Got bad credit and a stack of debt that’s keeping you up at night? Yeah, we’ve all been there. But guess what? Debt consolidation loans for bad credit can help you wrangle those bills into one (hopefully) lower monthly payment. It’s like giving your finances a fresh start without all the sleepless nights. If your credit score isn’t exactly shining, don’t sweat it — we’ll help you find options to get back on track.
MoneyLion helps you find debt consolidation loan offers based on your background and info you provide. You can get matched with offers for up to $100,000 from top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you./cust
7 best debt consolidation loans for bad credit
Here’s the deal — finding a good debt consolidation loan with bad credit isn’t impossible, but it requires a little homework. Let’s dive into some of the best lenders for people with less-than-perfect credit.
1. Best for low minimum credit score: OneMain Financial
OneMain Financial could be a solid option for borrowers with bad credit looking for a personal loan to consolidate debt. It doesn’t have a minimum credit score requirement, making it more accessible to people who might struggle to get approved elsewhere.
| Minimum credit score: N/A | Loan amounts: $1,500 – $20,000 |
| APR range: 18.00% – 35.99% | Origination fees: Varies by state |
| Repayment terms: 2 – 5 years |
Pros:
- Low minimum credit score requirement
- Fast funding
- In-person support at branch locations
Cons:
- High APR for bad credit borrowers
- Limited loan amounts
- Origination fees depend on the state
2. Best for fast approval: Upgrade
Upgrade offers personal loans for debt consolidation with quick approval and funding — sometimes as fast as one day. It could be a great option for those who need to pay off high-interest debt quickly, though you’ll need a credit score of at least 560 to qualify.
| Minimum credit score: 560 – 600 | Loan amounts: Up to $50,000 |
| APR range: 9.99% – 35.99% | Origination fees: 1.85% to 9.99% |
| Repayment terms: 24 – 36 months |
Pros:
- Fast approval and funding
- Flexible repayment terms
- Offers free credit monitoring
Cons:
- High origination fees
- Requires a fair credit score
- Higher APRs for lower credit scores
3. Best for competitive rates: Happy Money
Happy Money specializes in helping borrowers consolidate credit card debt with competitive interest rates. It focuses on personal loans aimed at paying off high-interest debts, which means that it could be a great choice for those looking to lower their overall interest rate and monthly payments. Plus, it provides tools to help you track your progress.
| Minimum credit score: 640 | Loan amounts: $5,000 – $40,000 |
| APR range: 11.72% – 17.99% | Origination fees: N/A |
| Repayment terms: 24 to 60 months |
Pros:
- Competitive interest rates
- Direct payments to creditors for consolidation
Cons:
- Higher credit score requirement
- No option for a co-signer
- Lower loan maximum compared to other lenders
4. Best for large loan amounts: SoFi
If you have a lot of debt to consolidate, SoFi offers loans with high maximum amounts, up to $100,000. It provides competitive rates and perks like unemployment protection, but it typically requires a higher credit score.
| Minimum credit score: Varies | Loan amounts: $5,000 – $100,000 |
| APR range: 8.99 – 29.99% | Origination fees: None |
| Repayment terms: 24 – 84 months |
Pros:
- High loan limits
- No fees
- Extra member perks like career coaching
Cons:
- Higher credit score requirement
- Slower approval process
- Requires solid financial history
5. Best for flexible terms: Avant
Avant works with borrowers who have bad credit, offering flexible terms and fast funding. While the APRs are higher for lower credit scores, its flexible repayment options can make it a good choice for those needing more time to repay.
| Minimum credit score: At least 580 | Loan amounts: $2,000 – $35,000 |
| APR range: 9.95% – 35.99% | Origination fees: 0% – 9.99% |
| Repayment terms: 24 – 60 months |
Pros:
- Low credit score requirements
- Fast funding
- Flexible repayment terms
Cons:
- High APR for bad credit
- Charges an origination fee
- Lower loan limits
6. Best for high loan flexibility: LendingClub
LendingClub can be a great choice for those who need flexibility in both loan amounts and repayment terms. It offers personal loans for debt consolidation, and its peer-to-peer lending model allows for a personalized approach to funding.
| Minimum credit score: N/A | Loan amounts: Up to $40,000 |
| APR range: 6.34% to 35.89%. | Origination fees: 3% to 8% |
| Repayment terms: 24 – 60 months |
Pros:
- Flexible loan amounts
- Competitive APR for fair credit
- Joint applications available
Cons:
- Charges origination fees
- High APR for bad credit
- Funding process may take longer
7. Best for low fixed APR: Discover Personal Loans
Discover Personal Loans offers competitive fixed APRs for debt consolidation, making it easier to budget your payments without worrying about fluctuating interest rates. It also doesn’t charge origination fees, which can save you money in the long run.
| Minimum credit score: 660 – 850 | Loan amounts: $2,500 – $40,000 |
| APR range: 7.99% – 24.99% | Origination fees: None |
| Repayment terms: 36 – 84 months |
Pros:
- No origination fees
- Fixed APRs for predictable payments
- Flexible repayment terms
Cons:
- Higher credit score required
- Loan amounts are capped at $35,000
- Longer approval process
What is a debt consolidation loan for bad credit?
A debt consolidation loan for bad credit allows you to roll multiple debts into one loan, making it easier to manage payments. Instead of juggling credit card bills, medical debt, or personal loans with high interest rates, you’ll have just one loan with a set interest rate and monthly payment. This can help reduce your stress (and possibly your interest rate, too), even if your credit score isn’t stellar.
Pros and cons of a debt consolidation loan for bad credit
Debt consolidation loans can be lifesavers, but they’re not without their downsides. Let’s break down the pros and cons.
| Pros: • You may lower your interest rate, which saves money in the long run. • Consolidating your debt makes budgeting easier since you’ll only have one payment to worry about. • You can reduce the amount of time you spend managing multiple payments each month. | Cons: • You may not qualify for the lowest interest rates if your credit is poor. • Some lenders charge origination fees or other costs that can add up quickly. • If you don’t change your spending habits, you could find yourself in even more debt. |
How to get a debt consolidation loan with bad credit
Getting a debt consolidation loan when your credit score isn’t great can feel like a challenge, but it’s doable with the right plan. Here’s how:
- Check your credit report: Look for inaccuracies that could be hurting your score and dispute errors you find.
- Research and compare lenders: Different lenders offer different loan terms, interest rates, and fees. Make sure to shop around.
- Explore secured loans: If you can’t qualify for an unsecured loan, consider a secured loan, which uses collateral like your car or home.
- Consider a co-signer: A co-signer with better credit can help you get approved for a loan with more favorable terms.
- Prepare a solid budget: Show lenders you can repay the loan by outlining a realistic repayment plan.
- Complete the application: Once you’ve done your homework, fill out the application online or in person, depending on the lender.
Alternatives to consolidating debt with bad credit
Not feeling the debt consolidation route? You’ve got other options. Here are some alternatives to consider.
- Home equity loan: Use the equity in your home to secure a lower interest rate on a loan.
- 401(k) loan: Borrow against your retirement savings to pay off debt — but proceed with caution.
- Credit counseling: Get advice from a credit counselor who can help you manage your debt more effectively.
- Peer-to-peer lending: Borrow from individuals or investors through peer-to-peer lending platforms, which may offer more flexible terms.
- Balance transfer credit card: Transfer your high-interest credit card debt to a card with a lower interest rate.
Take Control of Your Debt
Debt consolidation loans for bad credit can help you simplify your finances and get back on track, but they’re not without risks. Make sure you fully understand the terms, compare your options, and only borrow what you can afford to repay. And remember, there are alternatives if a traditional loan doesn’t seem like the right fit.
FAQ
Can you get a consolidation loan with bad credit?
Yes, some lenders specialize in offering consolidation loans to borrowers with bad credit, although the terms may not be as favorable.
What credit score is needed for a debt consolidation loan?
Most lenders require a credit score of at least 580, but some may approve lower scores with higher interest rates or collateral.
Do consolidation loans hurt your credit?
Consolidation loans can initially cause a small dip in your credit score due to the credit inquiry, but over time, managing a single loan responsibly can improve your credit.
Do banks offer debt consolidation?
Yes, many banks offer debt consolidation loans, but they typically require higher credit scores and more stringent qualifications.
Is it hard to get a debt consolidation loan?
It can be challenging to get a debt consolidation loan with bad credit, but you can find lenders that specialize in working with borrowers in this situation.
