Americans owe an average of $104,755 in debt, not including home loans. If you're having trouble paying your bills, a debt consolidation loan can organize multiple debts into a single monthly payment at a fixed rate.
Those with less-than-stellar credit, however, have a harder time qualifying for a debt consolidation loan. Even if you do get approved, exorbitant rates and sign-up fees can land you even deeper in debt.
We've compared dozens of lenders to determine the best debt consolidation loans for borrowers with bad credit, looking at credit score requirements, interest rates, fees, repayment terms and other factors. Read our methodology to learn how we made our picks.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Freedom Debt Relief has resolved over $20 billion in outstanding debts since 2002. It offers free credit card debt relief consultations.
According to National Debt Relief, clients who complete its debt settlement plan can reduce their enrolled debt by an average of 20% to 25%, after fees.
Best debt consolidation loans for bad credit
Best for low credit scores: Avant
Who's this for? Avant borrowers only need a 550 FICO Score, making debt consolidation accessible to a wide range of borrowers.
Standout benefits: Avant advertises that loans can be approved in just minutes.
Avant Personal Loans
Annual percentage rate (APR)
9.95% to 35.99%
Loan amounts
$2,000 to $35,000
Terms
24 to 60 months
Credit needed
Poor/fair
Origination fee
Up to 9.99%
Early payoff penalty
No
Late fee
Up to $25 after a 10-day grace period
Click here to see if you prequalify for a personal loan offer. Terms apply.
Pros
- Lends to applicants with poor credit
- No early payoff fee
- Can prequalify with a soft credit check
- Funding often available next day
- Late-payment grace period of 10 days
Cons
- Origination fee
- Potentially high interest
- No autopay discount
- No direct payments to creditors for debt consolidation
- No co-signers
Best for flexible repayment terms: Achieve
Who's this for? Achieve has two-, three-, four- and five-year repayment plans, allowing more flexibility for borrowers.
Standout benefits: You can earn a discount if you allow at least 85% of the loan funds to be paid directly to your creditors. There are also rate reductions for having a qualified co-borrower or proof of sufficient retirement funds.
Achieve® Personal Loans
Annual Percentage Rate (APR)
8.99% to 29.99%
Loan purpose
Debt consolidation, major purchase
Loan amounts
$5,000 to $50,000
Terms
24 and 60 months
Credit needed
620 or higher
Origination fee
1.99% to 6.99%
Early payoff penalty
None
Late fee
See terms
Terms apply.
Pros
- Flexible term lengths
- Rate discounts available
- Works with borrowers with fair credit
Cons
- Loans may not be available in all states
- The lender charges origination fees
Best for small loans: Upstart
Who's this for? Not carrying a huge debt? Upstart offers debt consolidation loans as small as $1,000.
Standout benefits: Upstart considers factors beyond your credit history when evaluating your application, including work experience and education.
Upstart Personal Loans
Annual percentage rate (APR)
6.5% - 35.99%
Loan amounts
$1,000 to $75,000
Terms
36 and 60 months
Credit needed
300 (but may also accept applicants with no credit history)
Origination fee
0% to 12% of the target amount
Early payoff penalty
No
Late fee
5% of the last amount due or $15, whichever is greater
Terms apply.
Pros
- Accept applicants with low or no credit
- No early payoff fees
- Most loans funded the next business day
Cons
- High late fees
- Origination fee of 0% to 10% of the target amount
- $10 fee for paper copies of loan agreement
Best for large loans: Upgrade
Who's this for? With a maximum personal loan limit of $50,000, Upgrade is a great option if you have large debts to consolidate.
Standout benefits: There are no prepayment fees and funding is available as early as the next business day.
Upgrade Personal Loans
Annual percentage rate (APR)
7.74% - 35.99%
Loan amounts
$1,000 to $50,000
Terms
 24 to 84* months
Credit needed
600 (fair)
Origination fee
1.85% to 9.99%, deducted from loan proceeds
Early payoff penalty
No
Late fee
Up to $10 after a 15-day grace period
Terms apply.
Pros
- Accepts applicants with fair credit
- Loans up to $50,000
- Creditors can be paid directly
- Autopay discount available
- Funding in as little as one day*
Cons
- High maximum interest rate
- Origination fee of up to 9.99%
- No physical branches
Why Upgrade is the best for financial literacy:
- Free credit score simulator to help you visualize how different scenarios and actions may impact your credit
- Charts that track your trends and credit health over time, helping you understand how certain financial choices affect your credit score
- Ability to sign up for free credit monitoring and weekly VantageScore updates
Best for fast approval: LendingPoint
Who's this for? If you need money quickly, LendingPoint funds loans as soon as the next business day.
Standout benefits: There's no prepayment penalty for making more than your monthly payment or covering the whole bill before the term is over.
LendingPoint Personal Loans
Annual percentage rate (APR)
7.99% to 35.99%
Loan amounts
$1,000 to $36,500
Terms
24 to 72 months
Credit needed
Poor/fair
Origination fee
Up to 10% , depending on the state
Early payoff penalty
No
Late fee
LendingPoint does not currently assess a late fee but reserves the right to charge one of up to $30, depending on the state.
Terms apply.
Pros
- Next-day funding available
- Approves applicants with 620 credit score
- No early payoff fee
Cons
- Origination fee of up to 10%
- No joint loans or co-signers
- Not available in Nevada or West Virginia
Who's eligible to apply for a LendingPoint loan:
- You must be at least 18 years of age.
- You must be able to provide a U.S. federal, state or local government issued photo ID.
- You must have a social security number.
- You must have a minimum annual income of $40,000 (from employment, retirement or some other source).
- You must have a verifiable personal bank account in your name.
- You must live in one of the states where LendingPoint does business (excludes Nevada and West Virginia).Â
Find the best personal loans
What's debt consolidation?
A debt consolidation loan is a way to get out of debt by combining multiple bills into a single loan with a fixed interest rate and a single monthly payment.
Since credit card APRs are usually much higher, a personal loan can be a good way to avoid getting buried in interest. You can often get your lender to send the funds directly to your creditors.
The pros and cons of debt consolidation
Debt consolidation isn't the perfect strategy for everyone. Here are its pros and cons:
- Simplifies your finances. Multiple bills are combined into a single monthly payment.
- Saves money on interest. If you're approved for a lower APR than your current bills.
- Avoid repossession. If you use the funds to pay off your car loan, your vehicle won't be collateral anymore.
- Can repair your credit. On-time payments and lower credit utilization will help your score tick upward.
- Upfront costs. Personal loans can come with an origination fee.
- May get a high interest rate. If you have bad credit or choose a long loan term, you may be saddled with a higher rate.
- Temptation to continue spending. If you have trouble living within your means, you might fall back into bad financial habits once you free up more cash or credit.
Choosing the best debt consolidation loan
When determining the best debt consolidation loan, look beyond just the APR and pay attention to:
- The loan term
- Origination fees
- Loan limits
- Customer service
- The lender's online offerings
Alternatives to debt consolidation
A debt consolidation loan might be hard to secure if you have credit issues, and even then, the terms might not be favorable. Some alternatives to debt consolidation you can look into include:
- Negotiate with your lenders:Â Don't be afraid to reach out to your creditors about lowering your interest rate, developing a payment plan or forming other arrangements to make your loan more manageable.
- Mortgage refinancing: If you have a home loan, you may be able to take out a cash-out refinancing loan. This replaces your mortgage with a larger loan and allows you to use the difference to consolidate your debt. Most mortgage lenders require a credit score of 620 to qualify.
- Debt relief program: Debt settlement companies negotiate what you owe with your creditors. You typically need at least $7,500 in unsecured debt, however, and the fee for their service can be as much as 25% of your enrolled debt.
- Credit counseling: Credit counseling organizations like the Financial Counseling Association of America will dive into your finances and suggest areas you can make improvements or design a workable repayment plan with your lenders. The best are free or charge a minimal fee.
Debt consolidation FAQs
How long does it take to get approved for a debt consolidation loan?
You can expect to receive the lender's decision within a few business days. However, many lenders might also approve you instantly. To ensure a smoother process, include any documentation the lender requires with your application and promptly respond to requests for more details.
Why can't I get a debt consolidation loan?Â
Lenders look at multiple factors when evaluating a loan application, including credit score and income, and approval isn't guaranteed. However, under the Equal Credit Opportunity Act, any lender that turns you down must disclose the specific reasons why within 60 days.
Is a debt consolidation loan a good idea?
A debt consolidation loan can be a good idea if you're able to secure a better rate than your current one. Be sure to consider the loan term and any origination fees when deciding whether it makes financial sense.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every loan list is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Our methodology
To determine which debt consolidation loans are the best for consumers with bad credit, CNBC Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions.
When narrowing down and ranking the best personal loans, we focused on the following features:
- Fixed-rate APR:Â Variable rates can fluctuate over the lifetime of your loan. With a fixed-rate APR, you lock in an interest rate for the duration of the loan term, so your monthly payment won't vary and it's easier to budget for.
- Flexible loan amounts/terms:Â Each lender provides more than one financing option that you can customize based on your monthly budget and how long you need to pay back your loan.
- No early payoff penalties:Â The lenders on our list do not charge borrowers for paying off loans early.
- Streamlined application process:Â We evaluated whether lenders offered same-day approval and a fast online application.Â
- Customer support:Â Every lender on our list provides customer service via telephone, email or secure online messaging. We also opted for lenders with mobile apps that let you manage your loan.
- Fund disbursement:Â The lenders on our list deliver funds promptly via either an electronic wire transfer to your checking account or a paper check. We noted whether lenders offered to pay your creditors directly.
- Creditor payment limits and loan sizes:Â The above lenders offer loan amounts from $1,000 to $50,000 and advertise their respective payment limits and loan sizes.
We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.
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