Getting the Best Personal Loans for Fair Credit in 2024
Personal loans allow borrowing money for any legal purpose without collateral. Approval decisions emphasize credit histories over specific loan usage. While excellent scores access the lowest rates, even applicants with fair scores between 650-699 can qualify for affordable financing.
As we enter 2024, higher inflation and interest rate hikes may impact available offers. So what are the best personal loans for fair credit borrowers this year and beyond?
I’ll compare top options citing rates, fees, and lender reputations. You’ll also learn how to strengthen applications, watch for predatory terms, and supplement with alternative funding sources.
Let’s review personal loan fundamentals first.
Personal Loan Basics
Before outlining the best 2024 options for fair credit, let’s define essential concepts:
Purpose
Personal loans provide financing for almost any legal personal reason without requiring collateral like homes or vehicles offered on mortgages/auto loans.
Funding uses span:
- Credit card refinancing
- Medical bills
- Home renovations
- Debt consolidation
- Weddings
- Moving expenses
Virtually any lawful expense except business/commercial needs qualifies.
Term Lengths
Borrowers select repayment terms, typically 2 to 5 years. Short durations mean faster payoff but higher monthly payments. Longer terms create lower installments with greater total interest costs over time.
Strike a balance between affordable payments today and minimizing total interest expenses.
Unsecured Structure
Personal loans don’t require specific property like houses or cars to secure funding. This defines them as “unsecured debt”, carrying higher risk for lenders.
To compensate, interest rates run higher than “secured” loans tied to collateral.
Eligibility Factors
Lenders emphasize applicant credit scores/reports far more than income or employment status. Higher scores signal reliability to repay debts, hence locking better rates. Fair credit still qualifies, albeit with narrower options.
Now that we’ve aligned on definitions, next we’ll rank the top contenders for borrowers with fair 650-699 credit.
Best Personal Loans for Fair Credit Scores
I recommend the following lenders as prime candidates for borrowers with fair credit based on positive reputations and reasonable rates:
1. Upgrade
- Fixed Rates: 6.99% – 35.97%
- Terms: 2 – 7 years
- Loan amounts: $1,000 – $50,000
Upgrade accommodates fair credit applicants with increased approval likelihood by considering education/employment too. Customers praise their customer service and transparency.
Quick online processes make Upgrade loans convenient. Interest rates depend on income as well as credit factors to create an affordable structure.
2. LendingClub
- Rates: 8.49% – 35.89%
- Terms: 3 – 5 years
- Loan amounts: $1,000 – $40,000
LendingClub offers among the largest personal loan networks as one of the biggest fintech lending platforms. The prime elements are no early repayment fees and multiple term options for fair credit consumers.
Simple qualification criteria plus highly rated support teams position them as a preferred choice.
3. Mariner Finance
- Rates: 7.99% – 29.99%
- Terms: 2 – 6 years
- Loan amounts: $2,000 – $25,000
This regional lender operates physical branches across several US states allowing in-person applications. Consumers with shorter credit history benefit from their moderate eligibility standards.
Closing loans locally and personalized advisors justify higher borrowing costs. For fair credit buyers valuing brick-and-mortar interactions, Mariner delivers.
4. OneMain Financial
- Rates: 18.00% – 35.99%
- Terms: 2 – 5 years
- Loan amounts: $1,500 – $30,000
OneMain welcomes applicants looking to rebuild credit after past issues. They achieve this via customized loan structures and terms tailored to specific borrower profiles including fair credit segments.
High touch underwriting and advisory interactions improve approvals chances despite credit drags. OneMain makes loan processes smooth for fair score consumers.
What is Considered a Fair Credit Score?
Now you may wonder, what exactly equates to having a “fair” credit score? Generally, apps with the following credit are deemed fair:
- FICO Scores – 650 to 699
- VantageScores – 601 to 660
So focus on checking reports from both systems to confirm your numbers fall within those ranges. Boost scores above 700 to access a larger field of top lenders and interest savings.
With more context on fair credit loans, let’s now detail the loan selection process.
How to Find The Best Loan Offer
Follow a methodical 4 step process when seeking top notch fair credit personal loan offers:
Check Rates Across Multiple Lenders
- Research national lenders like Prosper, Avant and BestEgg
- Check regional player rates like Mariner that operate locally
- Review peer-to-peer lending marketplaces
Cast a wide initial net to discover the most attractive terms.
Compare Total Costs
Look beyond surface level rates to incorporate fees into cost calculations:
- Origination fees
- Late fees
- Early payoff penalties
Tally the total value you’ll repay including principal, total interest and all baked-in fees for accurate comparisons.
Evaluate Customer Satisfaction
Scan reputable review sites to measure lender service quality based on:
- Transparent processes
- Responsiveness
- Overall customer experiences
This signals how smooth their application and borrowing journeys may be.
Read All Terms Thoroughly
Never gloss over the fine print even for reputable companies. Ensure you understand:
- Interest calculations
- Fee triggers
- Payment structures
- Consequences of default
Clarify any areas of confusion with support staff before signing. Educate yourself on obligations.
Preparation and prudence deliver the best personal lending matches. Apply with multiple lenders to access the most competitive offer after careful comparisons.
Now let’s address two vital related topics – improving credit standing for better rates plus alternatives if loans remain out of reach.
How Can I Improve My Credit?
For consumers with low-end fair credit, boosting your score opens additional and cheaper borrowing options. Consider these techniques:
Pay Down Balances
High revolving credit usage severely drags scores. Pay off cards and other debts aggressively to lower this ratio.
Correct Errors
Dispute and fix misreported entries or outdated items still lingering on your history. This lifts scores quicker.
Increase Credit Age
Keep longstanding accounts open instead of closing them. Lengthier positive histories improve scores.
Diversify Credit Types
Use secured cards, credit builder loans or reporting subscriptions to demonstrate responsible usage across more account types over time.
Be strategic if aiming for a large imminent purchase requiring financing. Building scores above 700 makes a noteworthy difference in loan qualifications and pricing.
What If I Don’t Qualify For Personal Loans?
If poor credit excludes you from affordable personal lending options, consider these alternative sources for accessing money:
401(k) Loans
Borrow against your retirement savings without credit checks. Downsides include losing market gains and penalties if losing your job.
Liquidate Investments
Cashing out stocks/funds generates money instantly albeit with taxes/loss of upside. Use this only for essential purposes.
HELOC Loans
Home equity lines of credit require homeownership but offer lower rates tied to property. Risks include foreclosure if defaulting.
Pledge Collateral Loans
Pawn shops or secured loan providers accept valuable items like jewelry as collateral for urgent funding needs. Be cautious about unfavorable terms or forfeiting cherished assets.
Crowdfunding
Campaigns on GoFundMe describe financial challenges for mobilizing charitable donations. Results vary wildly based on visibility and cause resonance.
Think very carefully before pledging collateral assets or tying into retirement funds. Compare peer-to-peer borrowing networks as well. And exhaust government/nonprofit assistance first if undergoing hardships.
If alternatives remain unworkable, speak to financial counsellors about crafting achievable long term credit rebuilding plans. Patience and diligence still enable access to affordable future financing.
Let’s wrap up with some frequently asked questions.
FAQs on Fair Credit Personal Loans
What credit score is considered fair?
Fair credit encompasses scores between 650 to 699 on the FICO model and 601 to 660 on VantageScore. Lenders designate this moderate risk segment accordingly compared to good (700+) or bad credit.
When would fair credit borrowers get rejected for personal loans?
Incomes below $20,000 despite fair scores, outstanding recent bankruptcies or foreclosures, high existing debt-to-income levels above 50%, or unverifiable details lead rejections. Having insufficient income to service more debt or negative major events decrease approvals.
Should I accept pre-approvals or shop around?
Pre-screened pre-approved offers seem quick and convenient but may not offer the best rates. Always compare against 2-3 additional lenders during a short shopping window which minimizes credit score impacts. Leverage multiple options.
When would taking a personal loan be inadvisable financially?
If used for discretionary purchases just for temporary wants which add financial burdens long term, personal loans carry risks. Similarly, repaying other lower-cost debts like student loans or mortgages with high-interest personal loans worsens net financial health. Avoid if disciplined alternative funding exists.
How quickly can I access money once approved?
Online lenders provide funding in under 1 week as long as documentation and contracts get completed promptly. Brick-and-mortar closings may take several weeks instead for physical paperwork and underwriting. Ask about expected timelines when applying.
Conclusion
Finding the best personal loan with a fair 650-699 credit score requires researching multiple lenders for optimal terms and fees based on your specific situation. Favor those offering clear rates and positive customer satisfaction – characteristics of top financial partners.
Increase your score further before applying and understand risks plus other funding alternatives. But used judiciously, personal loans offer reasonable financing to applicants with moderate credit levels too.
Let me know if you have any other questions on qualifying for loans and boosting your borrowing standing over time!
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