Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."
A debt consolidation loan is a type of personal loan that lets you combine multiple debts and leaves you with just one payment. You might also be able to get a lower interest rate compared to your old debts, which could help you save money and maybe pay off your debt faster.
You’ll typically need good to excellent credit to qualify for a debt consolidation loan — but there are a few strategies that could help you get approved even with poor credit.
Here are three ways to get debt consolidation loans for bad credit:
1. Check your credit history
Lenders will review your credit to determine your creditworthiness. This is why it’s important to check your credit history to make sure it’s as strong as it can be.
You can use a site like AnnualCreditReport.com to access your credit reports from each of the three credit bureaus — Experian, Equifax, and Transunion — for free.
If you find any errors in your credit report, make sure to dispute them with the appropriate credit bureaus to potentially give your credit score a boost. The more you can clean up your credit history, the better your chances of qualifying for a debt consolidation loan.
You can compare your prequalified rates from Credible’s partner lenders below in two minutes. This includes some lenders that offer personal loans for poor or fair credit.
Learn More: Where to Get a Personal Loan
2. Compare loan rates
There are a wide variety of lenders that offer personal loans for debt consolidation, and each of them has its own loan amounts, terms, and fees. Be sure to do your research and compare loan rates from as many lenders as possible to find the right loan for you.
Keep in mind that if you have poor credit, you likely won’t qualify for the lowest rates available. However, comparing lenders can still help you find the best rate for your circumstances.
Here are Credible’s partner lenders that offer debt consolidation loans for bad credit:
|Lender||Fixed rates||Loan amounts||Min. credit score||Loan terms (years)|
|9.95% - 35.99% APR||$2,000 to $35,000**||550||2, 3, 4, 5*|
|4.99% - 35.99% APR||$5,000 to $35,000||600||2, 3, 4, 5|
|6.99% - 24.99% APR||$2,500 to $35,000||660||3, 4, 5, 6, 7|
|7.04% - 35.89% APR||$1,000 to $40,000||600||3, 5|
|15.49% - 35.99% APR||$2,000 to $36,500||580||2, 3, 4|
|2.49% - 19.99% APR||$5,000 to $100,000||660||2, 3, 4, 5, 6, 7
(up to 12 years for home improvement loans)
|6.99% - 19.99% APR1||$3,500 to $40,0002||660|
(TransUnion FICO®️ Score 9)
|3, 4, 5, 6, 7|
|18.00% - 35.99% APR||$1,500 to $20,000||None||2, 3, 4, 5|
|5.99% - 24.99% APR||$5,000 to $40,000||600||2, 3, 4, 5|
|5.99% - 17.99% APR||$600 to $50,000 |
(depending on loan term)
|670||1, 2, 3, 4, 5|
|6.95% - 35.99% APR||$2,000 to $40,000||640||3, 5|
|8.93% - 35.93% APR7||$1,000 to $50,000||560||3, 5|
|5.94% - 35.97% APR||$1,000 to $50,000||560||2, 3, 5, 6|
|6.46% - 35.99% APR4||$1,000 to $50,0005||580||3 to 5 years4|
- 13 Best Debt Consolidation Loans for Fair Credit
- Debt Consolidation vs. Personal Loan: What Is the Difference?
3. Improve your debt-to-income ratio for better rates
Lenders look at your debt-to-income (DTI) ratio to see how much of your income goes toward debt. To calculate your DTI ratio, add up all of your monthly bill payments, then divide that by your monthly income.
There are a couple of ways you might be able to improve your DTI ratio:
- Increase your income. The more money you make, the less of your total income you have to put toward debt. If you want to boost your income, you might consider asking for a raise or starting a side hustle.
- Reduce your debt. Paying down some of your debt could help show lenders that you can afford a new debt consolidation loan.
It’s also important to consider how much a debt consolidation loan will cost you over time. This way, you can prepare for any added expenses. You can estimate how much you’ll pay for a loan using our personal loan calculator below
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
Need a personal loan?
Compare rates without affecting your credit score. 100% free!
Checking rates won’t affect your credit score.
Check Out: Credit Card Consolidation Loans
Alternatives to debt consolidation loans
If you don’t qualify for a debt consolidation loan, here are some other options to look into:
Speak with your lenders
If you’re facing financial difficulties, reach out to your lenders and other creditors right away. They might offer hardship assistance, payment plans, or other options that can help you avoid missing payments and hurting your credit.
Home equity loans
A home equity loan could be another way to consolidate debt if you’re a homeowner. This type of loan lets you tap into your home’s equity while using your home as collateral.
If you’re considering a home equity loan vs. a personal loan, note that home equity loans tend to have lower rates than personal loans because there’s less risk to the lender.
This might also make it easier to qualify for a home equity loan even if you have poor credit — though remember that each lender will have its own eligibility requirements.
Check Out: Where to Get a $10,000 Personal Loan
Sign up for a debt management plan
Nonprofit credit counseling agencies can help you tackle your debt through a debt management plan. These plans generally last for three to five years and are available to anyone who has debt, regardless of the amount.
If you sign up for a debt management plan, the agency will work on your behalf to contact your lenders and negotiate a payment plan. You’ll make monthly payments to the agency, which will send the appropriate funds to your creditors.
A debt management plan might also lower any fees or finance charges you’ve been charged. Note that some plans might charge setup fees or monthly fees, depending on the agency.
Learn More: How to Get Out of Credit Card Debt Fast
Unlike debt management plans, debt settlement is offered by for-profit companies that try to settle outstanding debts with your creditors for less than you owe.
Many debt settlement companies will tell you to stop paying your bills while the settlement process is pending. This means you could rack up late fees and potentially hurt your credit, making it hard to borrow in the future.
Also keep in mind that debt settlement might not actually work, and you could end up hurting more than helping your finances in the long run. Be sure to consult with an attorney or financial advisor first before taking this route.
Check Out: Where to Get a $20,000 Personal Loan Fast
If you’ve exhausted your other options, filing for bankruptcy could help you take control of your debt.
Keep in mind that bankruptcy is extremely damaging to your credit and will stay on your credit report for up to 10 years, depending on which type of bankruptcy you choose. Because of this, bankruptcy should be a last resort.
Learn More: How to Pay Off Credit Card Debt Fast
A debt consolidation loan could be the first step to financial recovery
With a debt consolidation loan, you can combine multiple debts and have just one monthly payment to deal with. Plus, you might qualify for a lower interest rate than you’ve been paying, which means you could save money and potentially pay off your debt faster.
If you decide to use a personal loan for debt consolidation, remember to consider as many lenders as possible to find the right loan for your needs. Credible makes this easy — you can compare your prequalified rates from multiple lenders in two minutes.
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.99-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.