Best debt consolidation loans for bad credit
If you have bad credit, getting a personal loan for debt consolidation or any other purpose can be tough. But Universal Credit is one of the more likely lenders to approve your application since the minimum credit score required is 560 (firmly in “bad credit” territory). Plus, repayment terms up to seven years are available, which can make it easier to afford monthly payments — even if you're approved at a relatively high APR. Plus, once approved, you could get your loan funded as soon as the next business day.
But Universal Credit is not a good fit for all borrowers. If you’re looking for a loan over $50,000, can’t qualify without a cosigner, or have excellent credit, your needs may be better served by a different personal loan lender.
Best debt consolidation loans for bad credit
Universal Credit
4.3
Credible Rating
Est. APR
11.69 - 35.99%
Loan Amount
$1000 to $50000
Min. Credit Score
560
Pros and cons
More details
Universal Credit pros and cons
When deciding if getting a personal loan through Universal Credit is a good move for you, you’ll want to consider the following pros and cons:
Pros
- No prepayment penalty: You can pay off your loan early without paying a fee.
- Fast funding: Universal Credit can fund your loan within one day once your loan is approved.
- Low minimum loan amount: You can get a loan for as little as $1,000.
- Prequalifying won’t affect your credit: Universal Credit only does a soft inquiry into your credit history when you prequalify.
Cons
- No cosigners allowed: Without a cosigner, those with bad credit aren’t likely to qualify.
- Higher rates than competitors: With a high maximum APR (35.99%), bad credit borrowers might find better rates with another lender.
- High origination fee: Not only does Universal Credit charge an origination fee, but it could be as much as 9.99% of the total loan amount.
Check Out: Best Personal Loans With No Origination Fee
Pros
- No prepayment penalty
- Fast funding
- Low minimum loan amount
- Prequalifying won’t affect your credit
Cons
- No cosigners allowed
- Higher rates than competitors
- High origination fee
Standout features
- Low minimum loan amounts: If you need a small loan amount, Universal Credit lets you borrow as little as $1,000. In other words, you won’t have to pay interest on more money than you actually need.
- Fast funding: Universal Credit offers fast funding, with a one day turnaround time (or less) between loan approval and funds deposited in your account. That said, your loan payout could be delayed if Universal Credit has trouble verifying the documents you provided to them or your bank account.
- Personal loans for bad credit: The minimum credit score required is 560. This is much lower than most other competitors’ minimums, which are typically higher than 600.
Check Out: Best Fast Personal Loans
What to consider before applying
Before applying for a personal loan through Universal Credit consider the following:
- No cosigners allowed: Getting a cosigner is a common strategy that under-qualified borrowers use to get their loan approved. Unfortunately, Universal Credit doesn’t allow you to apply for a personal loan with a cosigner.
- High interest rates: Universal Credit’s interest rates are higher than many of its competitors, from 11.69%. If you have a less-than-favorable credit history, you may be able to find a better interest rate with one of Universal Credit’s competitors.
- Relatively short term limits: Universal Credit offers loan terms up to 60 months (5 years). Some competitors offer terms up to 7 years or longer.
Learn More: Short-Term Loan Options
How to qualify
In order to get a personal loan from Universal Credit, you’ll need to meet its qualifications:
- Be 18+ years old (19+ if in Alabama)
- Be a U.S. citizen, permanent resident, or in the U.S. with a valid visa
- Have a valid e-mail address
- Have a bank account that can be verified
- Have a minimum credit score of 560
How to get a personal loan
Universal Credit advertises a three-step process:
- Get a rate quote: You’ll answer a few questions, including loan details and basic personal information, which can generate a rate quote within minutes.
- Accept an offer: If you like the rate and terms offered, select the loan. From there, you’ll need to wait on final approval and any requests for additional documentation from Universal Credit.
- If approved, get funded: Once your loan is approved, it could be funded within one day.
It is important to note that you may need to submit documents to Universal Credit before it can officially approve your loan, including proof of identity and proof of income.
Learn More: How To Improve Your Personal Loan Application
How to contact Universal Credit
Through Universal Credit’s mobile app, you can manage your Universal Credit account 24/7. That said, its customer service team is also available to you via the following:
- Email: [email protected]
- Phone: (877) 418-9765
- Monday - Friday, 5 a.m. - 7 p.m. PT
- Saturday - Sunday, 6 a.m. - 5 p.m. PT
How Universal Credit compares to other lenders
We compared Universal Credit to other popular lenders for bad credit and fair credit so you can better see where the company excels, and where it doesn’t.
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How Universal Credit can improve
Like most lenders, Universal Credit has room to improve.
- Eliminate origination fees: Since other lenders offer loans without origination fees, good credit borrowers are more likely to seek them out instead of Universal Credit.
- Allow cosigners: By allowing cosigners, Universal Credit could approve more personal loans for bad credit borrowers.
- Increase repayment terms: Providing repayment terms longer than five years could make it easier for applicants with a high debt-to-income ratio (DTI) to qualify.
Universal Credit FAQs
What types of personal loans does Universal Credit offer?
Universal Credit only offers one type of personal loan, a fixed-rate loan with payment terms of three to five years. That said, personal loans can be used for almost anything other than repaying student loans, a down payment on a home, and business expenses.
How does a Universal Credit personal loan affect my credit?
Getting a rate quote from Universal Credit won’t have an effect on your credit. Should you accept a rate offer and proceed with an application, Universal Credit will run a hard inquiry that could negatively impact your score by a couple of points.
Can I repay a personal loan from Universal Credit early?
With no prepayment penalty, Universal Credit allows you to pay off your loan early and won’t charge you fees for doing so. Many personal loan lenders don’t charge prepayment penalties, but it’s always best to check the fine print.
Methodology
Credible evaluated the best personal loan lenders for fair credit based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, and fees. Credible’s team of experts gathered information from each lender’s website, customer service department, and via email support. Each data point was verified to make sure it was up to date.
Daria Uhlig has contributed to the reporting of this article.
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