Best Debt Consolidation Loans for Bad Credit

Upgrade is an online lender that offers personal loans for debt consolidation, with a very low minimum recommended credit score of just 560. You can also apply with a co-applicant, which can increase your chances of qualifying if you have bad credit.

You can apply for Upgrade loans online or over the phone, and the lender offers prequalification so you can check your rates without affecting your credit score. Loans may be funded as soon as the next day, and can be paid directly to your creditors.

Borrowers are charged an origination fee on all personal loans, which can be as high as 9.99% and is deducted from the total loan amount; this is fairly normal for bad-credit loans. Upgrade has over 37,000 Trustpilot reviews, with most of them rating Upgrade five stars, stating excellent service and great rates. 

LendingClub has been around since 2006, making it one of the oldest and most established online lenders around. Originally a peer-to-peer lending platform, LendingClub now offers normal personal loans for a variety of uses, including debt consolidation. LendingClub loans are available up to $40,000, with terms from 24 months up to 60 months in length.

Like many lenders, LendingClub offers an online prequalification tool that allows you to see your rates without a hard credit pull. And funds can be sent directly to your creditors to pay off your debts quickly, so you won’t be tempted to spend the funds on anything else.

Rates may be expensive if you have poor credit, but co-borrowers are allowed to help you qualify. There is a 3% to 6% origination fee on each loan, depending on your credit and financial profile.

Overall, LendingClub is one of the more established and trusted lenders in the marketplace, with an “Excellent” 4.8 score on Trustpilot (out of 5).

OneMain Financial offers secured loans for debt consolidation, which can help borrowers get approved for a loan even with bad credit. Secured loans require collateral, such as an automobile, which helps guarantee the loan in the case of non-payment. A secured loan can be a good alternative if you don’t have a co-signer to help you qualify (although OneMain does allow co-applicants).

OneMain offers loans from $1,500 up to $20,000, and will pay off your creditors directly, making it simple to consolidate and close out your other debt accounts.

OneMain Financial charges an origination fee, which can be up to 10% of the loan amount (or $500), which may be expensive. There are also late payment fees which can amount to 15% of the total payment, which is very high compared to most lenders.

OneMain Financial is available in most states, but is not available in Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island, Vermont, or Washington, D.C.

Overall, OneMain Financial is a good option for secured loans if you have no other way to qualify. Just make sure the rates and fees make sense compared to your current debts before signing the agreement.

Avant offers debt consolidation personal loans to borrowers with poor credit, with a recommended credit score minimum of only 550. The loan can be disbursed fast, too, with next-day funding available to qualified borrowers who complete their application by 4:30 p.m. Central Time Monday to Friday.

Avant offers loans from $2,000 up to $35,000, with loan repayment terms from 12 to 60 months in length. Interest rates are average, though they can go up to 35.99%. And unfortunately, co-applicants are not allowed.

Avant will not pay off your creditors directly when consolidating your debt, so you will need to arrange payoff with each of them. And there is an origination fee of 4.75% assessed on all loans, so make sure to account for this when borrowing. 

First Tech Federal Credit Union is a national credit union that offers debt consolidation loans with no fees and same-day funding. First Tech also works with borrowers with poor credit, with a minimum recommended credit score of 600 to qualify.

First Tech personal loans start at only $500, making them ideal for paying off smaller debts. Loan terms are available from 24 to 84 months in length, though rates are higher for longer-term loans. Membership is required to qualify for a loan with First Tech, but it’s easy and inexpensive to join (free for some).

First Tech FCU is available in all 50 states and Washington, D.C., and offers some of the lowest rates on debt consolidation loans. Both unsecured and secured personal loans are available, and co-signers are allowed as well, giving you more ways to qualify.

Overall, if you’re already a member, or want to become a member to gain access to loans with low rates and flexible terms, First Tech FCU is a great option.

Upstart is a popular online lending platform for borrowers with very low credit scores, with a minimum 300 credit score to qualify. Since this is the lowest score possible, this means that anyone with a credit history has a chance. Prequalification is available, and can be completed in a few minutes without hurting your credit score.

Upstart considers more than just your credit score, evaluating your credit history, income, employment history, and other factors. Even if you have a poor credit score, if you have a job or regular source of income (or are starting a job soon), you may be able to qualify for a personal loan from Upstart. You can’t apply with a co-signer, unfortunately.

But don’t expect to save money on fees, as Upstart loans come with an origination fee up to 10%, and the maximum interest rate is relatively high. But if you are consolidating credit card debt or other high-interest loans, you still may be able to save some money. Upstart is available in most states, except for West Virginia and Iowa.

LendingPoint offers debt consolidation loans with low fees and flexible repayment terms. Loans are available from $2,000 up to $36,500, and the origination fee may be waived for certain applicants. LendingPoint also charges no application fees and there is no prepayment penalty, so you can pay off the loan early at no charge.

LendingPoint does not support co-signers or co-applicants, so you will need to qualify on your own. LendingPoint doesn’t disclose its minimum credit score, but the income required is only $35,000 annually.

Borrowers get access to some benefits that most lenders don’t offer, as well, like credit score monitoring and credit tips. Overall, LendingPoint offers potentially low fees for debt consolidation loans, but check your proposed terms to make sure you’ll get a low (or no) origination fee.

Universal Credit (powered by Upgrade) offers personal loans that allow a co-signer, making it easier to qualify and get better rates when consolidating your debt. Loans start at $1,000, and next-day funding is available as well so you don’t waste any time.

Universal Credit offers flexible repayment terms from 24 months up to 84 months in length, and interest rates are fixed. Interest rates aren’t the greatest, but with a co-signer, you may be able to qualify for a rate as low as 11.69%.

The origination fee starts at 5.25%, but unfortunately you’ll typically need to pay such a fee if you have poor credit. But if you apply with a creditworthy co-signer, you may get the lowest possible fee.