Earning perfect credit is no easy feat. In fact, the average American has a credit score of 714, which is nowhere near the perfect 850, according to Experian. But having fair credit — a FICO score between 580 and 669 — doesn’t mean securing a loan is impossible. Rather, it just takes some extra steps to ensure you still sign off on a loan with competitive rates and terms.

Steps to qualify for a fair credit loan

Lenders — particularly online ones — still offer a competitive rate to those with credit scores of 600 and up. When beginning your journey to find a fair credit loan, consider the following tips to get the best possible loan for your needs and creditworthiness.

Use a cosigner

Adding a cosigner increases your likelihood of approval, as the individual’s credit score and financials are taken into account when applying for a loan. Additionally, you’re more likely to secure a better interest rate.

When looking for a cosigner, it is best to add someone with a strong credit score of 700 and over, and that has a close relationship with you. Cosigning a loan comes with some risks on their end, as they’re assuming repayment responsibility should you default on the loan.

Prequalify with one or multiple lenders

By prequalifying, you can confirm your chances of loan approval without the drop that a hard credit pull would cause to your score when formally applying.

Prequalification is also one of the easiest ways to get a firm grasp on how much your loan will cost you, as it will show you the interest rates, terms and fees a lender may charge you with your current credit score.

What’s the difference between prequalification and preapproval?

Preapproval is a more in-depth process where the lender likely does a hard credit pull. This is usually associated with buying property, whereas prequalification is a simpler process that just provides an idea of your monthly payment on a personal loan.

Pay down current debt — especially credit cards

Similar to your credit score, your debt-to-income ratio serves as a measure of your ability to pay off a loan. This figure, expressed as a percentage, shows the lender how much of your monthly gross income is compromised by your debts. If you aren’t in a time crunch, paying down your debt prior to a loan application will make you much more appealing to lenders. Make use of a debt-to-income calculator to determine where your DTI currently sits.

Credit cards are especially important to pay down and keep down. Revolving credit, especially ones that you use heavily and carry a balance with, can hurt your ability to qualify when your credit is on the fair end of the spectrum.

Explore loans from a local bank or credit union

If you have a history with a local bank or credit union it is likely that these institutions will offer more lenient rates to borrowers they trust. Even if your credit is less than perfect, your personal relationship with the bank could work in your favor.

Research peer-to-peer lenders

Peer-to-peer lenders are online companies that match borrowers with individual investors who are willing to lend them money based on a specific criteria. While peer-to-peer loans may carry higher interest rates than those offered by banks and credit unions, they tend to have more flexible credit requirements. Some even look at other factors, such as your job history and education to approve you for the loan.

Alternatives to a fair credit loan

If you are struggling to qualify for a personal loan, consider these alternatives:

• Low APR credit card balance transfer. One way to consolidate debt is with a 0 percent APR credit card. In this case, you simply move your card balance to ensure that interest doesn’t add up and in turn have a period — usually 12 months — to pay down your debt.

• Home equity loan or line of credit. Homeowners can dip into cash found in the equity of their homes with a home equity loan or a home equity line of credit (HELOC). But since you use the property as collateral, missed payments can result in home foreclosure.

• Paycheck advance. If you have an emergency expense, an advance on your next check may be useful. Just be careful — you’ll be short that money when your next check rolls around, so you’ll need to budget accordingly.

Getting a loan with fair credit takes patience

While it can be more challenging to secure a competitive rate as a fair credit borrower, it is still doable. Consider starting your journey at a local bank or credit union or working to pay down debt ahead of your application to ensure the best rates and terms.