Best Debt Consolidation Loans for Fair Credit in September 2025

With a debt consolidation loan, you can lower your monthly payments on existing debt and possibly get a lower interest rate as well, saving you money in the long run. But if you have fair credit, it’s not a sure thing that you’ll qualify for a debt consolidation loan. 

To help, we’ve compiled a list of the best personal loans for fair credit that you can use for debt consolidation and credit card refinancing. We’ll also provide tips on how to improve your application and lower your rate.

Compare loan rates for fair credit

Best debt consolidation loans for fair credit

What is a fair credit score?

Fair credit is defined as a FICO score between 580 and 669. FICO scores are commonly used by lenders to assess creditworthiness and whether you’re eligible for a loan. 

Here are the credit score ranges as defined by FICO.

Personal loan interest rates by credit score

Your credit score plays a key role in how lenders decide what interest rate you qualify for, along with your repayment term. In general, the better your credit, the lower the interest rate you’ll likely get — which means you’ll pay less in interest over the life of your loan.

Here are the average personal loan interest rates that Credible users prequalified for last month:

Check Out: Current Personal Loan Interest Rates

Debt consolidation rates for fair credit

Borrowers who had fair credit and were approved on the Credible personal loan marketplace received the following rates, on average, when loans were used for debt consolidation or credit card refinancing. 

Loan amounts for fair credit

Additionally, recent Credible borrowers who had scores in or near the fair credit range and were approved for debt consolidation loans or credit card refinancing received the following loan amounts, on average:

How to compare debt consolidation loans for fair credit

1. Find lenders that offer loans for fair credit.
2. Compare minimum credit score requirements.
3. Consider available loan amounts, repayment terms, and funding times.
4. Weigh lender pros and cons.
5. Prequalify to compare customized quotes.

Start by researching lenders that offer personal loans for fair credit. Many lenders share their minimum eligibility requirements, including credit score minimums, in the FAQ on their website or through personal loan marketplaces like Credible.

Next, make sure the lender’s minimum is below your credit score. You can get your free credit score using Credible’s credit monitoring tool if you don’t already have credit score access through your bank or credit accounts.

Once you have a list of lenders you might be eligible with, compare available loan amounts, repayment terms, and funding times. Also, consider whether they charge origination fees and how other customers rated them, using tools like Trustpilot and the Better Business Bureau (BBB). Many online review sites can give you a quick snapshot of each lender’s target audience as well as their pros and cons.

Once you’ve done this legwork, prequalify with the lenders that meet your criteria. (Or you could skip the prior steps and start with prequalification to eliminate lenders unlikely to approve your application.) Use a personal loan marketplace to prequalify or visit lender websites individually.

Prequalification provides estimates of the APRs, loan amounts, and repayment terms you might be eligible for, along with whether you’re likely to be charged an origination fee. It won't impact your credit score and only takes a few minutes, which makes it a great way to compare lenders. However, it’s not an offer of credit. You’ll need to apply to get a formal loan offer. This typically involves a hard credit check, which could temporarily ding your credit score — so only apply with lenders you’ve already prequalified with. 

Once you’ve gotten loan quotes, review them against each other to see which fits best and apply.

What is a debt consolidation loan for fair credit?

A debt consolidation loan lets you combine multiple debts into one, leaving you with one payment to manage — and, ideally, a lower interest rate overall. You can use a debt consolidation loan to consolidate and pay off various types of debt, including credit card debt, personal loans, medical bills, and more.

There are mainly two types of debt consolidation loans for fair credit: home equity loans and personal loans. The latter are one of the best options for many borrowers since they don’t require that you have home equity or use your home as collateral. Plus, you could get the money from a personal loan within days, unlike a home equity loan, which often requires weeks. Also, home equity loans typically involve closing costs, such as appraisal fees and document preparation fees, that could cost hundreds of dollars.

Related: What is Debt Consolidation?

How debt consolidation loans for fair credit work

You’ll receive a personal loan for debt consolidation as a lump sum after approval and can use the funds to repay your creditors. You may receive funds as soon as the same day you apply and are approved. Or you can elect to have the money sent directly to your creditors — often for a rate discount. 

Most debt consolidation loans are unsecured installment loans with fixed interest rates. This means your monthly payment is set and won’t change for the duration of the loan’s term.

Here are a few other common features of personal loans:

• APR range: 7% to 36%
• Loan amounts: $1,000 to $50,000 (or more)
• Repayment terms: Typically 2 to 7 years
• Fees: Origination fees, late fees, insufficient funds fees

Approval odds and rates depend on your credit profile, debt, and income. With fair credit, you're likely to be charged an origination fee, which could be up to 12% of the loan amount, depending on the lender and your credit.

Origination fees are often deducted from the loan amount upfront, reducing the amount available to pay off your debt.

Related: How Does Debt Consolidation Work?

Check Out: How Much of a Personal Loan Can I Get?

Pros and cons of debt consolidation loans

Debt consolidation loans often have the following pros and cons to consider.

Pros:

• Simplified payments: Consolidating multiple debts into one loan means you only have one monthly payment to manage.
• Lower payments: Debt consolidation can lower your monthly payments by extending the repayment term, lowering the interest rate(s), or both.
• Lower interest rate: Personal loans have lower interest rates than credit cards, on average, which makes them frequently used to consolidate debt. The average rate for a 2-year personal loan was 11.57%, according to the latest consumer credit report from the Federal Reserve, while credit cards averaged 21.16%.
• Fixed rates: Most debt consolidation loans are unsecured installment loans with fixed interest rates, providing predictable monthly payments. (Most credit cards have variable rates, which can adjust if interest rates rise.)
• Fast funding: You may receive funds as soon as the same day you apply and are approved, or have the money sent directly to your creditors.
• Direct payment to creditors: Some lenders offer a rate discount if you have the loan funds sent directly to your creditors instead of to your bank account.
• Could improve your credit: If you’re missing or making late payments because you can’t afford them, a lower overall monthly payment could help you make them on time. This could significantly improve your credit since payment history contributes 35% to your FICO score.
• Could reduce your credit utilization: Another factor in your credit score is how much of your available revolving credit you’re using. If you use the loan to pay off credit card debt, you could substantially increase that number and thereby increase your score. 

Cons:

• Origination fees: With fair credit, you're likely to be charged an origination fee, which could be up to 12% of the loan amount and is often deducted from the loan, reducing the amount available to pay off your debt.
• Could increase total interest costs: Extending the repayment term can lead to paying more interest over the life of the loan, even if the interest rate is lower.
• Credit score impact: Applying for a loan typically involves a hard credit check, which could temporarily ding your credit score.
• Approval isn’t guaranteed: Some lenders don’t offer loans to borrowers with fair credit. And even if they do, that doesn't guarantee you’ll be approved.
• High interest rates: Borrowers with fair credit may receive relatively high interest rates compared to those with good or excellent credit.
• It doesn't address underlying issues: If the root causes of debt problems are overspending and/or a lack of budgeting, debt consolidation won’t address them.

Learn More: Pros and Cons of Debt Consolidation

How to get a debt consolidation loan with fair credit

If you're ready to get a debt consolidation loan with fair credit, follow these four steps:

1. Prequalify: Don’t apply before you prequalify. This step helps eliminate lenders less likely to approve your application for debt consolidation.
2. Compare loan quotes: Compare multiple lenders to find the best loan based on the criteria most important to you. In addition to APR estimates, look at lender credit and income requirements, available repayment terms, and whether you’re likely to be charged an origination fee. 
3. Apply: Once you've chosen a lender, fill out a full application and submit any required documentation, such as tax returns or pay stubs.
4. Review the loan offer: If approved, the lender will send a formal offer for your review and signature. Make sure the loan amount, monthly payment, origination fee, repayment schedule, and APR are acceptable.
5. Await funding: Personal loans usually fund within one week — though some lenders can send money as soon as the same or next business day after approval. If you have the funds sent directly to your creditors, it could take longer, depending on the lender.

Check Out: How To Get a Debt Consolidation Loan

Methodology

Credible evaluated 32 lenders across 1,216 data points to find the best debt consolidation loans for fair credit. We chose the best lenders based on the following weighted categories:

• Rates and fees: 18.75%
• Eligibility and options for bad and no credit: 17.5%
• Availability: 12.5%
• Loan amounts and terms: 10%
• Customer satisfaction: 10%
• Customer service: 10%
• Efficiency and fund delivery: 10%
• Discounts: 7.5%
• Credible proprietary data: 3.75%

Credible’s team of experts gathered information from each lender’s website and from our partners directly. We also considered each of our partner lenders’ statistics over a 12-month period — including average funding times, average credit scores for approved applicants, and average rates. Each data point is verified by a senior editor to make sure it’s accurate at the time of publication. Learn more about how Credible rates lenders by exploring our personal loans lender rating methodology.