We've considered fees, interest rates and repayment terms to determine the best debt consolidation loans for people with poor credit.
Debt consolidation can be an excellent way to manage multiple debts and pay them off quickly. This allows you to consolidate into one loan with a fixed interest rate and a single monthly payment This eliminates the stress of managing multiple bills and due dates and can 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. As with any type of loan, borrowers with a strong credit profile are more likely to get approved. They are also more likely to get more favorable positions.
 |
| Best Loan Consolidation Loans If You Have Bad Credit |
It is possible to find options without a good credit score. However, it is crucial to pay attention to other additional costs such as interest rates and sign-up fees. You could end up with terms that make your loan more expensive than what 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 approach below.)
Best loan consolidation loans for bad credit
- Best Overall: Achievement
- Best for people with no credit history: Upstart
- Best for flexible repayment terms: Upgrade
- Best for fast approval: LendingPoint
- Best for low origination fees: Avant
Who is it for? Achieving is an excellent debt consolidation loan option for those with poor credit, thanks to its flexible terms, fast approvals, fast funding and relatively reasonable interest rates.
To qualify for a personal loan from Achieve, you need a credit score of 620, which is considered fair. You can see if you're likely to be approved when you apply online: Achieve will do a soft credit investigation, meaning it won't affect your score.
If you choose to proceed with your application after pre-approval, the company will perform a hard credit check that may award you a few credit points. Achieve offers same-day approvals and can then send funds within 24 to 72 hours.
If your credit is highly desirable, you may qualify for an interest rate at the higher end of the APR range. Most debt consolidation loans for bad credit can charge up to 36% interest, but the maximum interest rate achievable is considerably lower.
Who is it for? Upstart can be a tough option for those with no credit history. Companies consider factors outside of your credit, such as your work experience and education history, when evaluating your application.
You can borrow as little as $1,000, which makes Upstart a good choice if you need a small loan.
Upstart lets you check the interest rate you'll get before you apply without affecting your credit score. According to Upstart, 99% of personal loan funds are sent within one business day of signing. Note, however, that origination fees can be somewhat expensive depending on the terms of your loan.
Who is it for? Upgrade stands out for offering a wide range of loan term options, making it easy to find a repayment plan that fits your situation. Upgrade can send funds directly to your lenders, simplifying the process for you.
You can borrow as little as $1,000 and receive funds within one business day of submitting all the required documents. Available loan tenures range from 24 months to 84 months.
The interest rates for this type of loan are quite standard and you can check what APR you will get before committing to the loan.
Who is it for? LendingPoint is worth considering if you need quick access to funds or have a bad credit score.
You can check the terms you get without affecting your credit score. Once you apply, the company will let you know within seconds whether they will approve you. After that, it should take one business day to receive the funds.
Note that LendingPoint has an income requirement of $35,000 and does not offer loans in Nevada and West Virginia.
Who is it for? Avant can be an excellent option if you want to save on the upfront cost of your debt consolidation loan. While other lenders on our list charge 7% or more as origination fees, Avant will charge you 4.75% or less. If you have borrowed a large amount of money, this can lead to significant savings.
In addition, you can get money quickly. If you are approved by 4:30 pm CT on a business day, you will receive your funds the next day. Plus, you can get pre-qualified without affecting your credit score.
FAQs
- Can I apply for debt consolidation with bad credit?
- Why can't I get a debt consolidation loan?
- What are the downsides of debt consolidation?
- How long does it take to get approved for a debt consolidation loan?
Can I apply for debt consolidation with bad credit?
It is possible to qualify for a debt consolidation loan with bad credit (a credit score below 670). However, it is important to pay attention to the terms. Personal loan interest rates for poor credit can sometimes exceed the APR on credit cards, especially if you apply with a low credit score.
When this is the case, taking a loan may not be the best option to get rid of your debt. Instead, consider other ways to tackle your balance. For example, you may be able to negotiate repayment terms with your current lenders. It may also be a good idea to seek credit counseling and help create a debt management plan.
Why can't I get a debt consolidation loan?
Even with debt consolidation loans for bad credit, approval is not guaranteed. Lenders usually look at several factors when evaluating a loan application. For example, you may be denied if you don't meet income requirements or if your debt-to-income ratio is too high.
Remember that any lender that denies your credit application must disclose specific reasons within 60 days under the Equal Credit Opportunity Act.
What are the downsides of debt consolidation?
Debt consolidation can be an excellent debt repayment strategy but it is not suitable 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 may still pay more in interest if you choose a longer loan term.
- You can pay the cost in advance. Debt consolidation loans usually charge a loan origination fee which can run high if you are dealing with a large debt.
- You may be tempted to continue spending. Consolidating multiple balances into one loan can feel like a weight off your shoulders. However, if you know you're having trouble living below your means or saving enough, you may fall back into your old patterns once you're debt-free. To avoid this, be disciplined about your budget and make it a point to prioritize paying off debt.
How long does it take to get approved for a debt consolidation loan?
You can expect to receive a lender's decision within a few business days. However, many lenders can approve you immediately. For a smooth process, make sure you provide any documentation the lender requires with your application and respond promptly to requests for more information.
last row
Debt consolidation can be a difficult task if your credit score is not perfect. Fortunately, it is possible to qualify for a debt consolidation loan despite a low score.
It's important to do the math before taking out a debt consolidation loan. Check the APR before applying to see if the lender offers this option and factor in the origination fee to determine if a debt consolidation loan will save you money. If not, you may be better off finding a different strategy to deal with your debt.
Our method
To determine which debt consolidation loan is best for customers with bad credit, select from dozens of US personal loans offered by both online and brick-and-mortar banks, including large credit unions.
While 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 life of your loan. With a fixed rate APR, you lock in an interest rate for the term of the loan, meaning your monthly payment won't change, making it easier to plan your budget.
- Flexible minimum and maximum loan amounts/terms: Each lender offers multiple financing options that you can customize based on your monthly budget and how long you need to repay your loan.
- No early repayment penalty: Lenders on our list do not charge borrowers for early repayment of loans.
- Streamlined Application Process: We considered whether lenders offer same-day approval decisions and a faster online application process.
- Customer Support: Every loan on our list offers customer service available via telephone, email or secure online messaging. We've also selected lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
- Funds Disbursement: The loans on our list deliver funds quickly to your checking account via electronic wire transfer or in the form of a paper check. Some lenders (which we've mentioned) offer the ability to pay your creditors directly.
- Creditor Payment Limits and Loan Sizes: The above lenders offer loan sizes ranging from $1,000 to $50,000. Each lender advertises its respective payment limits and loan sizes, and completing a pre-approval process can give you an idea of what your interest rate and monthly payment will be.
Advertised rates and fee structures for personal loans may fluctuate according to Fed rates. However, once you accept your loan agreement, a fixed-rate APR will guarantee your interest rate and monthly payments will remain consistent throughout the term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To get a loan, many lenders will conduct a rigorous credit investigation and request a complete application, which may require proof of income, identity verification, proof of address, and more.
