Payday loans are offered by online and storefront lenders and come with sky-high fees and interest rates. Payday alternative loans (PALs) are not payday loans. For example, if you have a credit score of 669, what FICO considers the high end of a fair score, your average APR rate for an unsecured personal loan is going to be about 24.74% - more than double the average APR of an excellent credit score (720+).Īverage unsecured personal loan APRs by credit bandĮstimated cost for a $2,000 auto repair repaid over 36 months* While borrowers can avoid having their collateral being seized if they aren’t able to repay the loan, these types of loan may be more difficult for someone with bad or fair credit to obtain without souring APR rates. With an unsecured loan, lenders will rely more so on your creditworthiness.While your lender can seize your collateral if you stop making payments, secured loans may be more attainable for those with fair or bad credit since collateral helps offset the lender’s risk. As collateral reduces the lender’s risk, you’ll qualify more easily, and could receive lower interest rates and larger loan amounts. Collateral could include vehicles, property, bank accounts or other valuables. With a secured loan, you’ll offer up collateral to back the loan.Personal loans are generally available in amounts as low as $1,000 and may be unsecured or secured. Unlike with an auto repair shop payment plan or certain credit cards, you won’t find interest-free offers on personal loans. As they have fixed interest rates, you’ll have set payments over your repayment term, which typically lasts 12 to 60 months. Personal loans are installment loans that can be used for just about anything, including auto repair financing.
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