9 Best Bad-Credit Personal Loans for Debt Consolidation (Dec. 2023)

Personal Loans For Debt Consolidation

Being in debt can be a challenge, but having your debt spread out across multiple cards or loans, all with varying due dates and payment amounts, can be downright overwhelming. The more due dates you’re juggling, the more difficult it can be to ensure you remember them all each month.

And, with so many lenders available online today, it may be difficult to determine which ones can provide the best personal loans for debt consolidations. Using a personal loan for debt consolidation can (when done right) declutter your finances and make repaying your debt a goal that’s easier to reach. Depending on your credit profile and current obligations, you may even reduce the interest rate you’re being charged on your high-interest debt. Here, we take a look at some of our top options for consolidating debt with less-than-stellar credit.

Top Providers | How to Consolidate | Selecting a Lender

Top Personal Loan Providers for Bad Credit

When you have bad credit, finding a low-interest personal loan can be a challenge, particularly if you need an amount large enough to consolidate significant debt. However, the growth of online lending networks and digital banks means you can find a number of providers with low minimum credit scores from around the country — often in a few clicks.

Of course, it’s important to remember that your credit score won’t be the only factor in the decision when you apply for a personal loan. Even if you meet the minimum score requirement, lenders will look at your entire credit profile, including your payment history and outstanding debt, as well as your income and work history.

CashUSA.com isn’t a direct lender, so you won’t actually get the loan through its site. Instead, CashUSA is an online lending network with dozens of lending partners. You’ll fill out an application on CashUSA’s website to get matched with the best partner lender for your needs and qualifications.

Another online lending network, BadCreditLoans.com specializes in bad-credit borrowers, which means its network of lenders have no minimum credit score requirements, though your credit will still be a factor in determining how much you can borrow.

PersonalLoans.com is an online lending network with partners from all 50 states. The network has a wide variety of partners to serve a broad range of credit types. If you choose to accept a loan offer obtained through the network, you’ll be redirected to the lender’s website to complete the loan process.

4. Avant

Avant is an online lender (loans issued through WebBank) geared toward consumers with low to middling credit scores, with a minimum credit score requirement of 580 and an annual income requirement of $20,000. Loans can go up to $35,000, though the actual amount you’re offered, as well as the rate and term, will vary based on your credit profile and income.


  • Loan amounts from $2,000 up to $35,000
  • APRs from 9.95% up to 35.99%
  • Minimum credit score of 580
  • Minimum income of $20,000

Most borrowers will be charged an administration fee of 4.5% at the time the loan is issued that is automatically deducted from the loan. On the bright side, loans from Avant won’t have early payment fees, so you can make additional payments on your loan to pay it down faster.

5. Upstart

Upstart is an online lending network with a host of lending partners that operate through its Powered by Upstart SaaS platform, as well as peer-to-peer investors. Upstart has flexible credit history requirements and a minimum score requirement of 620.


  • Loan amounts from $1,000 up to $50,000
  • APRs from 7.74% up to 35.99% (variable)
  • Minimum credit score of 620
  • Minimum income of $12,000

In addition to meeting credit score requirements, borrowers also need a base annual income of at least $12,000. Loans can be obtained in amounts as high as $50,000, though applicants with scores near the minimum cutoff will be unlikely to obtain the largest amount. Some borrowers may be charged an origination loan of up to 8% at the time the loan is issued.

6. OneMain Financial

OneMain Financial is a direct lender that has been helping borrowers for more than a century. The lender has no minimum credit score requirement, nor does it has a set minimum income requirement. OneMain will consider your entire credit profile, income, and location when determining your loan offer.

OneMain Financial

  • Loan amounts from $1,500 up to $30,000
  • APRs from 16.05% up to 35.99%
  • No minimum credit score
  • Minimum income varies

OneMain charges no prepayment fee for paying off your loan early, but some borrowers may be charged a one-time origination fee at the time of issuance. Repayment periods tend to be between two and five years, though your exact terms may vary.

7. LendingClub

LendingClub is one of the original online peer-to-peer lending networks that allows individual consumers to invest in and fund loans issued to other consumers. Borrowers are required to have a minimum credit score of at least 600 and a credit history of at least three years.


  • Loan amounts from $1,500 up to $40,000
  • APRs from 6.95% up to 35.99%
  • Minimum credit score of 600
  • Minimum 3 years of credit history

Each loan is graded according to the financial risk, with high-risk loans receiving lower grades. The rate a loan is offered will depend on its score. The origination fee charged for a LendingClub loan will also vary based on its score, with a fee as high as 6% possible for some borrowers. Payments made by check may also incur a check processing fee.

8. LendingPoint

LendingPoint offers personal loans to consumers with credit scores in the 600s, with a minimum score of 600 required for approval. Borrowers will also need a U.S. bank account and a verifiable annual income of at least $20,000, with a debt-to-income ratio of 35% or less.


  • Loan amounts from $2,000 up to $25,000
  • APRs from 15.49% up to 35.99%
  • Minimum credit score of 600
  • Minimum income of $20,000

LendingPoint charges no penalty fee for prepaying your loan, but some borrowers may be charged an origination fee of up to 6% when their loan is issued. LendingPoint operates in most states, but not all, so be sure to check the lender’s site before applying.

9. Credit Unions

Local credit unions are always great options for finding low-interest loans, especially if you have a credit profile that may make mainstream lenders less-than-excited to offer you a loan. Most people are within range of at least one credit union, and you can search for a local credit union online through the Credit Union Locator tool provided by the National Credit Union Administration.

Credit Unions

  • Loan amounts from $500 up to $50,000
  • APRs from 3.00% up to 35.99%
  • Minimum credit score will vary
  • Minimum income will vary

Credit unions typically have lower rates than most banks and online lenders, as well as usually having flexible credit requirements. You’ll need to become a member of a credit union before you can obtain a loan, but residency in the credit union’s service area is typically enough to qualify you for membership.

How to Consolidate Debt

According to a study on personal loans, more than one-third of people who are approved for a personal loan intend to use the funds to consolidate existing debt. And for good reasons; a well-executed consolidation can both organize your debts and reduce the amount of interest you’re being charged for them.

But, a poorly executed consolidation may do little more than shuffle your debt around — or, worse, wind up costing you more money than you would have paid without consolidation. This is particularly likely when your credit keeps you from finding a loan with a good interest rate.

The key to a successful consolidation is to know what you need before you start looking for a loan. This means listing out all of the debts you wish to consolidate — this can be credit cards as well as other small loans — including making notes of the balances and APRs.

For example, suppose Hypothetical Harry needs to consolidate a few credit cards and an old loan with a small remaining balance. Harry’s debt list might look like the table below:

Hypothetical Debt List

With your debts laid out, you’ll need to determine the size of loan you need and the APR you should target. The loan should be large enough to cover the total debt you need to consolidate, plus any origination or administration fees that you will be charged by the lender. These fees typically range from 3% up to 8% of the loan amount and are usually deducted from the loan at the time of issue.

In Harry’s case, this would mean a total of $7,588 to cover his balances, plus between $228 and $607 to cover the origination fee, depending on the amount charged by his specific lender and loan offer.

So far as APRs are concerned, the goal is to consolidate your debt into a single loan with a lower APR than you were being charged before. At the very least, be sure you’re not increasing your APR, as that would result in paying more interest fees than you should.

For example, if Harry can obtain a new loan with an APR below 16.09%, then he can consolidate all four of his debts at a lower interest rate. However, if Harry can only qualify for a loan with an APR of 20%, he should consider consolidating only the credit cards to avoid paying more for his existing loan than he would otherwise.

How to Select a Lender & Loan Offer

Whether you use an online lending network to compare offers or do it by hand through direct lenders, you’ll typically want to shop around a bit to ensure you’re getting a fair deal on your loan. Even if your credit needs some work, the current subprime marketplace has enough lenders that you’ll likely have several offers to consider.

In most cases, you can tell if an offer will suit your needs at a glance; it should include both the total amount, the interest rate, and any fees right in the offer. Once you’re down to just the offers that meet your needs, you’ll need to investigate each lender and offer further to find the best one.

Generally, the interest rate and fees will be the deciding factor for most borrowers. Even a few points of interest can make a big difference to the cost of your loan, especially for larger loans repaid over several years. For example, a $10,000 personal loan repaid over five years will cost a total of $4,274 in interest fees at 15%, and a total of $5,896 at 20%.APR Impact on Personal Loans

Another important thing to consider when consolidating debt is how long you want your loan repayment term to extend. The longer you take to repay your loan, the smaller you can make your monthly payments, but the more you’ll pay for your debt overall due to additional interest fees for the extra time.

Finally, don’t forget to do some research into the lender itself in addition to the loan offer. Personal loans can have repayment terms as long as six or seven years — which is a long time to deal with a lender that isn’t reliable or that operates under shady business practices.

As such, before you make a deal with any financial institution, it’s important to do your due diligence. Look for consumer reviews from actual customers and read up on what other industry experts say about the lender to get an idea of the company’s reputation. Third-party review sites, such as the Better Business Bureau and Consumer Affairs, can also be helpful resources.

Get a Handle on Your Debt with Consolidation

No matter how well-organized you are, the more things you need to keep track of, the more likely you are to lose track of one or two of them from time to time. And, when you’re not so organized, the chances of missing an important date or deadline increases exponentially.

So, when you have multiple debts, with multiple due dates and minimum payments to track, you’re far more likely to make a mistake — like forgetting a payment — than if you only have a single debt to track and pay. The ability to simplify your debts is just one of the reasons many consumers consider using a personal loan for debt consolidation.

Of course, that’s not the only reason to consolidate — or, even, the primary one. No, the main reason to consolidate your debt is to make it more affordable to repay, typically by reducing the amount of interest you pay. A successful consolidation loan will not only pay off your existing debt, but it will do so at a lower rate, without extending the time it takes to repay your debt.

As useful as consolidation can be, however, it isn’t the right path for everyone. Consumers with particularly poor credit may be better off making on-time payments for a while to boost their credit scores before attempting to consolidate. A higher credit score will generally mean a lower interest rate, which is, after all, the main point of consolidation.

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