Best Personal Debt Consolidation Loans for Bad Credit 2020

EPF Last Update: October 25, 2020

Debt consolidation loans allow borrowers to roll multiple debts into a single new one with fixed monthly payments and, ideally, a lower interest rate. With a debt consolidation loan, a lender issues a single personal loan that you use to pay off other debts, such as balances on high-interest credit cards. You’ll pay fixed, monthly installments to the lender for a set time period, typically two to five years. The rates may be a bit higher and still make sense if your multiple loans cost is very high, and your credit score is poor.

Best personal loans for debt consolidation loans for good credit come with APRs of between 5.99% and 10%. For bad credit, you can expect an APR of up to 35.99%.

If you are with bad credit that does not mean that you have to go and get payday loans. They are predatory. In this article, we discuss getting personal loans for debt consolidation. However, we still recommend that you watch our video, which discusses how people with bad credit can get approved on a personal loan.

Watch Our Latest Video on Bad Credit Loans on Youtube and Please Like us!

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FICO® Credit Score

Credit ScoreLowerUpper
Very bad300560

Best Debt Consolidation Loans 2020

Loan CompanyMin Credit ScoreAPRAmount
PersonalLoans5805.99% – 35.99%$35,000
LendingTree5003.99% – 35.99%$50,000
PayOff6405.99% – 24.99%$40,000
Upgrade6007.99% – 35.97%$35,000
LendingClub6006.16% – 35.89%$40,000


Loan amounts$1,000 – $35,000
Typical APR5.99% – 35.99%
Min Credit Score580
Time to funding1 Day
Loan terms90 days – 72 months
Origination fee1 – 5%
Debt-to-income ratioN/A
Check rates

PersonalLoans is a huge marketplace with lenders that serve many customers in different target groups.

Best for:

  • Good and excellent credit score.


  • Competitive APRs.
  • Low credit requirements.
  • Low income requirements.
  • No prepayment penalties.
  • No hidden fees.
  • Great customer support.


  • You can’t delay too much your payments.


Loan amounts$1,000 – $100,000
Typical APR3.99% – 35.99%
Min Credit Score500
Time to funding1 Day
Loan terms1 – 5 Years
Origination fee0 – 3%
Debt-to-income ratioN/A
Check rates

LendingTree is the best place to start shopping for personal loans for debt consolidation. This platform does not extend loans but connects borrowers with the best deals in the market.

Once you make an application on their platform, you are matched with up to five different lenders that will compete to give you the best rates.


  • Easy online application.
  • Multiple offers.
  • Low APRs.
  • Quick funding.


  • Requires a great deal of personal information to get meaningful results.

Best for: Borrowers with a steady source of income.


Loan amounts$5,000 – $40,000
Typical APR5.99% – 24.99%
Min Credit Score640
Time to funding1 – 7 Days
Loan terms2 – 5 Years
Origination fee0% – 5%
Debt-to-income ratio50%
Check rates

PayOff extends personal loans for debt consolidation to borrowers with a minimum credit score of 640. The typical APR ranges from 5.99% to 24.99%.

With this lender, you can repay within 24 to 60 months with options to defer, skip, or change the payment date. The loadable amount is between $5,000 and $40,000.

Best for:

  • You have a fair credit score.
  • You have a debt to income ratio of 50% or less.
  • You have an annual income of not less than $40,000.
  • You have a credit history of 3 years and above.


  • Offers support and financial guidance to help less disciplined borrowers stay focused.
  • Considerable rates for bad credit.
  • Flexible payment options.


  • A loan application requires a lot of personal information.
  • Charges origination fees.


Upgrade Disclaimer: Loans made through Upgrade feature APRs of 6.99%-35.97%. All loans have a 1% to 6% origination fee, which is deducted from the loan proceeds. The lowest rates require Autopay. For example, if you receive a $10,000 loan with a 36 month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your bank account and would have required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. The actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early.

Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. The availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days. All loans made by WebBank, member FDIC.

Loan amounts$1,000 – $35,000
Typical APR7.99% – 35.97%
Min Credit Score600
Time to funding1 Day
Loan terms3 – 5 Years
Origination fee2.9% – 8%
Debt-to-income ratio40%

This lender extends loans to borrowers with a credit score of 600 and above. With Upgrade, you can borrow up to $50,000 with an APR of between 7.99% – 35.97%. The repayment period is usually between three to five years.

Best for:

  • Borrowers with steady cash flow.
  • Borrowers looking for a debt consolidation option.


  • Competitive APRs.
  • No prepayment penalty.
  • Free credit health Monitoring.
  • Soft pull on the initial application.


  • High origination fees for some loans.
  • Late payment fees.
  • Returned check fees.


Loan amounts$1,000 – $40,000
Typical APR6.16% – 35.89%
Min Credit Score600
Time to funding1 – 7 Days
Loan terms3 – 5 Years
Origination fee1% – 6%
Debt-to-income ratio40%
Check rates

LendingClub extends personal loans to borrowers with a minimum credit score of 600. With this lender, you can borrow up to $40,000 and pay within 36 to 60 months. The typical APRs range from 6.95% to 35.89%.

Best for:

  • You have a bad credit score.
  • You need less than $40000.
  • You have a stable job.


  • Accepts bad credit scores.
  • Offers lower APRs.
  • No prepayment penalties.


  • Charges origination fee.
  • Funding takes nearly a week.

If none of the above options meets your purpose, we encourage you to keep shopping. Here are some tips to help you make the most out of personal loans for debt consolidation for bad credit.

What to Consider Before Taking a Personal Loan for Debt Consolidation for Bad Credit?

A personal loan for debt consolidation will do you no good if you are not ready to change your spending habits and focus on clearing the debt.

In fact, without proper planning, this method can push you deep into debt and further destroy your credit. Transferring all your debt into a personal loan does not mean that your debt has vanished. It is still there, and if you do not focus on paying it, things will continue getting worse.

You need to keep reminding yourself that you are still in debt until you can clear the personal loan.

Proper preparation requires that you have a budget reflecting the amount you can afford to pay each month comfortably. Shop around with this figure in mind to avoid taking a personal loan with monthly payments you can’t manage.

Also, it is better to keep paying the multiple loans if you realize that the savings from the personal loan for debt consolidation are insignificant. Keep working on your credit score until you are eligible for better terms. You may find yourself saving more if you invest in improving your credit score first.

There are multiple resources out there to help you work on your rating. Read our guide on how to increase your credit score with 100 points in three months.

How to Shop Around for The Best Deals?

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When shopping for a personal loan for debt consolidation with bad credit, there are several essential things you need to note.

First, do not rush to take offers at face value. Scrutinize each deal and ask questions where things are not clear. Remember that while some lenders may appear attractive regarding rates, they may not be worthwhile when fees are taken into account.

If you cannot find a good deal that matches your bad credit score, there are several other options that you can consider.

  • Personal loans with a cosigner

You can get someone with a good credit score to co-sign you a loan. This means that the lender will consider the credit rating of the co-signer when determining whether to extend a loan to you.

A loan with a co-signer is likely to have a high approval rate and lower APRs. The downside is that the co-signer takes full liability if you fail to meet the loan terms as agreed.

Let the co-signer know the repercussions before signing and do your best to ensure that you do not get them into trouble. Please note that not all lenders accept loan applications with a co-signer.

  • Secured personal loans for debt consolidation

Another way to increase the chances of approval with bad credit is to apply for a secured loan. In a secured personal loan, you commit your asset/s as security for the loan.

The lender goes after the pledged asset if you fail to meet the loan terms. This not only leads to a more significant loss on your side but also affects your credit score.

Assets most commonly used as collateral include home equity, car, savings, or certification of deposit. Do not take a secured personal loan for debt consolidation unless you are very confident that you will strictly adhere to the loan payment terms.

Advantages of Unsecured Loans for Bad Credit

The best thing about unsecured personal loans for bad credit is that they are easy to apply and do not take long to get funded. This means that if you get a good deal, you can start saving on interest almost immediately.

Also, if you move all your debts to a personal loan and you can adhere to the payment terms, your credit score improves. When calculating FICO scores, credit rating agencies take into account things such as your debt utilization ratio, credit mix, and payment history among other things.

If your multiple debts do not include a personal loan, taking one for debt consolidation has a positive impact on your credit score.

Also, moving all debts into one card means that some cards are freed up to take more debt, and this is considered a great thing when calculating your credit score. Do not close the freed up cards or use them take up more debt before you have paid off the debt consolidation loan


A bad credit score should not close you out from getting a personal loan for debt consolidation. Even with a credit score below 600, you are likely to find great offers if you do your homework well.

Always ensure that you read the fine details of each offer to ensure that you are subscribing to a viable deal. Some loans may come with low rates but offset the advantage with very high fees.

If you still cannot find a good deal, consider taking secured personal loans or engaging a co-signer. These two methods have their disadvantages and therefore are not fit for everyone.

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