While bad credit can make obtaining low APR loans challenging, it’s far from impossible.

Over the next few minutes, you’ll discover some little-known tricks and tips you can leverage as a borrower. In particular, you’ll learn the ins and outs of debt consolidation loans for those with bad credit and why debt consolidation is often a prudent financial move.

What’s considered a bad credit score?

Most major U.S. lenders use FICO, which ranges between 300 and 850. Typically, under the FICO score, anything under 670 is deemed fair or poor.

  • Poor (300 to 579): This represents FICO's lowest credit score category. Typically, the lower your score, the higher your interest rate, all else equal. So borrowers in this category typically pay the highest APRs.
  • Fair (580 to 669): Debt consolidation loans for individuals with bad credit are usually sought after by borrowers scoring between 580 and 669. Even borrowers with fair credit scores can encounter challenges in obtaining loans and may face higher interest rates.
  • Good (670 to 739): Credit scores deemed “good” generally obtain more favorable interest rates compared to those categorized as “poor” or “fair” because lenders view those in this category as more financially responsible.
  • Very Good (740 to 799): Second from the top is the “very good” FICO category. Roughly 1 out of 4 borrowers fall in this category.
  • Exceptional (800 to 850): The highest attainable category is “exceptional.” Borrowers in this group can usually secure the lowest interest rate loans available.

If you were drawn to this article, chances are your score falls in the poor or fair category. That’s okay. Low credit scores can be frustrating, but they aren’t the end of the world, nor are they unique.

In fact, according to the Fed, last year, more than four out of 10 Americans were denied a financial product—such as a personal loan—because of their credit score.

In other words, you’re not alone. Not even close.

Debt consolidation loans for bad credit—what are they, and why are they beneficial?

Loan consolidation is when you merge multiple loans into a single loan giving you just one payment. Typically, the resulting combined loan will have a longer term but, significantly, a lower monthly payment at a fixed rate.

This strategy is particularly beneficial for individuals struggling to make debt payments. By consolidating debt, borrowers with poor credit can better tackle their debt obligations, potentially pay off their debt sooner, and ultimately improve their credit scores.

Having a single loan payment also simplifies personal financial management and reduces the chances of missing debt payments, which could further harm your credit score. And a fixed interest rate means you won’t be surprised by a sudden jump in monthly payments should rates rise.

What are your options?

Anytime you seek a loan or refinance existing agreements, it's critical to shop around. Just because you have bad credit doesn’t mean you should accept the first lender's offer. Instead, comparing options is vital, just as with any product or service.

The following are five of the best debt consolidation lenders you can access if you have poor or fair credit.

Best Egg

Best Egg is one of the best online lenders available. With terms of up to five years, low minimum credit score requirements, and no application fee, Best Egg easily earns its spot on our top five list.

  • Estimated APR: 8.99% - 35.99%
  • Eligibility: minimum credit score of 600
  • Term length: 3-5 years
  • Available loan amount: $2,000 to $50,000
  • Application fee: $0


SoFi boasts a $0 application fee, flexible repayment terms, and exceptional customer service. Not only that, members of SoFi can even obtain career counseling and unemployment protection, unique benefits that set them apart from other lenders.

  • Estimated APR: 8.99% - 20.15%
  • Eligibility: minimum credit score of 680
  • Term length: 2 years
  • Available loan amount: $5,000 to $100,000
  • Application fee: $0


Of all the lenders on our top five list, Upgrade offers the lowest eligibility requirements, with loans given out to borrowers with credit scores as low as 560. Upgrade also offers relatively long term lengths, up to seven years.

  • Estimated APR: 8.49% - 35.97%
  • Eligibility: minimum credit score of 560
  • Term length: 2-7 years
  • Available loan amount: $1,000 to $50,000
  • Application fee: 1.85% to 9.99% of the loan amount


LightStream stands out for two reasons: high available loan amounts and no application or origination fee for personal loans. This makes it one of the better options for debt consolidation for borrowers with bad credit needing higher loan values.

  • Estimated APR: 8.99% - 25.49%
  • Eligibility: minimum credit score of 660
  • Term length: 2-7 years
  • Available loan amount: $5,000 to $100,000
  • Application fee: $0


Simple, transparent, and flexible. These characteristics helped LendingClub secure a spot on our list. Still, its higher APR and steep application fee might turn off some prospective borrowers.

  • Estimated APR: 9.57% to 35.99%
  • Eligibility: Minimum credit score of 600
  • Term length: 3-5 years
  • Available loan amount: $1,000 to $40,000
  • Application fee: 3.00% to 8.00% of the loan amount

What else? Tips and tricks to secure the lowest APR

You know what debt consolidation is, its benefits, and which lenders offer some of the best terms, so what’s next?

Shopping around for the best rate isn’t the only way to secure a low APR. Fortunately, you have other options you can leverage.

Broaden your options: While the recommended lenders listed above are all online platforms, that doesn’t mean you shouldn’t consider other avenues. Although online lenders typically offer the best rates, exploring offerings from traditional banks or credit unions can't hurt. They may include features you value beyond a low APR.

Obtain a co-signer: If a friend or family member with good credit is willing to co-sign your loan, this can help you secure a lower APR. Just remember, the co-signer is responsible for paying back the loan should you default.

Build your credit: While you can’t substantially improve your credit overnight, the sooner you begin working on it, the sooner you’ll see it improve. As you already know, higher credit borrowers tend to land lower APR loans. If you want to improve your score, consider the following strategies:

  • Keep old credit cards open: Lenders view longer credit histories favorably. Even if you rarely use the card, keeping it active (and paid off) can help improve your score.
  • Pay bills on time: Prioritize paying your bills on time. If helpful, set recurring reminders or auto payments to ensure you never miss a payment.
  • Keep credit utilization low: Credit utilization refers to the share of a loan being used. For example, using $500 on a $1,000 limit credit card implies a credit utilization ratio of 0.5 (1,000 / 2,000). While it may seem counterintuitive, lenders look more favorably upon a borrower with a $1,000 balance on a credit card with a $4,000 limit, implying a credit utilization ratio of 0.25 (1,000 / 4,000).

Bad credit can be frustrating, but prospective borrowers can use numerous strategies and tactics to help obtain low APR debt consolidation loans.

If you have bad credit and want to consolidate your debt, take stock of your current position, shop around and identify lenders with the most favorable terms, and use the tips above to improve your score.

Most important, don’t be discouraged. Know you can improve your situation and increase the odds of securing more favorable rates.

Nothing is permanent, and bad credit isn’t a financial death penalty.