The best debt consolidation loans for bad credit help you pay off multiple debts at once while saving money on interest.
Checking rates is free and won't impact your credit score.
Best for thin credit
6.70 - 35.99%
$1K - $75K
None
3 to 5 years
Best for multiple rate discounts
2025 NerdWallet award winner
7.74 - 35.99%
$1K - $50K
600
2 to 7 years
Best for fast funding
11.69 - 35.99%
$1K - $50K
560
3 to 5 years
Best for low income requirement
9.95 - 35.99%
$2K - $35K
550
2 to 5 years
Best for secured debt consolidation loan
6.99 - 35.99%
$2K - $50K
600
3 to 5 years
Our team of consumer lending experts follows an objective and robust methodology to rate lenders and pick the best.
30+
Lenders reviewed
We review over 35 lenders, including major banks, top credit unions, leading digital platforms, and high interest installment lenders operating across multiple states.
25+
Categories assessed
Each lender is evaluated across five weighted categories and 27 subcategories, covering affordability, eligibility, consumer experience, flexibility, and application process.
60+
Data points analyzed
Our team tracks and reassesses hundreds of data points annually, including APR ranges, fees, credit requirements, and borrower tools, ensuring up to date, accurate comparisons.
We evaluate more categories than competitors and carefully weigh how each factor impacts your experience.
NerdWallet’s review process evaluates and rates personal loan products from more than 30 financial technology companies and financial institutions. We collect over 60 data points and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
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When you’re trying to pay off high-interest debt, it’s normal to have less than stellar credit.
The good news is you can still qualify for a debt consolidation loan even if you have bad credit (any score from 300 to the high 500s).
The online lenders we’ve chosen offer debt consolidation loans specifically to borrowers with lower credit scores. These loans help you pay off unsecured debts like credit cards, medical bills and payday loans with less interest, so you can get out of debt faster and save money.
NerdWallet rating: 5/5 stars.
Minimum credit score required: 600.
APR range: 7.74% - 35.99%.
Loan amounts and terms: Upgrade personal loans range from $1,000 to $50,000 and can be repaid over two, three, four or five years. For loans over $15,000 that are secured by a home fixture, you may qualify for terms up to seven years.
Why we chose Upgrade for multiple rate discounts: One of the biggest challenges facing borrowers with bad credit is finding a debt consolidation loan with a rate that’s lower than the rate of your current debts. Upgrade makes it easier by offering three potential rate discounts: for setting up autopay, for sending the loan proceeds directly to your creditors and for customers with multiple Upgrade products. Few lenders offer this many discounts, and getting even one could save you hundreds of dollars in interest, depending on the details of your loan.
» LEARN MORE: Full review of Upgrade personal loans
NerdWallet rating: 4.5/5 stars.
Minimum credit score required: None.
APR range: 6.70% - 35.99%.
Loan amounts and terms: Upstart personal loans range from $1,000 to $75,000 and can be repaid over three, four or five years.
Why we chose Upstart for borrowers with thin credit: Upstart is unique among the personal loan lenders that we review, because it doesn’t rely as much on your creditworthiness to qualify you. Instead Upstart looks at alternative data, like college education and work experience, and it even accepts borrowers that don’t have enough credit history to generate a credit score. If you do have a credit score, Upstart says its minimum requirement is 300, meaning it basically doesn’t have one. Upstart says this approach helps it approve more borrowers at lower rates compared to other lenders.
» LEARN MORE: Full review of Upstart personal loans
NerdWallet rating: 4.5/5 stars.
Minimum credit score required: 560.
APR range: 11.69% - 35.99%.
Loan amounts and terms: Universal Credit personal loans range from $1,000 to $50,000 and can be repaid over three, four or five years.
Why we chose Universal Credit for fast funding: When you’re ready to start the journey to becoming debt-free, you don’t want to lose momentum waiting a week or longer to get your debt consolidation loan. According to Universal Credit, it offers loan approvals in under five minutes, and the funds are typically available in your account in one business day. That means you’ll go from application to funding in as little as 24 hours, which is lightning-fast even for an online lender.
» LEARN MORE: Full review of Universal Credit personal loans
NerdWallet rating: 4.5/5 stars.
Minimum credit score required: 600.
APR range: 6.99% - 35.99%.
Loan amounts and terms: Best Egg personal loans range from $2,000 to $50,000 and can be repaid over three, four or five years.
Why we chose Best Egg for secured debt consolidation loans: Another way to improve your chances of getting a debt consolidation loan with bad credit is to secure the loan with collateral. This helps “guarantee” the loan, so it makes it easier to get approved and receive a lower rate. Best Egg lets borrowers secure their personal loan with a car or a permanent home fixture, like built-in cabinets or bathroom vanities. One thing to keep in mind, though: If you fail to repay the loan, the lender can seize the collateral, so only take out a secured loan if you’re sure you can repay it.
» LEARN MORE: Full review of Best Egg personal loans
NerdWallet rating: 4/5 stars.
Minimum credit score required: 550.
APR range: 9.95% - 35.99%.
Loan amounts and terms: Avant personal loans range from $2,000 to $35,000 and can be repaid over two, three, four or five years.
Why we chose Avant for low income requirement: In addition to looking at your credit score and credit history, personal loan lenders typically have a minimum income requirement that can be just as hard to meet as the credit score requirement. Avant stands out for its leniency — it only requires a monthly net income above $1,200 to qualify for a personal loan. Paired with its particularly low minimum credit score requirement (550), it’s a strong option for borrowers who are worried about meeting the qualification criteria.
» LEARN MORE: Full review of Avant personal loans
Debt consolidation loans come in loan amounts ranging from $1,000 to $50,000.
You can apply for a loan online, and once you’re approved and receive the funds, you use that money to pay off all your existing debts in one go.
Now you’re left with a single monthly payment on your new loan. This simplifies the debt payoff process, since you’re no longer juggling multiple payments and due dates. Debt consolidation loans have fixed interest rates, too, so you’ll make the same payment each month.
Repayment periods on debt consolidation loans range from two to seven years. There’s typically no prepayment penalty for paying off your loan early.
As long as you qualify for a lower annual percentage rate, or APR, than the average rate you’re currently paying across your debts, it makes sense to consolidate.
A debt consolidation calculator is the best way to figure this out. You can plug in all your existing debts in one place and get a personalized overview, including the combined interest rate. You’ll want a debt consolidation loan with a lower rate than this number.
Current monthly payment$1,000
Current monthly payment
New monthly payment$554
New monthly payment
With an excellent credit score, we estimate a 11.81% APR for a 5-year personal loan.
Let’s say you have $12,000 in credit card debt, spread out across three different credit cards.
The average annual percentage rate on a credit card is about 23%. If you’re making a minimum payment of $85 on each card, at 23% APR, it’ll take you over 10 years to be debt-free. It will also cost you over $19,000 in interest, on top of the original debt.
But if you pay off all your credit cards at once using a $12,000 debt consolidation loan, at 22% APR, you’ll save $7,500 on interest. You’ll have a similar monthly payment amount (about $25 more), and you’ll get out of debt three years earlier with a seven-year repayment term.
Compare the pros and cons below to get a fuller picture of debt consolidation loans.
» COMPARE: The best debt consolidation loans for any credit score
What the nerds think
How can you tell if a debt consolidation loan will actually help you or just dig you deeper into debt?
“I think it’s important to consider why you first got into debt. Did you have a period of unemployment or get hit with a major unexpected expense? These are one-off setbacks, and a debt consolidation loan can help you put that debt behind you for good. But if you’re in debt because you chronically overspend, or you simply don’t make enough money to cover your monthly obligations, I’d avoid taking out a loan. Instead, consider other ways to get out of debt, like a debt management plan. These are explored lower down.”
Though the rate you get depends on the lender and the details of your loan application, borrowers with bad credit can expect an average personal loan rate of about 22%, according to NerdWallet rate data. As long as the rate you get is lower than your current debts, you’ll still save money with a debt consolidation loan.
Borrower credit rating | Score range | Estimated APR |
|---|---|---|
Excellent | 720-850. | 11.81%. |
Good | 690-719. | 14.48%. |
Fair | 630-689. | 17.93%. |
Bad | 300-629. | 21.65%. |
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified through NerdWallet from January 1, 2024, through December 31, 2024. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below 500 — are unlikely to qualify. Information in this table applies only to lenders with maximum APRs below 36%.
Many lenders offer debt consolidation loans for borrowers with bad credit, and you don’t need to do anything other than apply. But if you want to boost your approval chances even higher — and get the lowest rate possible — these three tips can help.
Before you apply for a debt consolidation loan, start by paying down any small debts, if possible. This lowers your debt-to-income ratio, which can help quickly build your score. You can also check your credit report for errors (more common than you think) and file a dispute.
Applying for a co-signed or joint loan, especially if the co-borrower has a better credit score or higher income than you, can majorly improve your chances of getting approved. This needs to be a person you trust, since they may have access to the loan funds, and they’ll be equally on the hook for repayment.
Applying for a secured loan, in which you pledge collateral like your car or savings account to help guarantee the loan, is another way to boost your application. This makes the loan less risky for the lender, so they’re more likely to approve or give you a lower rate. But keep in mind that if you fail to repay the loan, the lender can seize the collateral.
Knowing the amount of debt you’re carrying tells you the loan amount you need to apply for.
If you haven’t already, use NerdWallet’s debt consolidation calculator to list out all your existing debts. You can also view your combined interest rate. Keep both these numbers in mind as you shop for the best debt consolidation loan.
If you have bad credit, it’s particularly important to compare interest rates and terms from multiple lenders in order to get the best deal on your debt consolidation loan. The easiest way to do that is through a process called pre-qualification.
Pre-qualifying just means filling out a short application submitting to a soft credit check, which won’t hurt your credit score. You can then view your estimated rate with that lender. Almost all online lenders offer pre-qualification.
» MORE: Pre-qualify with multiple lenders for free on NerdWallet
Once you’ve pre-qualified and chosen a lender, it’s time to officially apply for the loan. Most applications are online, and you’ll be asked to provide personal information. This may include your Social Security number and any required documentation that verifies your identity, income and employment.
Many lenders can make an immediate approval decision, though some may take a few business days to get back to you.
» MORE: How to get a personal loan
Once you’re approved, you’ll receive the loan agreement, which you can usually sign electronically. Read any documents carefully before signing.
Lenders can deposit the funds directly into your checking account, though some may offer direct payment to creditors, which means the lender pays off your creditors for you, simplifying the process — and eliminating any temptation to use the cash for something else.
Though funding time varies, many online lenders offer same-day and next-day funding.
Once you receive the funds in your account, use them to pay off your debts. If the funds are being sent to your creditors for you, confirm with each creditor that your debt was successfully paid off.
Next, make a plan to manage your loan, which may include building a budget that prioritizes your new monthly payment and keeping an eye on any refinancing opportunities.
Most lenders charge a late fee for missed payments — and report them to the credit bureaus, which can hurt your score — so consider setting up automatic payments to avoid falling behind.
If you weren’t approved for a debt consolidation loan, or simply want to explore your options, the payoff methods below can help you eliminate debt, too.
If you’d like help with tackling your debt, credit counseling is a fantastic resource. Credit counselors at a reputable non-profit can help negotiate a better rate on your debts and put you on a debt management plan. These plans help you get out of credit card debt in three to five years and come with only small monthly fees.
You can also take a do-it-yourself approach to paying off debt with two time-tested strategies: the debt snowball or the debt avalanche method.
With the debt snowball method, you tackle your smallest debt first and then work your way up, building momentum as you go. With the debt avalanche method, you tackle your most expensive debt first, meaning the one with the highest interest rate, and apply your savings to the next highest and so on.
Debt settlement is the process of settling your debts for less than you owe, usually with the help of a debt settlement company. This company will ask you to stop making payments on your debts and instead funnel that money into a holding account.
Once a debt is significantly overdue, the settlement company will approach your creditor with a settlement offer, using the money in the holding account. Debt settlement is risky, though, and there’s no guarantee of success, so explore alternatives first.
If you have significant debt (more than 40% of your income) and you don’t think you can pay it off within five years, bankruptcy is another option. This wipes out most unsecured debts, but it’s hard on your credit score. Consider alternatives first.
» COMPARE: More options for debt relief
Some online lenders have no minimum credit score requirement and will use alternative data, like your college education or work experience, to help qualify you for a debt consolidation loan. Upstart is a good example.
Most of the lenders featured above have a credit score requirement below 600. If you’re worried about qualifying, small steps make a big difference in boosting your score. Consider paying off a small debt before you apply for a loan, as well as disputing any errors on your credit report.
If you stumble on a lender that implies credit approval no matter what, steer clear. This is likely a predatory lender that charges triple-digit interest rates on installment loans. Reputable lenders conduct a hard credit check before deciding whether to approve you and won’t charge more than 36% APR.
A credit card consolidation loan is just another name for a debt consolidation loan. Many people use debt consolidation loans to pay off multiple credit card balances, which is why it’s sometimes called a credit card consolidation loan. Online lenders offer these loans to borrowers even if they have bad credit, but you may need to shop around to find the lowest rate.
If you have bad credit and use a debt consolidation loan to successfully pay off your debts, your credit score should grow. That’s because you’re lowering your credit utilization ratio (as long as you limit debt in the future) and building a history of on-time payments. But when you first apply for the loan, your credit score may take a small hit. This is normal when applying for new credit.
