Debt consolidation is a great way to take control of multiple debts and pay them off faster. It allows you to consolidate them into one loan with a fixed interest rate and monthly payments. This eliminates the stress of managing multiple bills and due dates, and can also save you money on interest.
Unfortunately, qualifying for a debt consolidation loan can be challenging if your credit is less than ideal (score of 669 or lower). As with any type of loan, borrowers with good credit stand a better chance of getting approved. They are also more likely to receive more favorable terms.
Options can be found that do not have good credit scores. However, it is critical t
o pay attention to interest rates and other additional costs, such as sign-up fees. You may end up with terms that make your loan more expensive than the debt you are currently paying off.
To determine the best debt consolidation loan options for bad credit, CNBC Select compared dozens of lenders based on credit score requirements, interest rates, fees, repayment terms and other factors. (Read more about our methodology below.)
Best Debt Consolidation Loans for Bad Credit
Best overall: Achieved
Best for people with no credit history: Boomers
Best for flexible repayment terms: Upgrade
Best for fast approval: LendingPoint
Best for low origination fees: Avant
Best Overall
Achieve® Personal Loans
Achieve® Personal Loans
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Annual Percentage Rate (APR)
7.99% to 29.99%
Loan Purpose
Debt consolidation, major purchases
Loan Amount
US$5,000 to US$50,000
Terms
24 and 60 months
Credit Required
620 or higher
Origination Fee
1.99% to 6.99%
Early Payment Penalty
There are no
late payment fee
Benefits
Open to borrowers with bad credit (minimum 620 score)
Can be pre-qualified with a soft credit check (no need for an immediate hard check)
Applicants can add co-borrowers
No early repayment fees
Can be approved on the same day
Funds can be sent within 24-72 hours
Disadvantages
High interest rates for borrowers with bad credit
Origination fee of 1.99% to 6.99% of target amount
Must have a social security number
Not available in all states
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Who is this for? Achieve is a great debt consolidation loan option for people with less than perfect credit due to its flexible terms, quick approval, fast financing and relatively reasonable rates.
To qualify for a personal loan with Achieve, you need a credit score of 620, which is considered fair. You can see if you’re likely to be approved when you apply online: Achieve will perform a soft credit check, which means it won’t affect your score.
If you choose to proceed with your application after pre-approval, the company will perform a rigorous credit check, which may give you some credit score. Achieve offers same-day approval, and then can send funds within 24 to 72 hours.
If your credit leaves much to be desired, you’re more likely to get rates at the higher end of the APR range. Most debt consolidation loans for bad credit can charge up to 36% interest, but Achieve’s top rate is much lower.
Best for people with no credit history
Upstart Personal Loans
Upstart Personal Loans
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Annual Percentage Rate (APR)
6.5% to 35.99%
Loan Purpose
Debt consolidation, credit card refinancing, home improvement, wedding, moving or medical
Loan Amount
1,000 to $50,000
Terms
36 and 60 months
Credit Required
Credit score of 300 on at least one credit report (but will accept applicants with insufficient credit history to have a credit score)
Origination Fee
0% to 10% of target volume
Early payment penalty
There are no
Late Payment Fee
Greater of 5% of final amount due or $15, whichever is greater
Please see our methodology, terms apply.
Benefits
Open to borrowers with good credit (minimum 300 points)
Will accept applicants with insufficient credit history and no credit score
No early repayment fees
99% of personal loan funds are sent the next business day after completing the required paperwork by 5pm Monday through Friday
Disadvantages
High late fees
0% to 10% origination fee of the target amount (automatically deducted from the loan before it is delivered to you)
10 fee to obtain a paper copy of the loan agreement (no fee for electronically signed virtual copies)
Must have a social security number
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Who is this for? For people with no credit history, New Noble may be a good option. Companies will consider factors beyond your credit, such as your work experience and educational background, when evaluating your application.
You can borrow as little as $1,000, which makes Upstart a good option if you need a small loan.
Upstart lets you see the interest rate you’ll get before you apply, without any impact on your credit score. According to Upstart, 99% of personal loan funds are sent within one business day of signing up. Note, however, that origination fees can be somewhat expensive depending on the terms of your loan.
