Compare the Best Debt Consolidation Loans for Bad Credit
Best Bad Credit Debt Consolidation Loans: A Closer Look
Best Debt Consolidation for Long Repayment Terms
Upstart
Minimum Credit Score
300
APR range
6.60% to 35.99%
Loan amounts
$1,000 to $75,000
300
6.60% to 35.99%
$1,000 to $75,000
Upstart uses a proprietary underwriting system that looks at factors beyond just your credit score to approve you for personal loans. This feature could make debt consolidation loans accessible to borrowers with below-average credit.
Why We Like It
Upstart can provide loan funding within 24 hours and can even send money directly to credit card issuers, saving you time and effort.
What We Don’t Like
Upstart doesn’t accept co-signers or co-borrowers, and origination fees can be up to 12%. Additionally, only two loan terms are available—three- or five-years.
Who It’s Best For
Upstart is an excellent option for young adults and other borrowers with limited credit history, since it reviews additional financial variables and patterns to make lending decisions.
- Low credit score requirement
- No prepayment penalties
- Low income requirement
- High origination fees
- Limited repayment terms
- Co-borrowers and co-signers not permitted
Lender details
Eligibility
- Minimum credit score: 300
- Co-signers/co-borrowers: Not accepted
Funding Speed
Next-day funding may be available if you accept a loan before 5 p.m. ET on a business day.
Best Debt Consolidation for Customer Support
Avant
Minimum Credit Score
550
APR range
9.95% to 35.99%
Loan amounts
$1,000 to $40,000
550
9.95% to 35.99%
$1,000 to $40,000
Avant was founded in 2012 to serve middle-income consumers who need to borrow money for emergencies, home improvement, debt consolidation and more.
Why We Like It
We like that Avant may provide loan funding as soon as the next business day. Avant also has accessible customer service, with support available as late as 10 p.m. CT on weekdays and 8 p.m. CT on weekends.
What We Don’t Like
Avant charges origination fees of up to 9.99%. Unlike other lenders, Avant doesn’t offer the option to pay your creditors directly.
Who It’s Best For
Avant may be a great choice for borrowers who want the option to reach their online lender by phone with questions during the week or on weekends.
- Next-day funding possible
- Low minimum credit score requirement
- Mobile app and online portal
- Administrative fee up to 9.99%
- Higher minimum and maximum APR than some competitors
- Low borrowing limit
Eligibility
- Minimum credit score: 550
- Co-applicants: Not accepted
- Direct pays third-party creditors: No
Best Debt Consolidation for Small Balances
OppLoans
Loan amounts
$500 to $5,000
APR range
160% to 195%
Minimum Credit Score
No minimum
$500 to $5,000
160% to 195%
No minimum
OppLoans positions itself as an alternative to high-cost payday loans; however, its interest rates are also high. For this lender to make financial sense for debt consolidation, the rate you obtain must be lower than what you’re currently paying on your existing debt.
Why We Like It
We love that applying for OppLoans doesn’t impact your credit score. Loans are also structured with installment payments and terms ranging from 9 to 18 months.
What We Don’t Like
Interest rates are high for this loan. In comparison, interest rates for the most competitive personal loans cap at 36% APR. Be sure to have a clear understanding of costs before borrowing.
Who It’s Best For
OppLoans is best for borrowers who want to consolidate a small debt balance that has a very high interest rate, since loan amounts cap up to $5,000.
- No prepayment penalty fees
- No credit score minimum
- No origination fee
- High interest rates
- Co-signers and co-borrowers not permitted
Details
Eligibility
- Minimum credit score. No minimum
- Minimum income. Not disclosed.
- Co-borrowers/co-signers. Not permitted
Funding Speed
If verification is complete and you get a final approval before 12 p.m. CT., you can have funding as soon as the same day.
Best Debt Consolidation Loan for Building Credit
Personify
Loan amounts
$500 to $15,000
APR range
36% to 179.50%
Minimum Credit Score
None
$500 to $15,000
36% to 179.50%
None
Personify is a lender that serves borrowers who have trouble qualifying for loans through other lenders. Personify offers loans with fixed payments, but the rates are high.
Why We Like It
We like that loan terms range from one to four years, which can provide you with an extended period to repay your debt. Active borrowers also get access to a free FICO Score, which can be a helpful tool when working to build or rebuild credit.
What We Don’t Like
Personify charges a 5% origination fee to process your loan.
Who It’s Best For
Personify loans are best for borrowers working on building or rebuilding credit because FICO Score monitoring can help you keep track of credit score growth.
- Next-day funding possible
- Free FICO Scores
- High interest rates
- Co-signers not accepted
- No direct pay to creditors
Details
Eligibility
- Minimum credit score: None
- Co-applicants: Not accepted
- Direct pays third-party creditors: No
Credit Score You Need To Get a Debt Consolidation Loan
The minimum credit score you need to get a debt consolidation loan may be as low as 300, but there’s a catch. Costs almost always increase the lower your credit score is.
Interest Rates for Bad Credit Debt Consolidation Loans
Often, debt consolidation loans are personal loans, and interest rates on personal loans for bad credit can range from 100% to a whopping 200% APR.
That’s why it’s important to review offers from multiple lenders and consider waiting to improve your credit before applying for a loan, even if you’re facing financial hardship.
Consolidating debt with a high-interest loan can make payments unmanageable, potentially exacerbating an already challenging debt problem.
Typical Debt Consolidation Loan Fees
Types of Lenders That Offer Bad Credit Loans
Borrowers may be able to find loans for bad credit at the following lenders:
- Credit unions: Credit unions may offer affordable rates to members who don’t have strong credit.
- Online lenders: Online lenders may have less stringent eligibility requirements than traditional banks. Plus, online alternative lenders may look at factors beyond just your credit—like your banking history and employment—to approve you for a loan.
How To Compare Debt Consolidation Loans
How To Get a Debt Consolidation Loan With Bad Credit
Below are ways to qualify for a loan with bad credit.
- Increase your income. Income is one of many factors besides credit that lenders consider during loan approval. If you can take on side hustles or explore alternative income streams, it may help you get approved and secure a higher loan amount.
- Shop around. Shopping with two or three lenders is the best way to compare interest rates and terms to find the most affordable loan you can qualify for.
- Apply with a co-signer or co-applicant. Some lenders allow you to apply with a co-signer or co-applicant, and applying with someone who has good credit could improve your approval odds. A co-signer is someone who promises to repay your loan if you don’t, but isn’t entitled to the funds. A co-applicant applies with you and is entitled to loan proceeds.
- Prequalify. Some lenders may allow you to prequalify with a soft credit check, which won’t affect your credit score. This way, you can get personalized loan offers and see if you qualify before agreeing to a hard credit check.
Ways Debt Consolidation Impacts Your Credit
Debt consolidations may improve your credit or hurt your credit, depending on the circumstances. Here are ways consolidation can impact your credit history.
| | |
|---|---|
| 1. Paying off credit cards with a consolidation loan could lower your credit utilization ratio and increase your score | 1. Loan applications may involve a hard credit inquiry, which may dock your score a few points |
| 2. A lower interest rate could help you pay off debt faster, and debt elimination can be good for your score | 2. Not making loan payments on a new loan can result in delinquent credit report records |
| 3. Making on-time loan payments can be positive for your payment history, which may boost your score | 3. If you continue using credit cards after using a consolidation loan, your credit usage can increase your overall debt load again |
Pros and Cons of a Debt Consolidation Loan for Bad Credit
Below are the advantages and disadvantages of taking out a debt consolidation loan when you have bad credit.
| PROS | CONS |
|---|---|
| Offers a fixed payment and set payoff schedule | Application often involves a hard credit inquiry |
| May reduce interest rate and payments | Doesn’t solve spending habits |
| May reduce your credit utilization | — |
Find the Best Balance Transfer Credit Cards Of 2025
Alternatives to Consolidating Debt With Bad Credit
A debt consolidation is just one way to manage debt with bad credit. Below are other options that could help you restructure your debt to make payments manageable.
- Debt management plans (DMPs): Nonprofit agencies may offer DMPs that provide debt coaching and a debt repayment strategy. Your counselor may also help you negotiate lower debt costs while managing your repayment process.
- Creditor payment plans or relief: You may be able to negotiate payment arrangements, interest rate reductions or payment pauses directly with your creditors. Consider contacting your credit card company or lenders to explore the options they may offer to help you manage your payments instead of consolidating your debt.
- Debt settlements: A debt settlement is the process of negotiating a lump-sum payment to eliminate a debt balance. Sometimes, creditors may accept a lesser amount to get your debt off their books if you are severely delinquent. However, note that nonpayment and settlements can be harmful to your credit score.
- Bankruptcy: If debt has become unmanageable because of your income, filing for bankruptcy may be an option. Speaking with a bankruptcy attorney is the best way to find out whether bankruptcy makes sense for you.
Methodology
We reviewed 35 popular lenders based on 20 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:
- Loan cost. 32%
- Eligibility and accessibility. 21%
- Loan details. 20%
- Customer experience. 16%
- Direct payment to creditors. 15%
- Application process. 11%
Within each category, we also considered several characteristics, including available loan amounts, repayment terms, APR ranges and applicable fees. We also looked at minimum credit score requirements, whether each lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated the availability of each provider’s customer support team.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Personal Loans Rating & Review Methodology.
Frequently Asked Questions (FAQs)
What are the best lenders for borrowers with bad credit?
Avant, OppLoans and Personify are some of the best lenders that may offer personal loans to borrowers who want to consolidate debt with bad credit.
However, interest rates on these loans will likely be high, so it’s essential to shop around, compare rates and fully understand the costs before borrowing.
What rates should you expect on a debt consolidation loan?
If you have poor credit, interest rates on an installment loan can be over 100% APR.
