Debt Consolidation Loans for Bad Credit in January 2024

Written by Alex Cook | Edited by Jessica Sain-Baird | Reviewed December 29, 2023

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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

Lender	User ratings	Minimum credit score	APR range	Repayment terms	Loan amount
	(2,680) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services.	580	9.95% - 35.95%	12 to 60 months	$2,000 to $35,000	See Offers
		640	11.72% - 24.67%	24 to 60 months	$5,000 to $40,000	See Offers
	(6,387) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services.	600	9.57% - 35.99%	24 to 60 months	$1,000 to $40,000	See Offers
	(1,877) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services.	660	7.99% - 35.99%	24 to 72 months	$2,000 to $36,500	See Offers
		Not specified	18.00% - 35.99%	24 to 60 months	$1,500 to $20,000	See Offers
	(3,619) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services.	560	6.99% - 35.99%	24 to 60 months	$2,000 to $50,000	See Offers
		580	8.49% - 35.99% (with autopay)	24 to 84 months	$1,000 to $50,000	See Offers
	(15,418) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services.	300	6.40% - 35.99%	36 and 60 months	$1,000 to $50,000	See Offers

As Avant reports to all three credit bureaus — Equifax, Experian and TransUnion — taking out a debt consolidation loan through this lender could help you increase your creditworthiness. Avant also funds your loan as quickly as the next business day so you won’t be waiting around very long.

Happy Money is transparent about its debt consolidation loan requirements, making the information easy to find on its website. For a Happy Money loan approval, however, you’ll need to make sure you have no delinquent payments and a credit score of at least 640. Happy Money doesn’t charge application or late fees, and its loans are specifically for those wanting to consolidate credit card debt.

LendingClub does not have a specific credit score requirement for its personal loans. Not only does LendingClub pay your creditors directly, but you may also receive your funds within 48 hours. Watch out for origination fees, which are deducted from the amount of money you receive from the lender.

LendingPoint gives consumers with scores of 660 and above an opportunity to qualify for a debt consolidation loan. However, keep in mind that if you have a lower credit score, you most likely won’t be eligible for LendingPoint’s lower APR rates.

OneMain Financial may be best for those seeking small loans, as its maximum loan amount is $20,000. This lender’s APR rates are also higher than many of the other lenders on this list — but they may be significantly lower than rates offered by predatory lenders.

Prosper is a peer-to-peer loan marketplace that funds loans quickly (as soon as one business day, in some cases). Relative to lending platforms, it has a wide range of possible APRs — but look out for origination fees, which take a small percentage of the loan upfront.

If your credit score isn’t quite up to par, Upgrade offers joint loan applications as well as secured loans. Consumers can apply for up to $50,000 and receive their money within one business day after being approved.

Borrowers interested in Upstart can borrow up to $50,000 and receive funds through its loan marketplace within one business day after they’ve been approved. Unfortunately, if your credit doesn’t quite meet the requirements, Upstart doesn’t offer joint loans.

Debt consolidation loans aren’t right for everyone, so consider debt consolidation loan pros and cons and ask yourself some questions about your debt payoff strategy.

Will the interest rate you receive be worth it? If you have serious credit problems, you’ll likely have trouble qualifying for a decent APR. Compare the interest rates on your existing debts with possible rates for debt consolidation loans. Loan prequalification lets you compare estimated APRs without hurting your credit score.

Do you have a debt payoff plan? Consolidation alone usually isn’t enough to help you achieve freedom from debt. But if you’re willing to follow a plan for how to get out of debt, a consolidation loan could help.

Can you avoid new debt? You don’t want to pay off your current debts with a consolidation loan and start racking up more debt. You’ll need to be 100% committed to avoiding new debt, or consolidation could snowball into a bigger money and credit problem down the road.

Unsecured debt consolidation loans aren’t your only option for getting out of debt — here are a few alternatives.

Credit counseling or debt management plan

If you’ve fallen into debt, you could contact a nonprofit credit counseling agency that helps people negotiate with creditors and creates a debt management plan. Those debt management plans simplify your monthly debt payment, much like a consolidation loan does.

Credit counselors often are an affordable option relative to financing your debt, but make sure you find a credit counselor that meets your specific needs. They can also help you create a budget and teach money management skills.

Home equity loan

Sometimes you can find better terms on debt financing if you can take out a secured loan, which uses collateral. With a home equity loan or home equity line of credit (HELOC), you can use your home to finance your new loan — but watch out, because nonpayment could mean foreclosure. Home equity loans tend to have better interest rates than debt consolidation loans.

Other secured loan

Home equity loans are one of many types of secured loans, which include collateral like cars, bank accounts and other valuable items. For debt consolidation, loans financed with cars or funds in a savings or investment account might have more favorable terms — but again, they come with serious risk. For example, failure to make debt payments on an auto title loan might make you lose your car.

401(k) loan

Some companies let you borrow from your 401(k). Interest rates and fees tend to be lower, but you can only borrow up to half of the vested amount or $50,000 (if the vested amount is higher). You might also have to pay the balance in full if you leave your job.

Balance transfer cards for credit card debt

Financing debt with a balance transfer credit will help you avoid paying further interest in the short-run and could wind up saving you some money. If you’re able to pay off the debt during the introductory period, which lasts between a year or two, you’ll pay 0% APR — but if you carry a balance past that, you’ll have to pay back interest and potential fees.

We reviewed more than 25 lenders that offer personal loans to determine the best debt consolidation lenders for bad credit. To make our list, lenders must offer competitive annual percentage rates (APRs). From there, we prioritize lenders based on the following factors:

• Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
• Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
• Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

LendingTree reviews and fact-checks our top picks on a monthly basis.