Loans > Debt Consolidation for Bad Credit

Debt Consolidation for Bad Credit

In this guide, we examine the pros and cons of the leading debt consolidation loans for borrowers with bad credit.

Reviewed by
Updated August 25, 2023

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

Managing one big bill can be tough; juggling multiple debts at once is frustrating and frazzling…

Indeed, paying down multiple debts at once is one of the most financially and mentally taxing things someone can go through. Regardless of how you get into debt, getting out of it feels draining.

Folks with several debts have to manage several bill due dates, multiple interest rates, and more, all while maintaining a workable budget. Even worse, lots of folks are struggling with more debt than ever due to the COVID-19 crisis.

Debt consolidation is one of the best ways you can get a handle on your various debts and start working toward financial security. But obtaining a debt consolidation loan can be difficult – if not impossible – if you also have bad credit. Don’t lose hope just yet, however.

There are some debt consolidation loans for bad credit that you might not have found. We’ve collected the top five debt consolidation loans for bad credit below in case you need some help. We’ll also go over some ideas and strategies you can leverage to make the most of a debt consolidation loan and get your credit score back on track.

Here’s a brief rundown of our five favorite lending platforms that provide debt consolidation loans even if you have bad credit.

Lending PlatformMinimum Credit ScoreAPRTermsLoan AmountExtra Fees
Lending Point580-66913.49%-35.99%24-48 months$2000-$25,000Late fees
SoFi6808.99%-25.81%2-7 years$5000-$100,000No fees required
Prosper6407.95%-35.99%12-36 months$2000-$40,000Late fees
PersonalLoans6405.99%-35.99%3-72 months$500-$35,000Late, some prepayment fees
BadCreditLoans600-6405.99%-35.99%3-60 months$500-$5000 Late, some prepayment fees

Top Debt Consolidation Loans for Bad Credit

Our extensive research examined more than 20 data points to arrive at the following:

  1. Lending Point
    Best Overall
  2. SoFi
    Best for Large Loans
  3. Prosper
    Best for Co-Borrowers
    Best for Fast Funding
    Best for Loans of Small Amounts

Best Debt Consolidation Loans for Bad Credit

There are a number of options out there. Some are untrustworthy and aim to take advantage of your bad credit score only to charge excessive interest rates.

1. Lending Point – Best Overall Bad Credit Debt Consolidation Loan

LendingPoint Logo
In case you have a bad credit, Lending Point offers affordable debt consolidation loans.


  • Very quick and easy to fill out application
  • No prepayment or application fees
  • Pretty accessible credit score range
  • Can check your rate for free without affecting credit score


  • APR range is unavoidably high
  • Relatively low term limit
Visit Lending Point on Lending Point’s website

Lending Point provides accessible debt consolidation loan options even if you have bad credit. They only require a generally fair credit score instead of the usual higher limits than most other lenders demand. In the event you get accepted, they offer a wide range of loan limits between $2000 and $25,000.

They also provide a relatively low limit of less than two years regardless of the loan amount. This matches up with their somewhat high APR range (the lowest you can expect to get is around 13%). However, they don’t have any prepayment penalties – this means you can aggressively pay off your debt with one of their loans and theoretically pay less than the lifetime costs of many other alternative loans.

Furthermore, they allow you to check your rate for free without dropping your credit score by a few points. They’re fast when it comes to funding in the event you get accepted, too. You can potentially get a loan offer in three steps and funded within 24 hours.

The online application is pretty quick and simple, and Lending Point has a collection of customer service representatives ready to help you with any technical difficulties or questions 24 hours a day.

All in all, they’re not the most affordable debt consolidation lender around, but they are quite accessible and quick to make a decision. This makes them a valuable choice if you need a short-term (under two years) loan fast and you’re committed to eliminating your debt ASAP.

Income disclosure: Our minimum annual income is $35,000 alimony, child support or separate maintenance income need not be revealed if you do not wish to have it considered as a basis for repaying the loan.

Offer Terms and Conditions: Applications submitted on this website may be funded by one of several lenders, including: FinWise Bank, a Utah-chartered bank, member FDIC; LendingPoint, a licensed lender in certain states. Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“”APR””) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. Loans are offered from $2,000 to $25,000, at rates ranging from 9.99% to 35.99% APR, with terms from 24 to 60 months. A $10,000 loan with an origination fee of 6% for a period of 24 months with an APR of 24.0980% may have a payment of $529.20 per month (actual terms and rate depend on credit history, income and other factors). The total amount due under the loan terms provided as an example in this disclaimer includes the origination fee financed in addition to loan amount, which is $12,700.80. Customers may have the option to deduct the origination fee from the disbursed loan amount if desired. The total amount due is the total amount of the loan you will have paid after you have made all payments as scheduled.
Alimony, child support, or separate maintenance income need not to be revealed if you do not wish to have it considered as a basis for repaying this obligation.

2. SoFi – Best Bad Credit Debt Consolidation Loan for Large Amounts

Sofi Logo
If you want bigger debt consolidation loans, then SoFi has you covered.


  • Very good if you need to borrow a lot of money
  • Very simple and easy to understand application
  • No extra fees required
  • You can possibly get a decently low APR


  • Relatively high minimum credit score for most borrowers

Visit SoFi on SoFi’s website

SoFi’s investing platform is a well-known financial institution, particularly for their helpful robo-advisor. However, they also offer a decent range of debt consolidation loans, although they typically only accept people with credit scores of 680 or above. There’s a little wiggle room if you have some history with them or an excellent job, however.

They also provide a great APR range that can go as low as 8.99% with an auto-pay feature. This makes them a great choice if you have solid debt repayment strategies in place and consistent income. Furthermore, SoFi will let you borrow up to $100,000: an extremely high limit for these types of loans. You can also borrow as low as $5000.

Payment example:

The following payment example depicts the APR, monthly payment and total payments made during the life of a personal loan with a single disbursement. All loan rates below are shown with the autopay discount (0.25%) and direct deposit discount (0.25%).

The monthly payment for a $30,000 loan with a 60-month term and a fixed annual percentage rate (APR) between 12.95% – 25.03% would be $681.82 – $881.07 in monthly payments, with total payments between $40,909.47  – $52,864.05.

Your actual interest rate may be different than the loan interest rates in these examples and will be based on term of loan, your financial history, and other factors, including your cosigner’s (if any) financial history.

Lowest rates reserved for the most creditworthy borrowers. See for details.

We also like that they don’t have any required additional fees – prepayment, origination, late and overdraft are all nowhere to be seen. The application for getting a loan is fairly simple and you’ll benefit from live support if you have any technical questions seven days a week.

Ultimately, they’re a phenomenal choice if you need to borrow well over $50,000 and have a consistent income to pay off the debt in a timely fashion. They’re also well-suited to high dollar loans because you can potentially get a term for up to seven years depending on the loan amount and your payment history.

*Personal Loan Disclaimer

Fixed rates from 8.99% APR to 25.81% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 03/06/23 and are subject to change without notice.

Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors.

Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-6%, which will be deducted from any loan proceeds you receive.

Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.

Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan.

Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. 

You are not required to enroll in direct deposits to receive a Loan.

3. Prosper – Best Bad Credit Debt Consolidation Loan with Co-Borrowing

Prosper Logo
Prosper is the only company that allows you to implement co-borrowing strategy.


  • Includes a co-borrower option
  • Great for students
  • Decent funding speed
  • Relatively accessible credit score


  • Interest rate isn’t the best you can find unless co-borrowing 
Visit Prosper on Prosper’s website

Students or anyone who has a trusting co-borrower will want to check out Prosper for a debt consolidation loan, as they’re one of the few institutions that allow this debt management strategy. In a nutshell, you can cosign with another borrower who agrees to take on some or all of the financial risk for the arrangement.

In exchange, you can get a lower interest rate. This can potentially be a great idea if your co-borrower has a great credit score already.

Otherwise, Prosper requires a minimum credit score of 640 in most cases, which is around the “fair” range. Interest rates hover between around 8% to around 36%. You can use this debt consolidation loan to finance home improvement projects, pay off medical expenses, or consolidate your debt in the traditional sense.

They’re pretty quick when it comes to funding (though not as fast as Lending Point), averaging around three days until you get your money after approval. Their financial experts will also work with you to ensure that your monthly bill stays as close to the same as possible. Depending on your financial situation, this could be quite helpful and excellent for budgeting purposes. 

With a range of $2000-$40,000, Prosper is a good option for loans of a variety of amounts and types. Again, check them out if you have a co-borrower who will be willing to help you get a decent debt consolidation loan. If you want to get more info on Prosper’s features, check our in-depth Prosper review.

4. – Best Bad Credit Debt Consolidation Loan for Fast Funding logo
If you need a loan as fast as possible, PersonalLoans has the best offers.


  • Low loan minimum
  • Very accepting of most credit types
  • Very relaxed about loan use
  • Very fast decision making and funding


  • Sometimes charge prepayment fees
Visit on’s website is a great resource if you need a bad credit debt consolidation loan fast. But note that they’re not a lender themselves. Instead, they’re a middleman institution that connects individuals to lenders and advocates on your behalf even if you have bad credit.

They can find institutions that provide loans between $500 and $35,000 in as soon as a single business day. Most of their partnered lenders have lightning-fast decision times. Fill out an application in the morning and you could potentially get funding on its way to your bank account by the evening or following morning.

Furthermore, they’re very lax about what you use the loan for. While we’d recommend using the loan for debt consolidation if that was your original purpose, it’s helpful to know that you can potentially get a sizable loan for a variety of needs ranging from emergencies to big purchases to anything else.

They welcome credit types across the entire range (though they do have a general limit of around 640). Furthermore, they’re available in all 50 states without limitation, and provide loan terms between 3 and 72 months. Note that they can charge prepayment fees depending on your loan agreement, so keep this in mind if you plan on aggressively paying down your debt.

Lastly, note the low $500 minimum – could, therefore, possibly be a good deal if you only need a small loan of around $1000-$2000 for a short-term solution. All in all, they’re a trustworthy choice if you need a fast bad credit debt consolidation loan.

5. – Best Bad Credit Debt Consolidation for Low Amounts Logo has the best offers for clients who need smaller loans.


  • Provides funding quickly in most cases
  • Decent APR range
  • Provides educational resources and assistance
  • Low loan minimum


  • Low loan limit
  • Sometimes charge prepayment fees
Visit on’s website is worthy of its name, providing loans for those with bad credit for a variety of needs. Like the last pick, they’re also an intermediary that hooks you up with lenders who aren’t scared away by bad credit.

They can find lenders that offer decidedly small loan amounts ranging between $500 and $5000, so they’re a good choice only if your debts don’t go over this admittedly low limit. Still, this could be a great choice if you need some short-term financial stability and plan on paying down the debt reliably.

Contracts from sometimes charge prepayment fees, however, so you might want to stick with the loan term, which can range between 3 and 60 months. Still, they offer competitive interest rates between 5.99% and 35.99%.

In addition, filling out an application for one of their loans is typically quick and easy. You can expect to get your funding within the next business day in most cases.

They do offer some additional value in the form of educational resources like blog posts, resume writing tips, and even alerts for scam websites and predatory lenders. Visiting their site is a great idea if you want to rework your spending habits and history and really set yourself on a path toward financial stability.

All in all, they’re a decent middleman financial institution that does a good job of finding workable bad credit debt consolidation loans for lots of folks. They’ll be a good match for independent-minded people who will take advantage of all that they can offer.

A Guide to Bad Credit Debt Consolidation Loans

What is Debt Consolidation?

Debt consolidation as a concept is the act of combining or unifying all your unsecured debt payments into a single payment. “Unsecured” debt is any debt that isn’t secured through some kind of collateral, which is usually a high-value item or contract like those for your mortgage or your car. 

It’s basically piling all your debt payments into a single monthly bill. There are several advantages to this:

  • It’s easier for you to keep track of your debt payment(s) when there’s only one worry about
  • consolidated debt usually comes with a lower interest rate
  • you can budget for and pay off your debt more simply

A debt consolidation loan is a loan specifically intended for paying off various outstanding loans in exchange for taking out a single loan for the combined amount from the lender themselves. Here’s an example:

  • A debt consolidation lender gives you a loan totaling the amount of debt you have for five outstanding loans. The loans cost amounts like $100, $200, $300, $250 and $150. So you have a $1000 total debt across all five payments. The lender gives you $1000
  • You pay off the $1000 using the debt consolidation loan’s funding and simultaneously take out a $1000 loan from the debt consolidation lender
  • You then pay the debt consolidation lender’s $1000 loan over the agreed term with a new interest rate

Debt consolidation loans are effective ways for people to get a handle on their debts and return to a state of financial security. Debt consolidation loans are not for everybody – they’re just one form of debt relief or repayment. They make the most sense when a debt consolidation loan will reduce your overall interest rate and make things simpler for you to pay in the long term.

Of course, debt consolidation loans can be tricky to secure if you have bad credit. This is why certain bad credit loans offer guaranteed approval in the first place. To lenders, bad credit could signify that you don’t have very good debt repayment strategies or that you aren’t very financially responsible overall.

How to Get a Debt Consolidation Loan with Bad Credit

Thankfully, the process for obtaining a debt consolidation loan is basically the same with bad credit as it is with good credit. There may be a few additional steps needed depending on your credit score, however.

Track Your Credit Score

The first step is to check your credit score, determine what score threshold you fall under, and make an effort to continually monitor your score as you seek out a good debt consolidation loan for your needs. If the process sounds intimidating, a top credit monitoring service can do it automatically. In general, lower credit scores mean you’ll have to settle with debt consolidation loans that have higher interest rates and less flexible terms.

We’d recommend checking your credit score through a free credit check provider like They provide a free credit score check that doesn’t bump your score down by a few points as well. Furthermore, many banks will provide tools that will let you check and monitor your credit score. Some of the debt consolidation lenders above also include features like credit tracking, especially since the loans in question are designed to help those who are struggling with their score.

Compare Loan Options

Your next step is to shop around for various loans. Don’t just pick out the first acceptable bad credit debt consolidation loan you find. Do a lot of research and compare your various loan options from banks, credit unions, online lenders, and any other potential institution. Use our handy chart to compare our favorites, for instance.

You’ll always want to try for the best deal you can possibly get. Even if you have bad credit, you’d be surprised what opportunities await if you spend a little time researching instead of choosing the first carrot dangled in front of your debts.

Consider the various aspects of every possible debt consolidation loan carefully, like:

  • The interest rate or APR. This describes how much extra you’ll have to pay every month, and by totaling it up over the agreed loan term you can see how much extra you’ll pay over the lifespan of the loan compared to the original debt amount. Lower APRs are almost always better
  • Any extra fees that might be incurred from signing up for the loan or from a late payment
  • The term itself, usually represented in months. Short-term loans might have slightly higher APRs compared to long-term loans but might result in lower overall costs and you knock out the debt quicker in comparison

Ultimately, going through the various aspects of your available loans takes time, but will result in you getting a much better deal than otherwise.

If No Loan Options Seem Worthwhile, Try a Secured Loan

You can always try a secured debt consolidation loan. Secured loans use your vehicle, home, or another type of valuable asset to act as collateral for the loan. These can be a little more difficult to find, as debt consolidation loans are usually unsecured. But you might be able to get a debt consolidation loan this way that works for your needs even if you have terrible credit.

On the other hand, you can always wait on debt consolidation and try to improve your credit in the short term to qualify for a better deal. Fortunately, you can improve your credit score on a month-to-month basis by making your debt payments on time for a few months in a row.

You can also close any credit card accounts that might be open but unused, or pay off small debts entirely ASAP. Or you can use a credit repair service to get negative credit items removed from your reports.

In the end, you might just make it over another credit score threshold and qualify for a better debt consolidation loan.

What Credit Score Do You Need for a Debt Consolidation Loan?

This heavily depends on the lender, and whether the loan in question is intended for folks with bad credit or is a good credit loan. What counts as “good” credit?

A general range from FICO goes like this:

  • Credit from 300 to 579 is poor
  • credit from 580 to 669 is fair or “bad”
  • credit from 670 to 739 is good
  • credit from 740+ is excellent

Most debt consolidation loans are for folks around the 670 or above range. But as you’ve seen above, many decent loans exist for those with credit below this threshold and even lower.

Can you get a loan with a 450 credit score, for instance? Absolutely, but your options will be much more limited, and you’ll have to spend more time shopping around for a suitable loan than if you had a higher score. Additionally, you’ll have to be extra aware of potential scams or predatory lenders. Most of your search results will bring up subpar loan opportunities.

What Qualifiers Are There for Debt Consolidation Loans?

In addition to your credit score, lenders will also look at other factors to determine whether you are a safe risk for a debt consolidation loan, including:

  • your income range
  • whether you have a stable job
  • your opened and closed credit accounts
  • your history with them as an organization (usually only if you go to a brick-and-mortar bank or credit union)

Places to Get Bad Credit Debt Consolidation Loans

You can get bad credit debt consolidation loans from a wide variety of institutions.

Local banks and credit unions are some of the most common lenders for these types of loans. They usually check your credit, but they might still be a great choice if you already have a relationship with them. For instance, you can talk to your local bank if you’ve been a loyal customer for several years and need a little help with a debt consolidation loan. They may even provide you with a flexible loan term based on your prior history.

You can also find excellent debt consolidation loans from online lenders. These are some of the most likely places to find these loans if you already have bad credit, partially because they’re more likely to approve you compared to a brick-and-mortar institution.

Online lenders have a few advantages – you can compare your rates between them without damaging your credit score and you can apply quickly and easily from the comfort of your computer. Furthermore, many online lenders provide you with your funding within one to two business days.

However, you have to be careful with online lenders as a majority of predatory institutions or lending scams are run from online websites. Always be sure to use a trusted resource like our guides or other reviews before signing up for a debt consolidation loan with an online lender.

How to Use Your Debt Consolidation Loan Properly

Once you get a debt consolidation loan, you have to take steps to make sure it’s all worthwhile. After all, your debt consolidation loan isn’t much help if you immediately start racking up debts and not making payments on time again. Like with all things, you have to set yourself up for success.

We’d recommend creating a budget that outlines how you’ll repay your single loan’s bill at the end of every month. This is already much easier than juggling multiple bill payments every month. Create a budget for your other expenses and funnel all extra cash toward paying off the loan. This will both keep your spending in check and improve your credit more quickly.

Secondly, always use the funding you get from a debt consolidation lender to pay off your debts. Don’t use those funds for anything else, even if you need something small. The money is only for paying off your debts. Depending on your contract, you can even get in trouble or void your loan if you use the money for anything else.

Lastly, take control of your behavior and acknowledge any spending issues that might have gotten you into debt in the first place. You have to handle any underlying behaviors that might impact your ability to restore your credit and knock out your debts. To that end, eliminate any credit cards or credit accounts that aren’t for emergencies only.

Debt Consolidation Loan Alternatives

There are several alternatives if you need help with your debt but can’t qualify for a good debt consolidation loan.

For starters, you can always pay back your debts with plain, old grit and determination. Focus on developing good spending and saving habits like we touched on above and overhaul your financial life. Pay off your debts ASAP and reign in your spending.

You can alternatively contact nonprofit organizations for help with a debt management plan, or DMP. In a nutshell, these professionals can give you some oversight and assistance when it comes to figuring out ways to handle your debt. But they’ll also act as an intermediary between you and your creditors.

If you have various creditors coming after you with bills every month, you can pay a DMP a lump sum that totals all your debts’ values and they’ll pay the creditors in turn. You don’t get a loan to pay off the debts, but still make a single monthly payment to just one receiver, which may be more manageable for some folks.

Other alternatives involve home equity loans, which are sometimes known as second mortgages. These are lump-sum and fixed-rate loans that use the equity of the home as collateral. Naturally, this is only really an option if you have a home to leverage as collateral in the first place.

How Can You Clear Debt Quickly?

No “get-rid-of-debt-quick” scheme actually works, unless you come into a miraculous inheritance at the perfect time. If this fortuitous event doesn’t happen, the best way to clear debt “quickly” is to come up with sustainable habits and focus on eliminating your debt to the exclusion of spending on new things.

That means avoiding buying new luxury items, lowering your grocery budget, avoiding eating out or spending money on social events, and more. To remove your debt “quickly”, each and every available dollar you have should go toward paying it off. Even if you have a set budget for paying off your debt by a certain amount every month, funnel any extra money you earn or otherwise come into toward the debt.

This will allow you to pay off your debt more quickly than anticipated. It’s still not instant, but it’s a great way to rapidly get your credit score and financial stability back on track.

What About Paying Off Debt While Broke?

As before, there’s no magical get rid of debt button you can hit even if you’re broke. But in many cases, you actually aren’t.

We’d recommend doing a full overhaul and review of your spending every month. Account for every cent that you earn and spend and find some wiggle room where you can start paying down your debts. Again, this might demand a significant drop in your luxury spending or quality of life. But it’s all worthwhile if you can get your debt under control.

You can also look into side jobs or hustling for more cash. It’s not glamorous, but it’s the way people have managed crushing debts, and eventually paid things off, for centuries.

What’s the Smartest Way to Consolidate Debt?

Certainly, the smartest way to consolidate debt for many is through a debt consolidation loan. This prevents you from moving debt around between credit cards (an act which lowers your credit score) and helps you keep your bill payments on track and on time.


Overall, debt consolidation can be a great strategy to get out of debt even if you have bad credit. Using one of the above loans, or any of the other mentioned debt repayment strategies, are good thoughts if you’re looking to get a handle on your bills and rebuild your credit one step at a time.

Ever used a debt consolidation loan before? Let us know, especially if you have experience with one of these lenders, and let’s have a discussion.

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.