4 Best Debt Consolidation Loans for Bad Credit [April 2024]

Best Debt Consolidation Loans for Bad Credit in 2024

LendingPoint

The best debt consolidation loans for bad credit are from LendingPoint. The company requires a credit score of 600+ to qualify, offers loan amounts of $2,000 - $36,500 and has an APR range of 7.99% - 35.99%.

Upstart

Debt consolidation loans through Upstart are the best if you need a large loan. These loans have dollar amounts of $1,000 - $50,000 with typical APRs of 6.4% - 35.99%. You do not need a credit score to qualify.**

Upgrade

Upgrade has the best debt consolidation loans for bad credit with a quick funding timeline. The company offers funding as soon as two business days after getting approved, dollar amounts of $1,000 - $50,000 and an APR range of 8.49% - 35.99%. To qualify for an Upgrade loan, borrowers must have a credit score of 620+.

Universal Credit

Universal Credit offers the best debt consolidation loans for bad credit with no origination fee. To qualify for a Universal Credit debt consolidation loan, borrowers must have a credit score of 580 or higher. The company also has loan amounts of $1,000 - $50,000 and an APR range of 11.69% - 35.99%.

OneMain Financial

OneMain Financial offers the best debt consolidation loans with long repayment periods. The company has repayment periods of 24, 36, 48 or 60 months, loan amounts of $1,500 - $20,000 and an APR range of 18% - 35.99%. OneMain Financial requires a credit score of 600 - 650, according to multiple third-party sources.

Best Debt Consolidation Loans for Bad Credit Comparison

Company	APR	Loan Amounts	Score Required
Upstart	6.4% - 35.99%, typically	$1,000 - $50,000	None
Upgrade	8.49% - 35.99%	$1,000 - $50,000	620*
LendingPoint	7.99% - 35.99%	$2,000 - $36,500	600
Universal Credit	11.69% - 35.99%	$1,000 - $50,000	580
OneMain Financial	18% - 35.99%	$1,500 - $20,000	600 - 650*

*According to multiple third-party sources

Tips for Getting a Debt Consolidation Loan With Bad Credit

Consolidate debts with the highest interest rates. With bad credit, you’re unlikely to get a great APR on a personal loan. In fact, you should expect to get a rate as high as 36%. As a result, you’ll want to use your loan to consolidate things like payday loans, which charge fees equivalent to as much as a 400% APR. But it probably won’t make sense to consolidate things like credit card debt, which is likely to have a lower rate than your personal loan.
Get pre-qualified. Lots of lenders let you pre-qualify before submitting an application to see your approval odds and potential rates. You can check with multiple lenders at once, without impacting your credit score, by using WalletHub’s free pre-qualification tool.
Raise your income. While this is easier said than done, getting a little extra money by working longer hours, switching to a higher-paying job, getting a raise or starting a business on the side can help to offset your low credit score. You still won’t get the best rates on the market, but you’ll have a better chance of not being charged the lender’s highest APR.
Consider credit unions. Credit unions are often more willing than banks or online lenders to offer loans to people with bad credit. You can check out credit unions in your area or apply with one that lets anyone join.
Use the loan to improve your credit. Once you get a debt consolidation loan, make sure to pay on time every month, and pay more than the minimum if possible to get debt-free sooner. The positive information reported to the credit bureaus each month will help improve your credit score so that you can qualify for better terms on future financial products. It’s also a good idea to take a look at why you got into debt in the first place and adjust your spending habits if spending excessively was the main reason.

**Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).

The full range of available rates varies by state. A representative example of payment terms for a Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 21.58% and a 9.84% origination fee of $984, for an APR of 26.82%. In this example, the borrower will receive $9016 and will make 60 monthly payments of $275. APR is calculated based on 5-year rates offered in December 2023. There is no downpayment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.

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About the author

Grace Enfield

Grace Enfield covered personal loans for WalletHub. Grace graduated with honors and received a B.A. in Journalism and a minor in Digital Media Studies from the University of Minnesota - Twin Cities.

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Debt Consolidation Loans for Bad Credit FAQ

Comparing Personal Loans can be tough. But you've got the knowledgeable WalletHub community on your side. Other consumers have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not the financial institution's responsibility to ensure all posts and questions are answered.

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What credit score do I need for a debt consolidation loan?

Adam McCann, Financial Writer

You need a credit score between 580 and 680 to get a debt consolidation loan that offers reasonable rates with most lenders. The higher your credit score is, the lower your APR is likely to be - and the main purpose of a debt consolidation loan is to get a lower APR for your debt.

You can use WalletHub's free personal loan pre-qualification tool to see your debt consolidation loan options with your current credit score. That will make it easier to decide whether getting a debt consolidation loan is worthwhile. You can also see the minimum credit score required by the biggest personal loan providers below.

Credit Score Needed for a Debt Consolidation Loan by Lender

Lender	Credit Score Needed
SoFi	680
American Express	660
Discover	660
LightStream	660
Wells Fargo	660
Best Egg	640
Payoff	640
LendingPoint	620
LendingClub	600
Avant	580
Upgrade	580
Prosper	560
Upstart	300

Note: The credit scores in the table above are from either the lender or multiple third-party sources.

The best candidates to get a debt consolidation loan are naturally people with good or excellent credit. They can qualify for rates as low as 4.99% in some cases. That said, it is possible to get a debt consolidation loan with fair or bad credit, and it can make a lot of sense if your existing debts are things like payday loans, which charge extremely high fees and interest.

The most expensive personal loan APRs tend to be around 36%. If you assume that you will only qualify for a lender's maximum APR, and that will still save you a significant amount of money, then it's worth considering a debt consolidation loan even if you have a relatively low credit score.

Upvotes

Can you get a personal loan with a 500 credit score?

Rick Bormin, Personal Loans Moderator

Yes, you can get a personal loan with a credit score of 500 if you have a steady source of income and you choose the right lender. The best way to get a personal loan with a 500 credit score is to start by checking to see if you pre-qualify with major lenders, which will tell you whether you're eligible without affecting your credit.

If you don't pre-qualify, your best options may be to apply with a no-credit-check lender or...

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What is a hardship loan?

Grace Enfield, Content Writer

A hardship loan is a loan you take out in a time of serious financial need or to cover an unexpected shortfall, such as when you lose your job or get hit with medical bills. Some options to consider when you need a hardship loan include 401(k) loans, personal loans, home equity loans, and loans from friends or family.

Types of Hardship Loans to Consider in 2024

401(k) loans

You can take money...

Upvotes

Which type of loan can be used for debt consolidation?

Grace Enfield, Content Writer

The types of loans that can be used for debt consolidation are unsecured personal loans, secured personal loans and home equity loans. You can also use other methods to consolidate debt, such as a balance transfer credit card or a home equity line of credit.

Types of Loans Used to Consolidate Debt

Unsecured personal loans

An unsecured personal loan is the best way to consolidate debt because you do not have to put anything...

Upvotes

What are the best direct lenders offering debt consolidation loans for bad credit?

Adam McCann, Financial Writer

The best debt consolidation loans for bad credit from direct lenders include personal loans from Achieve Personal Loans, LendingPoint and Avant. All of these companies are direct lenders because they provide loan funds directly to their customers, rather than simply matching them up with other lenders (e.g. LendingClub). However, Achieve Personal Loans is the only one of the three that offers direct debt consolidation in the sense that it will send payments to your old...

Ask the Experts

To help people learn more about debt consolidation loans for bad credit, WalletHub's editors posed the following questions to a panel of experts. You can meet our panelists and read their responses below.

What advice do you have for people with bad credit who are in the market for a debt consolidation loan?
Do you think debt consolidation is a good move for someone with bad credit?

Sean Spence
Adjunct Professor of Finance, Costello College of Business – George Mason University
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Radhika Duggal
Adjunct Assistant Professor, New York University - Chief Marketing Officer at Super.com
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Matthew L. Jaramillo
Ph.D., M.B.A., Sr. Lecturer of Finance – Director of Chadwick Student Financial Advisors – Department of Economics and Finance, Nelson Rusche College Of Business – Stephen F. Austin State University
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Douglas Stives
M.B.A., C.P.A., Professor of Accounting at Monmouth University
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Mike Ozlanski
Ph.D., CPA, Allen C. Tressler Associate Professor of Accounting & Department Head – Sigmund Weis School of Business, Susquehanna University
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Elaine Luther
Professor of Business Management in the Rowland School of Business at Point Park University
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Important Disclosures

* We work hard to show you up-to-date product terms, however, this information does not originate from us and thus, we do not guarantee its accuracy. Actual terms may vary from the estimates. Before submitting an application, always verify all terms and conditions with the offering institution. Please let us know if you notice any differences.

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Best Debt Consolidation Loans for Bad Credit