 

First, start with analyzing your credit and financial picture. Specifically, consider the things a lender is most likely to look at, including:

  • Payment history
  • Credit utilization 
  • Debt-to-income (DTI) ratio 

Paying bills on time and keeping balances low on credit cards can work in your favor when getting approved for personal loans with fair credit. Lenders also want to see how much of your paychecks go toward debt each month, so a lower DTI is good as well.

If you have a late payment on your credit history or you’re carrying high balances on one or more credit cards, you may want to focus on making improvements in those areas before applying for a personal loan. You can do that by:

  • Scheduling automatic bill payments or setting up due date alerts to avoid paying late
  • Doubling up on monthly credit card payments so you’re paying more than the minimum 
  • Requesting a credit limit increase which could help improve your credit utilization ratio

Once you’ve addressed what you can do to make yourself more creditworthy to a personal loan lender, the next step is shopping for the right loan. Remember, fair credit scores make it difficult to get approved for the lowest rates and best repayment terms. So it’s important to shop around. 

When comparing personal loans for fair credit, pay attention to:

  • Minimum credit score requirements
  • Debt-to-income requirements if the lender mentions them
  • Interest rates and fees
  • APR range and whether rates are fixed or variable
  • Loan repayment terms
  • Minimum and maximum loan amounts

The goal is to narrow down your personal loan options to the ones that offer the best rates for fair credit while meeting your needs for borrowing. You may consider getting prequalified or preapproved for a personal loan; this is something you can easily do online in minutes. 

The advantage of personal loan prequalification or preapproval is that it can give you an idea of what loan terms you’re most likely to qualify for. Just be sure you understand whether a soft or hard pull of your credit is involved, since a hard credit check could cost you valuable credit score points. 

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