A debt consolidation loan can streamline multiple bills into a single monthly payment at a fixed, lower rate. If you have bad credit, though, you'll have a harder time qualifying or being offered favorable interest rates.
We've selected the best debt consolidation loans for borrowers with bad credit, looking at requirements, interest rates, fees, repayment terms and other factors. To learn how we made our picks, read our methodology.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
7.99%–35.99%
Up to $50,000
9.95% to 35.99%
$2,000 to $35,000
Best debt consolidation loans for bad credit
Best for low credit scores: Avant
Who's this for? Avant borrowers only need a 550 FICO Score, making debt consolidation accessible to a wider range of borrowers.
Standout benefits: Avant advertises that loans can be approved in just minutes.
This online lender approves borrowers with lower credit and income requirements than many competitors. We also like its speedy approval process and next-day funding, although it won't pay your creditors directly if you have a debt consolidation loan. The APR and origination fee for applicants with weak credit can be high, but the tradeoff may be worth it if you've been unable to get approved elsewhere.
- Lends to applicants with poor credit
- Funding often available next day
- Late-payment grace period of 10 days
- Origination fee of up 9.99%
- No autopay discount
- Doesn't offer direct payment to creditors for debt consolidation loans
- No co-signers or collateral
Best for using collateral: OneMain Financial
Who's this for? OneMain Financial allows borrowers to secure their debt consolidation loan with their vehicle title, with a first lien on an eligible vehicle that's insured and meets its valuation requirements. A secured loan lowers the lenders risk and may improve the odds of approval and favorable rate.
Standout benefits: OneMain doesn't have specific credit score requirements and funding can be available in as little as one hour.
We like that OneMain accepts borrowers with bad credit and offers secured loans and fast funding. However, its minimum APR is on the high side and the $30,000 financing maximum may be too low if you need a larger loan.
- Approves applicants with bad/fair credit
- Same-day funding available
- Can apply with collateral
- Co-applicants allowed
- High origination fee
- High minimum interest rate
- No autopay discount
- Co-signers not allowed
*You must complete a loan application and continue to meet any criteria used to select you for a loan offer. Not all applicants are approved. Loan approval and actual loan terms depend on applicant's state of residence and ability to meet OneMain Financial credit standards such as a responsible credit history, sufficient income after monthly expenses, and if applicable, availability of eligible collateral.
Not all approved applicants qualify for larger loan amounts, lower APRs, or the most favorable loan terms. For example, larger loan amounts typically require a first lien on a motor vehicle that is no more than ten years old, meets our value requirements, and is titled in applicant's name with valid insurance. APRs are generally higher on loans not secured by a vehicle.
Example Loan: A $6,000 loan with a 24.99% APR that is repayable in 60 monthly installments would have monthly payments of $176.07.
OneMain charges origination fees allowed by law. Depending on the state where the loan is opened, the origination fee may be either a flat amount or a percentage of the loan amount. Flat fees vary by state, ranging from $25 to $500. Percentage-based fees vary by state, ranging from 1% to 10% of the loan amount subject to certain state limits on the fee amount.
For information about these fees and minimum and maximum loan sizes available in certain states, visit omf.com/loanfees.
Current OneMain Customers: Loan offers presented to a consumer assume the individual has no active loan with OneMain or one of its affiliates. If a customer applies for a new loan offer, a OneMain representative will discuss available options.
Active-duty military, their spouse or dependents covered by the Military Lending Act (MLA) may not pledge any vehicle as collateral. If you are covered by the MLA, you are not eligible for secured loans.Loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB's Regulation Z such as college, university or vocational expense; for any business or commercial purpose; to purchase cryptocurrency assets, securities, derivatives or other speculative investments; or for gambling or illegal purposes.
Time to Fund Loans: Funding within one hour after loan closing through SpeedFunds® must be disbursed to a bank-issued debit card. Disbursement by check or ACH may take up to 1-2 business days after closing.
Best for flexible repayment terms: Achieve
Who's this for? Achieve has two-, three-, four- and five-year repayment plans, allowing more flexibility for borrowers.
Standout benefits: You can earn a discount if you allow at least 85% of the loan funds to be paid directly to your creditors. There are also rate reductions for having a qualified co-borrower or proof of sufficient retirement funds.
If you don't have excellent credit, Achieve is a good option — it accepts borrowers with bad credit, as well as applicants with co-borrowers or co-signers, which can help improve the odds of approval and favorable rates. If you don't need a large loan, however, Achieve's $5,000 loan minimum may mean you need to look elsewhere.
- Works with borrowers with 560 FICO Score.
- Allows co-borrowers.
- Rate discount available for direct creditor pay-off.
- Charges an origination fee.
- Cannot use collateral
- Loans are not available in all states
Best for smaller loans: Upstart
Who's this for? Not carrying a huge debt? Upstart offers debt consolidation loans as small as $1,000.
Standout benefits: Upstart considers factors beyond your credit history when evaluating your application, including work experience and education.
We like that Upstart considers factors besides credit score, including education, income and employment history. However, co-signers aren't accepted.
- Accept applicants with bad or no credit
- Minimum APR is lower than many competitors'
- Approves personal loans up to $75,000
- Most loans are funded the next business day
- Origination fee of 0% to 10%
- Doesn't allow co-signers or co-borrowers
Best for large loans: Upgrade
Who's this for? With a maximum personal loan limit of $50,000, Upgrade is a good option if you have a lot of debts to consolidate.
Standout benefits: There are no prepayment fees and funding is available as early as the next business day. Using Upgrade's Debt Payoff option to pay creditors directly can result in a lower rate.
We like that Upgrade considers borrowers with fair credit and allows you to apply with a co-borrower, which can improve your odds of approval and receiving favorable rates. The maximum interest rate is on the high side, however.
- Accepts applicants with fair credit
- Approves loans of up to $75,000
- Discount for having creditors paid directly
- Funding in as little as one day
- Accepts co-borrowers
- High maximum interest rate
- Origination fee of up to 9.99%
- No physical branches
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
Best for fast approval: LendingPoint
Who's this for? LendingPoint funds loans as soon as the next business day.
Standout benefits: Loans start at $1,000 in most states, which can be useful if you don't need to consolidate a large amount of debt. LendingPoint offers terms of 24 to 72 months, giving borrowers flexibility with their payments.
LendingPoint stands out for offering personal loans to borrowers with fair credit and for providing fast funding. Interest rates can be relatively high and borrowers may face origination fees, so the cost of borroweing can add up. Prequalify to get a estimate of the rate, terms, and borrowing amount you'll be approved for.
- Next-day funding available
- Personal loans start at just $1,000
- Direct pay to creditors available with debt consolidation loans.
- Origination fee can be up to 10%
- Doesn't allow secured loans or co-borrower or co-signers.
- Not available in all states.
Who's eligible to apply for a LendingPoint loan:
- You must be at least 18 years of age.
- You must be able to provide a U.S. federal, state or local government issued photo ID.
- You must have a social security number.
- You must have a minimum annual income of $40,000 (from employment, retirement or some other source).
- You must have a verifiable personal bank account in your name.
- You must live in one of the states where LendingPoint does business (excludes Nevada and West Virginia).
What is a debt consolidation loan?
A debt consolidation combines multiple bills into a single monthly payment, ideally with a lower interest rate. Credit card APRs are typically much higher than the interest on a personal loan, so debt consolidation can be a savvy strategy if you're buried in card debt.
Unlike credit cards with revolving balances, a consolidation loan has a specific end date when you will be debt-free. You can often get your lender to send the funds directly to your creditors.
Some lenders charge an upfront origination fee, which can be between 1% to 10% of the loan amount, which should be taken into account when calculating the total cost of borrowing.
Also, keep in mind that If you choose a longer repayment term to get a lower monthly payment, you might end up paying more interest over time.
In addition, while consolidation can help lower your rate, it doesn't erase the debt or address underlying spending issues. If you keep running up new credit card debt after paying off the old bills, you'll be back where you started.
Buried in bills? See if a debt settlement company can help
How to get a debt consolidation loan with bad credit
Weak credit will make it harder to get approved for a debt consolidation loan, but there are steps you can take to improve your odds.
1. Shop for lenders t
Because they're member-owned and not-for-profit, credit unions tend to have more flexible credit score requirements. Some even specialize in credit-building or "fresh start" loans.
Fintech companies and other online lenders have lower overhead and use AI-driven underwriting that reviews alternative data (income, employment, cash flow, education) rather than just your FICO score. But, the laxer eligibility requirements are often offset by higher interest rates.
2. Get a co-signer
If you have a friend or family member with good credit who is willing to co-sign your loan, it can greatly improve your odds of approval. Make sure they understand they're accountable for the debt and if you default on payments, it will impact their credit as well.
3. Use collateral
If you have bad credit, you can boost your chances by offering to secure the loan with collateral, like a savings account, your car, or your house. You're more likely to be approved (and get a better rate), but if you are unable to make payments, you could face repossession or foreclosure.
How to choose a debt consolidation loan
When determining the best debt consolidation loan, look beyond just the APR and pay attention to:
- The loan term
- Origination fees
- Loan limits
- Customer service
- The lender's online offerings
Pros and cons of debt consolidation loans
Debt consolidation isn't the perfect strategy for everyone. Here are the benefits and drawbacks.
- A lower APR than you're currently paying
- Multiple bills streamlined into a single monthly payment
- If you use the money to pay off your car loan, your vehicle won't be collateral anymore
- On-time payments and lower credit utilization can improve your credit score
- May come with an origination fee.
- Rorganizes debt, but doesn' lower amount you owe or fix the underlying spending issues.
- You might fall back into bad financial habits once you free up more credit.
Alternatives to debt consolidation loans
A debt consolidation loan might be hard to secure if you have credit issues. Some alternatives to debt consolidation include:
Negotiating with your lenders: Don't be afraid to reach out to your creditors about lowering your interest rate, developing a payment plan or forming other arrangements to make your loan more manageable.
Mortgage refinancing: If you have a home loan, you may be able to take out a cash-out refinancing loan with a lender like Chase Bank or Rocket Mortgage. This replaces your existing mortgage with a larger loan and allows you to use the difference to consolidate your debt.
Chase Bank
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, FHA loans, VA loans, DreaMaker℠ loans and Jumbo loans
Terms
10 – 30 years
Credit needed
620
Minimum down payment
3% if moving forward with a DreaMaker℠ loan
Terms apply.
Offers first-time homebuyer assistance?
Yes — click here for details
Rocket Mortgage
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages are available.
Types of loans
Conventional loans, FHA loans, VA loans, Jumbo loans, low-down-payment mortgages
Terms
10-, 15- and 30-year fixed-term conventional loans, 30-year VA and FHA loans, custom mortgages with fixed-rate terms from 8 to 29 years.
Credit needed
620 for conventional loans
Minimum down payment
0% for VA, 1% for RocketONE+, 3% for conventional, 3.5% for FHA, 10% to 15% for jumbo
Read our review of Rocket Mortgage
Credit counseling: Credit counseling agencies like like Money Management International and Apprisen can work with your creditors to create a debt management plan, enabling you to repay your balance with reduced interest rates, fees and reduced monthly payments.
Money Management International
Highlights
The largest nonprofit credit counseling organization in the U.S., MMI delivers both debt management and debt settlement plans, with online financial education tools and 30 branch offices.
Minimum debt
$0 ($2,000 for debt settlement plans)
Fees
Initial set-up fee ($33-$75) and ongoing monthly fee ($25-$69). Fees vary based on state and debt amount.
Availability
Operates in all 50 U.S. states and Washington, D.C.
Pros
- Offer credit counseling and debt relief.
- Debt management plans available nationwide.
- High success rate in reducing interest rates.
- A+ rating from the Better Business Bureau and overwhelmingly positive reviews.
Cons
- Initial setup fee and monthly subscription.
- Debt relief programs not available in all states.
- Clients must close any enrolled credit cards.
Apprisen
Highlights
Founded in 1955, Apprisen offers budgeting workshops, debt management plans, credit counseling, housing seminars and bankruptcy education in person and online. Clients can subscribe to the financial health platform Propel to gain on-demand access to certified financial coaches and exclusive budget tools.
Minimum debt
$0
Fees
Vary by state but will never exceed $45 one-time setup fee and $45 monthly fee.
Availability
Operates in all 50 U.S. states and Washington, D.C.
Pros
- Setup and monthly fees capped at $45 each.
- Operates nationwide
- First-time homebuyer guidance.
Cons
- Clients must close any enrolled credit cards.
- Doesn't settle debts for less than the outstanding principal.
Debt relief company: Debt relief companies like Freedom Debt Relief and Accredited Debt Relief can negotiate with your creditors to accept less than the full balance owed. You typically need at least $7,500 in unsecured debt, however, and the fee for their service can be as much as 25% of your enrolled debt.
Freedom Debt Relief
Minimum debt
$7,500
Fees
Settlement fee is 15% to 25% of enrolled debt. $9.95 escrow account set-up charge and $9.95 monthly service fee
Availability
Not available in Colorado, North Dakota, Oregon, Rhode Island, Vermont, West Virginia, Wisconsin, Wyoming or Washington, D.C.
Highlights
Freedom Debt Relief has resolved over $20 billion in outstanding debts since 2002. It offers free credit card debt relief consultations.
Accredited Debt Relief
Minimum debt
$10,000
Fees
Settlement fee averages 25% of enrolled debt.
Availability
Available in 37 U.S. states and Washington, D.C.
Highlights
Started in 2011, Accredited Debt Relief has helped clients resolve over $1 billion in debt.
Read our review of Accredited Debt Relief
How to improve your credit score
The best way to get approved for a loan is to have good credit. If yours is less-than-stellar,
1. Check your credit score. You need to know what you're working with. You can get a free FICO® Score from Experian, and many banks and credit card issuers also provide customers with scores.
2. Make on-time payments. Payment history accounts for 35% of your credit score, making it the largest factor. A steady record of paying your bills on time and in full for a few months can raise your score by 20 to 50 points. Larger gains are possible, depending on how low your score is.
3. Lower your credit utilization rate. Your credit utilization ratio (CUR) is the amount of credit you're currently using compared to your total credit limit. If you have a $30,000 limit across all your credit cards and your bills total $10,000, your CUR is 33%. Experts recommend a CUR below 30% to get approved for most personal loans and credit cards, but a ratio of below 10% will get you the best rates.
Paying off bills will obviously lower your CUR. But you can also ask for an increase on your credit card limit. So long as you don't ring up more charges, your ratio will decline.
4. Avoid opening too many accounts at once. Every time you apply for a loan or credit card, the lender runs a hard credit inquiry. Too many inquiries in a short span of time can signal financial instability and will ding your score. The same is true about asking for credit limit increases.
5. Dispute errors on your credit report. Mistakes on credit reports are surprisingly common, so it's important to check your reports from all three major credit bureaus for errors and signs of identity theft or fraud.
You can get credit reports from Experian, Equifax and TransUnion from annualcreditreport.com.
Debt consolidation FAQs
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. To ensure a smoother process, include any documentation the lender requires with your application and promptly respond to requests for more details.
Do debt consolidation loans hurt your credit?
Applying for any kind of personal loan can temporarily lower your credit score because the lender will run a hard inquiry on your credit history. Managing the loan properly — making payments on time and in full, and avoiding new lines of credit too soon after—will allow your score to climb back up quickly.
Is a debt consolidation loan a good idea?
A debt consolidation loan can be a good idea if you're able to secure a better rate than your current one. Be sure to consider the loan term and any origination fees when deciding whether it makes financial sense.
How can you improve your credit score?
Payment history is the largest chunk of your credit history, so making on-time payments in full each month helps increase your credit score. Also avoid applying for too many new lines of credit at the same time, as lenders perform hard credit inquiries that can temporarily lower your credit score.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every loan review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Our methodology
To determine which debt consolidation loans are the best for consumers with bad credit, CNBC Select analyzed dozens of banks, credit unions and online lenders.
To narrow down our list, we focused on the following features:
- APR: We considered lenders' maximum interest rates.
- Loan terms: Lenders with broader repayment term options were given more weight.
- Loan amounts: We considered the minimum and maximum loan amounts lenders make available.
- Eligibility requirements: When possible, we considered the minimum FICO Score required for approval and whether a lender accepted alternative data, such as employment, education and savings. We also considered whether a lender accepted collateral, co-borrowers or co-signers.
- Fees: We considered lenders' origination fees and late fees for debt consolidation loans. None of the the lenders on our list charge a prepayment penalty.
- Application process: We evaluated whether lenders offered an easy-to-complete online application and same-day approval.
- Funding speed: All of the lenders on our list made loan funds available as soon as the next business day.
- Direct pay: We noted when lenders offer to pay creditors directly or provided lower rates on debt consolidation loans for choosing direct payment.
- Customer support: Lenders with robust customer service hours, online chat and mobile apps were given more weight.
We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.
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