- Best Debt Consolidation Loans for Bad Credit of January 2025
- Here’s a closer look at our picks for the best debt consolidation lenders for bad credit
- How do debt consolidation loans work if you have bad credit?
- How to get approved for a debt consolidation loan even if you have bad credit
- Compare the pros and cons of debt consolidation loans for bad credit
- Where to get a debt consolidation loan if you have bad credit
- 5 steps to getting a debt consolidation loan with bad credit
- Frequently asked questions about debt consolidation for bad credit
- Other ways to tackle debt if you have bad credit
Upstart: Best for thin credit
Est. APR
7.80-35.99%
Loan amount
$1K-$50K
Min. credit score
None
View details
Qualifications:
Upstart personal loans offer fast funding and may be an option for borrowers with low credit scores or thin credit histories. Upstart is a solid choice for financing large purchases.
- Must be a U.S. citizen or permanent resident living in the U.S.
- Must be at least 18 years old in most states.
- Must have a valid email address and Social Security number.
- Must have a full- or part-time job, a full-time job offer starting within six months or another source of regular income.
- Must have a personal bank account at a U.S. financial institution with a routing number.
- No bankruptcies in the last 12 months.
- No current delinquent accounts on your credit reports.
- Fewer than six hard inquiries on your credit report in the last six months, excluding student, auto and mortgage loans.
- Minimum credit score: None.
- Minimum annual income: $12,000.
- Origination: 0% to 12%.
- Late fee: 5% of the unpaid amount or $15, whichever is greater.
- Insufficient funds fee: $15.
Upgrade: Best for multiple rate discounts
Est. APR
9.99-35.99%
Loan amount
$1K-$50K
Min. credit score
580
View details
Qualifications:
Upgrade personal loans come with multiple rate discounts and offer direct payment to creditors. This lender has a low minimum credit score requirement, making the perks stand out even more.
- Minimum credit score: 580.
- Minimum number of accounts on credit history: One account.
- Maximum debt-to-income ratio: 75%, including mortgage payments.
- Minimum length of credit history: Two years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security, disability benefits and other sources.
- Origination fee: 1.85% to 9.99%.
- Late Fee: $10.
- Failed payment fee: $10.
Universal Credit: Best for fast funding
View details
Qualifications:
A Universal Credit loan is a sound option for bad-credit borrowers looking to build credit, but rates are high compared to similar lenders.
- Minimum credit score: 580.
- Minimum number of accounts on credit history: 1 account.
- Maximum debt-to-income ratio: 75%, including mortgage and the loan you’re applying for.
- Minimum length of credit history: 2 years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security and other sources.
- Origination fee: 5.25% to 9.99%.
- Late fee: Up to $10.
- Non-sufficient funds fee: $10.
Prosper: Best for hardship support
Est. APR
8.99-35.99%
Loan amount
$2K-$50K
Min. credit score
560
View details
Qualifications:
Prosper accepts borrowers across the credit spectrum and offers competitive rates and fees, plus instant approval.
- Minimum credit score: 560; borrower average is 709.
- Minimum income: No minimum requirement; borrower average is $137,000.
- Maximum debt-to-income ratio: 50% (excluding mortgage); borrower average is 41.05% (including mortgage).
- Must be at least 18 years old.
- Must provide Social Security number and a U.S. bank account.
- Origination fee: 1% to 9.99%.
- Late fee: The greater of $15 or 5% of the unpaid amount.
- Insufficient funds fee: $15.
- Mailed-in payment fee: $5.
Avant: Best for low income requirement
Est. APR
9.95-35.99%
Loan amount
$2K-$35K
Min. credit score
550
View details
Qualifications:
Avant personal loans are a solid option for fair- and bad-credit borrowers who need fast funding, but their rates and origination fees can be high.
- Minimum credit score: 550. Avant uses FICO score version 8.0 and VantageScore version 3.0 from TransUnion.
- Minimum monthly net income: $1,200. This lender accepts income from employment alimony, retirement, child support, Social Security payments or disability benefits.
- Must be a resident of a state where Avant’s loans are available.
- Must provide a Social Security number.
- Must have a personal bank account in your name.
- No active bankruptcies.
- Origination fee: Up to 9.99%.
- Late fee: $25.
- Nonsufficient funds fee: $15.
Best Egg: Best for secured loan option
Est. APR
7.99-35.99%
Loan amount
$2K-$50K
Min. credit score
600
View details
Qualifications:
Best Egg is worth considering for borrowers looking for a secured loan or to consolidate debt, but the loans come with an origination fee.
- Minimum credit score: 600.
- Maximum debt-to-income ratio: 70% including a mortgage.
- Minimum credit history: 3 years and 1 account.
- Acceptable income sources: Employment, household income, alimony, retirement, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or permanent resident and at least 18 years of age.
- Origination fee: 0.99% - 9.99%.
Upstart: Best for thin credit
Est. APR
Loan amount
Min. credit score
View details
Qualifications:
Upstart personal loans offer fast funding and may be an option for borrowers with low credit scores or thin credit histories. Upstart is a solid choice for financing large purchases.
- Must be a U.S. citizen or permanent resident living in the U.S.
- Must be at least 18 years old in most states.
- Must have a valid email address and Social Security number.
- Must have a full- or part-time job, a full-time job offer starting within six months or another source of regular income.
- Must have a personal bank account at a U.S. financial institution with a routing number.
- No bankruptcies in the last 12 months.
- No current delinquent accounts on your credit reports.
- Fewer than six hard inquiries on your credit report in the last six months, excluding student, auto and mortgage loans.
- Minimum credit score: None.
- Minimum annual income: $12,000.
- Origination: 0% to 12%.
- Late fee: 5% of the unpaid amount or $15, whichever is greater.
- Insufficient funds fee: $15.
Upgrade: Best for multiple rate discounts
Est. APR
Loan amount
Min. credit score
View details
Qualifications:
Upgrade personal loans come with multiple rate discounts and offer direct payment to creditors. This lender has a low minimum credit score requirement, making the perks stand out even more.
- Minimum credit score: 580.
- Minimum number of accounts on credit history: One account.
- Maximum debt-to-income ratio: 75%, including mortgage payments.
- Minimum length of credit history: Two years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security, disability benefits and other sources.
- Origination fee: 1.85% to 9.99%.
- Late Fee: $10.
- Failed payment fee: $10.
Universal Credit: Best for fast funding
View details
Qualifications:
A Universal Credit loan is a sound option for bad-credit borrowers looking to build credit, but rates are high compared to similar lenders.
- Minimum credit score: 580.
- Minimum number of accounts on credit history: 1 account.
- Maximum debt-to-income ratio: 75%, including mortgage and the loan you’re applying for.
- Minimum length of credit history: 2 years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security and other sources.
- Origination fee: 5.25% to 9.99%.
- Late fee: Up to $10.
- Non-sufficient funds fee: $10.
Prosper: Best for hardship support
Est. APR
Loan amount
Min. credit score
View details
Qualifications:
Prosper accepts borrowers across the credit spectrum and offers competitive rates and fees, plus instant approval.
- Minimum credit score: 560; borrower average is 709.
- Minimum income: No minimum requirement; borrower average is $137,000.
- Maximum debt-to-income ratio: 50% (excluding mortgage); borrower average is 41.05% (including mortgage).
- Must be at least 18 years old.
- Must provide Social Security number and a U.S. bank account.
- Origination fee: 1% to 9.99%.
- Late fee: The greater of $15 or 5% of the unpaid amount.
- Insufficient funds fee: $15.
- Mailed-in payment fee: $5.
Avant: Best for low income requirement
Est. APR
Loan amount
Min. credit score
View details
Qualifications:
Avant personal loans are a solid option for fair- and bad-credit borrowers who need fast funding, but their rates and origination fees can be high.
- Minimum credit score: 550. Avant uses FICO score version 8.0 and VantageScore version 3.0 from TransUnion.
- Minimum monthly net income: $1,200. This lender accepts income from employment alimony, retirement, child support, Social Security payments or disability benefits.
- Must be a resident of a state where Avant’s loans are available.
- Must provide a Social Security number.
- Must have a personal bank account in your name.
- No active bankruptcies.
- Origination fee: Up to 9.99%.
- Late fee: $25.
- Nonsufficient funds fee: $15.
Best Egg: Best for secured loan option
Est. APR
Loan amount
Min. credit score
View details
Qualifications:
Best Egg is worth considering for borrowers looking for a secured loan or to consolidate debt, but the loans come with an origination fee.
- Minimum credit score: 600.
- Maximum debt-to-income ratio: 70% including a mortgage.
- Minimum credit history: 3 years and 1 account.
- Acceptable income sources: Employment, household income, alimony, retirement, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or permanent resident and at least 18 years of age.
- Origination fee: 0.99% - 9.99%.
Here’s a closer look at our picks for the best debt consolidation lenders for bad credit
Upstart: Best for thin credit histories
What credit score do I need? Upstart has no minimum credit score requirement.
How much can I borrow? You can borrow between $1,000 to $50,000.
How long can I take to repay the loan? You can choose between 3, 5 or 7 years.
Why we like Upstart: Upstart loans are available to borrowers who want to apply for a debt consolidation loan but don’t have enough credit history to generate a credit score, which is a unique feature among lenders.
» MORE: Read our Upstart review
Upgrade: Best for multiple rate discounts
What credit score do I need? You need a minimum 580 credit score to apply with Upgrade.
How much can I borrow? You can borrow between $1,000 to $50,000.
How long can I take to repay the loan? You can choose between 2 to 7 years.
Why we like Upgrade: Qualifying for a low rate is important for debt consolidation, and Upgrade offers multiple ways to get a discount, like by setting up automatic payments — which also helps you avoid late fees.
» MORE: Read our Upgrade review
Universal Credit: Best for fast funding
What credit score do I need? You need a minimum 580 credit score to apply with Universal Credit.
How much can I borrow? You can borrow between $1,000 to $50,000.
How long can I take to repay the loan? You can choose between 3 or 5 years.
Why we like Universal Credit: Universal Credit can fund most debt consolidation loans the day after you’re approved, getting you quickly on the path to paying off your debts.
» MORE: Read our Universal Credit review
Prosper: Best for hardship support
What credit score do I need? You need a minimum 560 credit score to apply with Prosper.
How much can I borrow? You can borrow between $2,000 to $50,000.
How long can I take to repay the loan? You can choose between 2 to 5 years.
Why we like Prosper: If you go through a financial rough period, Prosper offers hardship support, which may include reduced monthly payments or an extended term on debt consolidation loans.
» MORE: Read our Prosper review
Avant: Best for low income requirement
What credit score do I need? You need a minimum 550 credit score to apply with Avant.
How much can I borrow? You can borrow between $2,000 to $35,000.
How long can I take to repay the loan? You can choose between 2 to 5 years.
Why we like Avant: Avant’s low income requirement — $1,200 net monthly — could help you qualify if you’re worried your credit score isn't high enough. Income is another factor lenders consider when deciding whether to approve you for a loan.
» MORE: Read our Avant review
Best Egg: Best for secured loan option
What credit score do I need? You need a minimum 600 credit score to apply with Best Egg.
How much can I borrow? You can borrow between $2,000 to $50,000.
How long can I take to repay the loan? You can choose between 3 to 5 years.
Why we like Best Egg: Best Egg lets borrowers use home fixtures or their vehicle as collateral for a debt consolidation loan, which can help you qualify for a lower rate or a larger loan.
» MORE: Read our Best Egg review
How do debt consolidation loans work if you have bad credit?
Many people who struggle with debt have bad credit (a 629 credit score or lower), but the good news is you can still qualify for a debt consolidation loan.
Online lenders and credit unions offer debt consolidation loans for borrowers with low credit scores, and these loans can not only ease your debt burden, but also help you save money in the long run.
Here’s how it works: You apply for a debt consolidation loan (amounts range from $1,000 to $50,000), and if approved, you use that money to pay off all your debts in one go. Now you’re left with only one debt — your new loan — which simplifies the payoff process, since you’re no longer juggling multiple payments and due dates. Most debt consolidation loans come with repayment terms of one to seven years.
Debt consolidation loans make the most sense if you can qualify for a lower interest rate than the average rate you’re currently paying across your debts. It can be harder to qualify for a low rate if you have bad credit, but it’s certainly not impossible. You may just need to compare rates from a few different lenders before you apply.
How to get approved for a debt consolidation loan even if you have bad credit
Many lenders offer debt consolidation loans for borrowers with bad credit, and you may not need to do anything other than apply. But if you want to boost your approval chances even higher, these three tips can help.
Rack up a couple quick wins for your credit score
Before you apply for a debt consolidation loan, start by paying down any small debts, if possible. This lowers your debt-to-income ratio, which can help quickly build your score. You can also check your credit report for errors (more common than you think!) and file a dispute.
Add someone with better credit to your loan application
Applying for a co-signed or joint loan, especially if the co-borrower has a better credit score or higher income than you, can majorly improve your chances of getting approved. You’ll want to make sure this is a person you can trust, since they may have access to the loan funds, and they’ll be equally on the hook for repayment.
Tie collateral to the loan application
Applying for a secured loan, in which you pledge collateral like your car or savings account to help guarantee the loan, is another way to boost your application. This makes the loan less risky for the lender, so they’re more likely to approve or give you a lower rate. But keep in mind that if you fail to repay the loan, the lender can seize the collateral.
Compare the pros and cons of debt consolidation loans for bad credit
- Save interest and time.
- Fixed, predictable payments.
- Ability to build credit.
- Clear finish line to being debt-free.
- May not qualify for a low rate.
- Temporary hit to your credit.
- Doesn’t address the root causes of debt.
Pros of debt consolidation loans for bad credit
You’ll save money on interest: By consolidating your debts under a loan with a lower interest rate, you’ll save money on interest. You can even apply that savings back to your debt to speed up your payoff time and get out of debt faster.
You’ll have fixed monthly payments: Debt consolidation loan payments are fixed, meaning you’ll owe the same amount each month, which makes it easier to budget for.
You can build credit: Reputable lenders will report your payment history to the credit bureaus, so paying off your consolidation loan on time can help build your credit score.
You’ll have a clear finish line: By taking out a loan with a set repayment term, you’ll know exactly what day you’ll be debt-free, which can be especially motivating.
Cons of debt consolidation loans for bad credit
It may be hard to get a low enough rate: Borrowers with bad credit may have a hard time qualifying for a lower rate than their current debts. (See ways to improve your chances of approval below.)
Your credit will take a small hit: Applying for a debt consolidation loan will require a hard credit inquiry, which temporarily knocks a few points off your credit score.
Consolidation doesn’t address the root causes of debt: Consolidating your debts won’t fix issues like overspending or not making enough income to cover expenses.
Where to get a debt consolidation loan if you have bad credit
The best place to get a debt consolidation loan if you have bad credit is with an online lender or a credit union.
Online lenders
Many online lenders offer debt consolidation loans to borrowers no matter their credit score, but some may charge high rates for bad-credit borrowers. It’s best to shop around and pre-qualify with multiple online lenders in order to get the best rate (more on that process lower down).
Online lenders also offer convenient perks, including quick funding. Many can fund a debt consolidation loan the same day you’re approved. Some lenders will send the loan funds directly to your creditors, saving you the step of paying off the debts yourself.
» COMPARE: The best debt consolidation loans
Credit unions
Credit unions are not-for-profit financial organizations that may offer more flexible terms and lower rates than online lenders. Federal credit unions cap annual percentage rates on personal loans at 18%.
You also need to become a member of the credit union to apply for a loan, which may mean living or working nearby and paying a small membership fee. A local credit union is a good place to start, though national credit unions also offer debt consolidation loans.
» COMPARE: Top credit unions for personal loans
5 steps to getting a debt consolidation loan with bad credit
1. Know how much debt you have and what rate you need to qualify for
Knowing how much debt you’re carrying tells you the loan amount you need to apply for. You can use NerdWallet’s debt consolidation calculator to plug all your existing debts into one place and get the total amount.
You can also use the calculator to see the combined interest rate. Look for a debt consolidation loan with a lower annual percentage rate, or APR, than your existing debts. This saves you money on interest.
Nerdy Tip
Though rates on debt consolidation loans vary, borrowers with a credit score of 629 or lower may qualify for an estimated average APR around 18.80%, according to anonymized data from users who pre-qualified with NerdWallet.
2. Pre-qualify with multiple lenders
If you have bad credit, it’s particularly important to compare interest rates and terms from multiple lenders in order to get the best deal on your debt consolidation loan. The easiest way to do that is by a process called pre-qualifying.
Pre-qualifying just means filling out a short application on the lender’s website and submitting to a soft credit check, which won’t hurt your credit score. You can then view your estimated annual percentage rate with that lender. You’ll want a rate that’s lower than your existing debts, which allows you to save money and get out of debt faster.
Almost all online lenders offer pre-qualification, as well as some credit unions.
3. Submit your application
Once you’ve pre-qualified and chosen a lender, it’s time to officially apply for the loan. This process is usually online, and you’ll be asked to provide personal information, including your Social Security number, and any required documentation that verifies your identity, income and employment.
Many lenders can make an immediate approval decision, though some may take a few business days to get back to you.
» MORE: How to apply for a personal loan
4. Get funded
Once you’re approved, you’ll receive the loan documents, which you can usually sign electronically. Make sure to read the documents carefully before signing.
Lenders can deposit the funds directly into your bank account, though some may offer direct payment to creditors, which means the lender pays off your creditors for you, simplifying the process — and eliminating any temptation to use the cash for something else.
Though funding time varies, many online lenders offer same- and next-day funding.
5. Pay down debt and keep up with loan payments
Once you receive the funds in your account, use them to pay off your debts. If the funds are being sent to your creditors for you, confirm with each creditor that your debt was successfully paid off.
Next, make a plan to manage your loan, which may include building a budget that prioritizes your new monthly payment and keeping an eye on any refinancing opportunities.
Most lenders charge a late fee for missed payments — and report them to the credit bureaus, which can hurt your score — so consider setting up automatic payments to avoid falling behind.
Frequently asked questions about debt consolidation for bad credit
1. What credit score do I need for a debt consolidation loan?
Many online lenders have no minimum credit score requirement, and some will use alternative data, like your college education or work experience, to help qualify you for a debt consolidation loan. Upstart is a good example.
2. Can I get a guaranteed debt consolidation loan with bad credit?
No lender should guarantee approval for a debt consolidation loan. If you stumble on a lender that implies you’ll be approved no matter what, steer clear. This is likely a predatory lender that may charge triple-digit interest rates. Reputable lenders conduct a hard credit check before deciding whether to approve you and charge a maximum APR of 36%.
3. What is a credit card consolidation loan for bad credit?
A credit card consolidation loan is just another name for a debt consolidation loan. Many people use debt consolidation loans to pay off multiple credit card balances at once, which is why it’s sometimes called a credit card consolidation loan. Online lenders and credit unions offer these loans to borrowers even if they have bad credit, but you may need to shop around to make sure you’re getting the best rate.
Other ways to tackle debt if you have bad credit
A debt consolidation loan isn’t your only option for getting out of debt if you have bad credit.
DIY debt payoff strategies
You can take a do-it-yourself approach to paying off debt with two time-tested strategies: the debt snowball or the debt avalanche method.
With the debt snowball method, you tackle your smallest debt first and then work your way up, building momentum as you go. With the debt avalanche, you tackle your most expensive debt first, meaning the one with the highest interest rate, and apply your savings to the next highest and so on.
Credit counseling
If you’d like help with tackling your debt instead, credit counseling can be a great resource. Credit counselors at a reputable non-profit can help negotiate your interest rates down and put you on a debt management plan. These plans can help you get out of credit card debt in three to five years and come with small monthly fees.
Debt settlement
Debt settlement is the process of settling your debts for less than you owe, usually with the help of a debt settlement company. A debt settlement company will ask you to stop making payments on your debts and instead funnel that money into a holding account. Once a debt is significantly overdue, the settlement company will approach your creditor with a settlement offer, using the money in the holding account. Debt settlement is risky, though, so explore alternatives first.
Bankruptcy
If you have significant debt (more than 40% of your income) and you don’t think you can pay it off within five years, bankruptcy is another option. This wipes out most unsecured debts, but it’s hard on your credit score. You’ll want to consider other alternatives first.
» COMPARE:More options for debt relief
Last updated on January 10, 2025
- 35+ personal loans reviewed and rated by our team of experts.
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Methodology
NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial technology companies and financial institutions. We collect over 50 data points and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
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