Best personal loans for fair credit in May 2021

How much will a personal loan cost?

As with most credit products, the rate you receive on a personal loan depends a lot on your credit score. Borrowers with fair or average credit will pay a higher rate – somewhere above 20% – than those with good credit. The interest rate also affects your total monthly payment, as does the length of the term; a longer term means lower monthly payments, but more interest.

Use our personal loan calculator to estimate your monthly payments based on your credit score. Here is what personal loan rates look like on average:

28.7% (lower scores are unlikely to qualify.)

Source: Average rates are based on aggregated and anonymized supply data from users who prequalified in the NerdWallet lender market between January 1, 2020 and December 31, 2020. Rates are estimates only and are not specific to any lender.

How To Qualify For Equitable Loans

Focus on your credit score. Even though lenders look at other factors, your credit score is a key factor. Build your credit may mean better chances of qualifying and getting a lower rate.

Add a co-applicant or co-signer to your application. Co-signing comes with risks, but it’s an option that can help you qualify for a loan that you couldn’t get on your own due to fair credit or low income. Online lenders and banks offer joint and co-signed loans.

Think of a credit union. Credit unions tend to know their members and financial history and may offer lower rates and more flexible terms to borrowers with average credit. Federal credit unions cap interest rates at 18%.

Pre-qualify with multiple lenders. Many online lenders allow you to pre-qualify to see the rates and terms you might receive. This usually involves a flexible credit check, which does not affect your credit score and allows you to compare rates and terms.

Pre-qualify for a personal loan

Most online lenders will give you an overview of the rates and terms you might receive by performing a software check on your credit. It will not affect your credit score so it pays to take the steps to pre-qualify for a loan with several lenders and compare the rates and characteristics of the loan. You can prequalification on NerdWallet and see the rates of lenders who partner with us.

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