The best debt consolidation loans if you have bad credit

Debt consolidation can be an excellent way to get multiple debts under control and paid off quicker. It allows you to merge them into one loan with a fixed interest and a single monthly payment. This eliminates the stress of managing multiple bills and due dates and may also save you money on interest.

Unfortunately, qualifying for a debt consolidation loan with less-than-ideal credit (a score of 669 or lower) can be challenging. Just like with any type of loan, borrowers with a strong credit profile have better chances of being approved. They’re also more likely to receive more favorable terms.

It’s possible to find options without a good credit score. However, it’s crucial to pay attention to interest rates and other added costs, such as sign-up fees. You may end up with terms that will make your loan even more expensive than the debt you’re currently paying off.

To determine the best debt consolidation loan offers for bad credit, CNBC Select compared dozens of lenders by credit score requirements, interest rates, fees, repayment terms and other factors. (Read more about our methodology below.)

The best debt consolidation loans for bad credit

Best overall

Achieve® Personal Loans

  • Annual Percentage Rate (APR)

  • Loan purpose

    Debt consolidation, major purchase

  • Loan amounts

  • Terms

  • Credit needed

  • Origination fee

  • Early payoff penalty

  • Late fee

Pros

  • Open to borrowers with poor credit (minimum 620 score)
  • Can pre-qualify with a soft credit check (no hard inquiry right away)
  • Applicants can add a co-borrower
  • No early payoff fees
  • Same-day approval available
  • Funds can be sent within 24-72 hours

Cons

  • High interest rates for borrowers with less-than-ideal credit
  • Origination fee of 1.99% to 6.99% of the target amount
  • Must have a Social Security number
  • Not available in all states

Who’s this for? Achieve is an excellent debt consolidation loan option for those with imperfect credit, thanks to its flexible terms, fast approval, quick funding and relatively reasonable interest rates.

To qualify for a personal loan from Achieve, you’ll need a credit score of 620, which is considered fair. You can see whether you’re likely to be approved when you apply online: Achieve will perform a soft credit inquiry, meaning it won’t impact your score.

If you opt to proceed with your application after pre-approval, the company will do a hard credit check that might ding you a few credit points. Achieve offers same-day approvals and can then send funds within 24 to 72 hours.

If your credit leaves a lot to be desired, you’re more likely to qualify for an interest rate on the higher end of the APR range. Most debt consolidation loans for bad credit can charge interest of up to 36%, but Achieve’s highest interest rate is considerably lower.

Best for people without a credit history

Upstart Personal Loans

  • Annual Percentage Rate (APR)

  • Loan purpose

    Debt consolidation, credit card refinancing, home improvement, wedding, moving or medical

  • Loan amounts

  • Terms

  • Credit needed

    Credit score of 300 on at least one credit report (but will accept applicants whose credit history is so insufficient they don’t have a credit score)

  • Origination fee

    0% to 10% of the target amount

  • Early payoff penalty

  • Late fee

    The greater of 5% of last amount due or $15, whichever is greater

Pros

  • Open to borrowers with fair credit (minimum 300 score)
  • Will accept applicants who have insufficient credit history and don’t have a credit score
  • No early payoff fees
  • 99% of personal loan funds are sent the next business day after completing required paperwork before 5 p.m. Monday through Friday

Cons

  • High late fees
  • Origination fee of 0% to 10% of the target amount (automatically withheld from the loan before it’s delivered to you)
  • $10 fee to request paper copies of loan agreement (no fee for eSigned virtual copies)
  • Must have a Social Security number

Who’s this for? Upstart can be a solid option for those with no credit history. The company considers factors beyond your credit when evaluating your application, such as your work experience and education history.

You can borrow as little as $1,000, which also makes Upstart a good choice if you need a smaller loan.

Upstart lets you check the interest rate you’ll get before applying without any impact to your credit score. According to Upstart, 99% of personal loan funds are sent one business day after signing. Note, however, that the origination fees could get somewhat expensive, depending on the terms of your loan.

Best for flexible repayment terms

Upgrade Personal Loans

  • Annual Percentage Rate (APR)

  • Loan purpose

    Debt consolidation/refinancing, home improvement, major purchase

  • Loan amounts

  • Terms

  • Credit needed

  • Origination fee

    2.9% to 8%, deducted from loan proceeds

  • Early payoff penalty

  • Late fee

    Up to $10 (with 15-day grace period)

Pros

  • No early payoff fees
  • Loans up to $50,000
  • Fixed interest rates (no surprises)
  • Can pay creditors directly (may take up to two weeks)
  • Fast funding in as little as four days

Cons

  • Origination fee of up to 8% (deducted from your loan)
  • Not available in Washington D.C.

Why Upgrade is the best for financial literacy:

  • Free credit score simulator to help you visualize how different scenarios and actions may impact your credit
  • Charts that track your trends and credit health over time, helping you understand how certain financial choices affect your credit score
  • Ability to sign up for free credit monitoring and weekly VantageScore updates

Who’s this for? Upgrade stands out for offering plenty of loan term options, making it easier to find a repayment plan that fits your situation. Upgrade can also send funds directly to your creditors making the process simpler for you.

You can borrow as little as $1,000 and get the funds within one business day of submitting all the required documents. Available loan term lengths range from 24 months to 84 months.

The interest rates are pretty standard for this type of loan and you can check what APR you’ll get before committing to the loan.

Best for fast approval

LendingPoint Personal Loans

  • Annual Percentage Rate (APR)

  • Loan purpose

    Debt consolidation, wedding, car repair, home renovations and more

  • Loan amounts

  • Terms

  • Credit needed

  • Origination fee

    Origination or other fees from 0% to 7% may apply depending upon your state of residence

  • Early payoff penalty

  • Late fee

    Currently, LendingPoint does not charge any late fees but reserves the right to assess late fees of up to $30. Fees vary by state.

Pros

  • Fast application with same-day approval
  • Possible next-day funding (after final documents are verified/approved)
  • May approve applicants with minimum 620 credit score
  • Allows soft inquiry to prequalify
  • No early payoff fees

Cons

  • Origination fees from 0% to 6%
  • Not available in Nevada or West Virginia
  • Must have a social security number
  • No joint or co-signed loans

Who’s eligible to apply for a LendingPoint loan:

  1. You must be at least 18 years of age.
  2. You must be able to provide a U.S. federal, state or local government issued photo ID.
  3. You must have a social security number.
  4. You must have a minimum annual income of $40,000 (from employment, retirement or some other source).
  5. You must have a verifiable personal bank account in your name.
  6. You must live in one of the states where LendingPoint does business (excludes Nevada and West Virginia). 

Who’s this for? LendingPoint is worth considering if you need quick access to funds but your credit score is poor.

You can check the terms you’ll get without impacting your credit score. Once you apply, the company will let you know whether you’re approved within seconds. Then, it should take one business day to get the funds.

Note that LendingPoint has an income requirement of $35,000 and doesn’t offer loans in Nevada and West Virginia.

Best for low origination fees

Avant Personal Loans

  • Annual Percentage Rate (APR)

  • Loan purpose

    Debt consolidation, major expenses, emergency costs, home improvements

  • Loan amounts

  • Terms

  • Credit needed

  • Origination fee

  • Early payoff penalty

  • Late fee

    Up to $25 per late payment after 10-day grace period

Pros

  • Lends to applicants with scores lower than 600
  • No early payoff fees
  • Can pre-qualify with a soft credit check (no hard inquiry)
  • Quick funding (often by the next day)
  • Late payment grace period of 10 days

Cons

  • Origination fee
  • Potentially high interest (caps at 35.99% APR)
  • No autopay APR discount
  • No direct payments to creditors (for debt consolidation)
  • No co-signers

Who’s this for? Avant can be an excellent option if you’re looking to save on the upfront costs of your debt consolidation loan. While other lenders on our list charge 7% or more in origination fees, Avant will charge you 4.75% or less. If you’re borrowing a large amount of money, this can lead to significant savings.

Additionally, you can receive the money quickly. If you’re approved by 4:30 p.m. CT on a business day, you’ll receive your funds the next day. Plus, you can prequalify without affecting your credit score.

FAQs

Can I apply for debt consolidation with bad credit?

It’s possible to qualify for a debt consolidation loan with bad credit (a credit score of under 670). However, it’s important to pay attention to the terms. Interest rates on personal loans for poor credit may at times exceed APRs on credit cards, especially if you apply with a low credit score.

When that’s the case, taking out a loan to get rid of your debt might not be the best option. Instead, consider other ways to tackle your balances. For instance, you might be able to negotiate repayment terms with your current creditors. It can also be a good idea to look into credit counseling and get help creating a debt management plan.

Why can’t I get a debt consolidation loan? 

What is the downside to consolidating debt?

Debt consolidation might be an excellent debt repayment strategy but it’s not perfect for everyone.

Here are some disadvantages to consider:

  • You may end up with a higher interest rate. This is especially true if you have less-than-ideal credit. Or, even if you get a lower APR, you might still pay more in interest if you’ve picked a long loan term.
  • You may pay upfront costs. Debt consolidation loans typically charge loan origination fees which can run high if you’re dealing with a large debt.
  • You might be tempted to continue spending. Merging multiple balances into one loan may feel like a weight off your shoulders. However, if you know you have trouble living below your means or saving enough, you might fall back into your old patterns once you feel free of debt. To avoid that, be disciplined about your budget and make a point to prioritize debt repayment.

How long does it take to get approved for a debt consolidation loan?

You can expect to receive the lender’s decision within a few business days. However, many lenders might also approve you instantly. For a smooth process, make sure you provide any documentation the lender requires with your application and promptly respond to requests for more information.

Bottom line

Consolidating debt may be a difficult task if your credit score isn’t perfect. Luckily, it’s still possible to qualify for a debt consolidation loan even with a low score.

It’s important to do the math before taking out a debt consolidation loan. Check the APR before applying if the lender offers this option and factor in origination fees to determine whether a debt consolidation loan will save you money. If not, you might be better off finding a different strategy to deal with your debt.

Our methodology

To determine which debt consolidation loans are the best for consumers with bad credit, Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions.

When narrowing down and ranking the best personal loans, we focused on the following features:

  • Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
  • Flexible minimum and maximum loan amounts/terms: Each lender provides more than one financing option that you can customize based on your monthly budget and how long you need to pay back your loan.
  • No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
  • Streamlined application process: We considered whether lenders offered same-day approval decisions and a fast online application process. 
  • Customer support: Every loan on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
  • Fund disbursement: The loans on our list deliver funds promptly through either electronic wire transfer to your checking account or in the form of a paper check. Some lenders (which we noted) offer the ability to pay your creditors directly.
  • Creditor payment limits and loan sizes: The above lenders provide loans in an array of sizes, from $1,000 to $50,000. Each lender advertises its respective payment limits and loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be for such an amount.

The rates and fee structures advertised for personal loans are subject to fluctuate in accordance with the Fed rate. However, once you accept your loan agreement, a fixed-rate APR will guarantee your interest rate and monthly payment will remain consistent throughout the entire term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To take out a loan, many lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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