|Creditor||APR range||Minimum loan amount||Maximum loan amount||Conditions||Recommended credit rating|
|5.94% -35.97% with a discount for auto payment||1000 USD||USD 50,000||36-60 months||580+|
|9.95% -35.99%||USD 2,000||USD 35,000||24-60 months||600+|
|Federal Credit Union First Tech
Best maximum loan amount
|6.70% –18%||USD 500||USD 50,000||24–84 months||580+|
Best for fast financing
|5.97% –29.99% with a discount for auto payment||USD 2,000||USD 45,000||36-60 months||580+|
|PenFed Credit Union
Best for small loans
|5.99% –17.99%||USD 600||USD 35,000||6-60 months||580+|
How to get a debt consolidation loan with bad credit history?
Debt consolidation with bad credit may limit your choices, but it is possible to find a lender. First, it is recommended that you check your credit rating to find out where you are, and then look for lenders with lower credit requirements to increase your chances of getting approved.
While your options may be limited, you will want to take a closer look and compare lenders to see who will offer you the best rates and terms. Then, compare that to what rates you are currently paying with your existing debt to see if it is worth switching to.
Where can you get a debt consolidation loan if you have bad credit history?
Credit unions and online lenders tend to offer better rates for those without credit. Credit unions are good if you are interested in personal service, but in most cases you need to become a member (usually by paying an annual fee or opening a savings account) in order to get approved for a loan.
On the other hand, online lenders generally do not require you to become a member. offering the same customer service online or by phone. However, if you are uncomfortable with managing and paying off your loan online, this may not be the best choice.
What credit rating do you need to get a debt consolidation loan?
Generally, the higher your credit rating, the more likely you are to get a debt consolidation loan. Although the lenders on our list require a minimum credit rating of 580 or 600, you may need to meet other requirements such as a certain annual income and debt-to-income ratio limits to be approved.
What is the best way to consolidate debt?
Aside from finding debt consolidation loans, one of the best ways to get approved at a competitive rate is to add a co-author. Ideally, this should be someone with a good credit profile, better than yours, whom you trust and who understands the responsibility and consequences of a loan… Otherwise, you can work to improve your debt-to-income ratio by increasing your income or paying off additional debt before applying.
Are there alternatives to debt consolidation?
Here are a few options, each with their own pros and cons.
Loan secured by equity capital
This type of loan involves the use of the justice of your home and can offer a low interest rate, as this provided loan. One of the main risks is that you are providing your home as collateral, which means that if you cannot repay the loan, you are at risk foreclosure…
Debt Management Plan (DMP)
You can work with a certified credit counselor to lower your fees with your lenders. You will then combine your payments by making one payment to your advisor, who will then pay your creditors. It can save you money, but most consultants charge a monthly fee. In addition, the DMP takes several years to complete.
Bankruptcy filing can help you write off debt or negotiating a deal with your creditors. However, you will damage your credit and it will be much more difficult to get approval for certain loans in the future.
A bad credit history does not mean that there are no debt consolidation options available for you. This may mean that you will be eligible for a higher annual interest rate than someone who is more creditworthy, but as long as the rate is lower than what you are currently paying, it can save you hundreds, even thousands of dollars in the long run. … …
Compare what’s available and find out what it takes to increase your chances of approval so you can improve your financial situation. If you find that a personal loan is not the best choice for you, explore the alternatives and see if you can take the risk. In some cases, it is also better to wait for your credit situation to improve so that lenders are more likely to approve a loan for you with the terms and rates that you agree with.
How We Chose the Best Debt Consolidation Loans for Bad Credit
Investopedia is dedicated to providing consumers with impartial and comprehensive reviews of personal loan lenders for all borrowing needs. We have collected over 25 data points from over 50 lenders, including interest rates, commissions, loan amounts and repayment terms, to ensure that our content helps users make the right loan decision for their needs.