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You can find personal loans for fair credit with some online lenders, local banks and credit unions. These lenders may allow you to prequalify without a hard credit inquiry or offer unsecured personal loans instead of secured ones (which require collateral like property, money or an auto title).
Prior to applying for a loan, it’s important to evaluate your budget and compare rates.
1. LendingClub
With a loan amount of up to $40,000, LendingClub is an bad credit car loans excellent personal loans for fair credit reddit option for those who need help paying off high-interest debt. Borrowers can choose to have their loan funds automatically deposited into their bank account or paid directly to their creditors. The lender’s online application is easy to use and doesn’t impact their credit score. Upon officially being approved, they’ll sign a contract that will outline the terms of their personal loan.
LendingClub is one of the largest lending marketplaces and has been in business since 2007. Borrowers can apply for a personal loan with a starting credit score of 600, which falls into the fair range for most lenders. It’s also one of few lenders that allows borrowers to apply with a co-borrower or make direct payments to creditors, which can be useful for those who need a personal loan to pay off credit card debt.
A major drawback of a personal loan from LendingClub is that the lender can charge an origination fee that ranges from 3% to 8%. However, it’s still much cheaper than many of the alternatives available to borrowers with poor credit. Additionally, borrowers can pre-qualify online to check their potential rate, loan amount, repayment term and monthly payment without a hard credit inquiry. The borrower can then choose their preferred repayment date and change it during their repayment period if they need to.
2. Achieve
Achieve has a very competitive personal loan for fair credit reddit, offering lower rates than many of its peers and a low minimum credit score requirement. Additionally, the lender offers a variety of benefits to borrowers, including direct payment to creditors for debt consolidation loans and a dedicated loan consultant for each application.
The lender requires that borrowers submit a few basic pieces of information to pre-qualify, such as their name, income and address. If you meet these requirements, Achieve will run a soft credit check that won’t impact your score. Once approved, borrowers can use the funds to pay off existing debt or cover various expenses.
Borrowers can also choose to apply with a co-borrower to increase their chances of approval. Co-borrowers must have a high enough credit score to qualify, however. And borrowers should be aware of Achieve’s origination fee, which is a one-time administrative charge that ranges from 1.99% to 6.99% of the borrowed amount.
Achieve isn’t the only lender to offer personal loans for fair credit, but it does have a decent reputation and high level of transparency. Its customer service representatives are available on weekends and can answer questions about the application process. Additionally, borrowers can check their rate without impacting their credit by visiting the Achieve website. And if you don’t meet Achieve’s criteria, the lender will provide a list of alternatives.
3. Credit Karma
Credit Karma provides a variety of personal finance tools and services that help consumers manage their financial health. The company offers free access to TransUnion and Equifax credit scores, as well as a wide range of other features like debt management and tax preparation assistance. It also operates a number of other consumer-facing brands, such as the online budget planner Mint. Credit Karma was founded in 2007 and became part of the Intuit family in 2020.
CreditKarma’s best feature is its monitoring service that keeps you informed of changes to your credit report and score. They are one of the few services that offer free reports from both major credit bureaus, which gives you a better idea of your overall creditworthiness. However, be aware that their credit scores are based on the VantageScore model, which is not the same as the FICO score lenders use. CK’s scores are more accurate than the ‘preapproved’ offers you get from banks, but they are still not real credit scores used by lenders (as much as Velveeta isn’t cheese).
The site also has a tool that lets you see your “Approval Odds” before applying for a loan or card, which can help you avoid the hassle of a hard inquiry and potential impact on your credit score. The website also has a variety of calculators that can help you evaluate your borrowing options.
4. SoFi
Founded as a student loan provider, SoFi offers an array of financial products that cater to a clientele of tech-savvy individuals. Its banking, credit card, lending, investing and insurance solutions allow customers to meet their money goals and achieve financial independence.
Whether you’re looking for a personal loan for fair credit or a refinance loan, SoFi’s rates are competitive and its application process is easy to navigate. SoFi accepts applications online and by phone, and typically reviews applications within a few days after submission. Upon approval, funds are available as soon as the next business day.
To apply for a SoFi personal loan, borrowers will need to pre-qualify and provide some basic information like their Social Security number, income, address, and employment status. They can also opt to add a co-applicant, which may improve their chances of approval or qualify them for a lower rate. If they choose to move forward with a personal loan, SoFi will conduct a hard credit check during the loan application process, which can cause their credit score to drop temporarily.
SoFi’s mobile app makes it easy to manage loan payments and track progress toward your goals. On-time loan payments help build your credit, while missed payments can hurt it. If you experience a hardship, SoFi may be able to adjust your monthly payments or grant forbearance.