The best debt consolidation loans for bad credit in 2026

According to consumer data from the Federal Reserve Bank of New York, total U.S. credit card debt hit $1.25 trillion in the first quarter of 2026. A debt consolidation loan can help manage bills by organizing multiple debts into a single monthly payment at a fixed rate.

If you have less-than-stellar credit, though, you'll have a harder time qualifying for a loan. Even if you do get approved, exorbitant interest rates and fees can land you even deeper in debt.

We've selected the best debt consolidation loans for borrowers with bad credit, looking at requirements, interest rates, fees, repayment terms and other factors. To learn how we made our picks, read our methodology.

Who's this for? Avant borrowers only need a 550 FICO Score, making debt consolidation accessible to a wide range of borrowers.

Standout benefits: Avant advertises that loans can be approved in just minutes.

Who's this for? Achieve has two-, three-, four- and five-year repayment plans, allowing more flexibility for borrowers.

Standout benefits: You can earn a discount if you allow at least 85% of the loan funds to be paid directly to your creditors. There are also rate reductions for having a qualified co-borrower or proof of sufficient retirement funds.

Who's this for? Not carrying a huge debt? Upstart offers debt consolidation loans as small as $1,000.

Standout benefits: Upstart considers factors beyond your credit history when evaluating your application, including work experience and education.

Who's this for? With a maximum personal loan limit of $50,000, Upgrade is a great option if you have large debts to consolidate.

Standout benefits: There are no prepayment fees and funding is available as early as the next business day.

Who's this for? If you need money quickly, LendingPoint funds loans as soon as the next business day.

Standout benefits: There's no penalty for making more than your monthly payment or paying off the loan before the term ends.

Debt consolidation combines multiple bills into a single monthly payment with a lower interest rate.

Credit card APRs are much higher than the interest on a personal loan, so debt consolidation can be a savvy strategy if you're buried in card debt. You can often get your lender to send the funds directly to your creditors.

Buried in bills? See if a debt settlement company can help

Weak credit will make it harder to get approved for a debt consolidation loan, but there are steps you can take to improve your odds.

1. Shop for lenders that work with bad credit 

Because they're member-owned and not-for-profit, credit unions tend to have more flexible credit score requirements. Some even specialize in credit-building or "fresh start" loans.

Fintech companies and other online lenders have lower overhead than banks and credit unions and use AI-driven underwriting that reviews alternative data (income, employment, cash flow, education) rather than just your FICO score. But, the laxer eligibility requirements are often offset by higher interest rates.

2. Consider a co-signer

If you have a friend or family member with good credit who is willing to co-sign your loan, it can greatly improve your odds of approval. Make sure they understand they're accountable for the debt and if you default on payments, it will impact their credit as well.

3. Use collateral

If you have bad credit, you can boost your chances by offering to secure the loan with collateral, like a savings account, your car, or your house. You're more likely to be approved (and get a better rate), but if you are unable to make payments, you could face repossession or foreclosure.

When determining the best debt consolidation loan, look beyond just the APR and pay attention to:

• The loan term
• Origination fees
• Loan limits
• Customer service
• The lender's online offerings

Debt consolidation isn't the perfect strategy for everyone. Here are the benefits and drawbacks.

A debt consolidation loan might be hard to secure if you have credit issues. Some alternatives to debt consolidation include:

• Negotiating with your lenders: Don't be afraid to reach out to your creditors about lowering your interest rate, developing a payment plan or forming other arrangements to make your loan more manageable.
• Mortgage refinancing: If you have a home loan, you may be able to take out a cash-out refinancing loan. This replaces your mortgage with a larger loan and allows you to use the difference to consolidate your debt. Most mortgage lenders require a credit score of 620 to qualify.
• Debt relief: Debt settlement companies negotiate what you owe with your creditors. You typically need at least $7,500 in unsecured debt, however, and the fee for their service can be as much as 25% of your enrolled debt.
• Credit counseling: Credit counseling organizations like the Financial Counseling Association of America will dive into your finances and suggest areas you can make improvements or design a workable repayment plan with your lenders. The best are free or charge a minimal fee.

The best way to get approved for a loan is to have good credit. If yours is less-than-stellar,

1. Check your credit score. You need to know what you're working with. You can get a free FICO® Score from Experian, and many banks and credit card issuers also provide customers with scores.

2. Make on-time payments. Payment history accounts for 35% of your credit score, making it the largest factor. A steady record of paying your bills on time and in full for a few months can raise your score by 20 to 50 points. Larger gains are possible, depending on how low your score is.

3. Lower your credit utilization rate. Your credit utilization ratio (CUR) is the amount of credit you're currently using compared to your total credit limit. If you have a $30,000 limit across all your credit cards and your bills total $10,000, your CUR is 33%. Experts recommend a CUR below 30% to get approved for most personal loans and credit cards, but a ratio of below 10% will get you the best rates.

Paying off bills will obviously lower your CUR. But you can also ask for an increase on your credit card limit. So long as you don't ring up more charges, your ratio will decline.

4. Avoid opening too many accounts at once. Every time you apply for a loan or credit card, the lender runs a hard credit inquiry. Too many inquiries in a short span of time can signal financial instability and will ding your score. The same is true about asking for credit limit increases.

5. Dispute errors on your credit report. Mistakes on credit reports are surprisingly common, so it's important to check your reports from all three major credit bureaus for errors and signs of identity theft or fraud.

You can get credit reports from Experian, Equifax and TransUnion from annualcreditreport.com.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every loan review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

To determine which debt consolidation loans are the best for consumers with bad credit, CNBC Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions.

When narrowing down and ranking the best personal loans, we focused on the following features:

• Fixed-rate APR: Variable rates can fluctuate over the lifetime of your loan. With a fixed-rate APR, you lock in an interest rate for the duration of the loan term, so your monthly payment won't vary and it's easier to budget for.
• Flexible loan amounts/terms: Each lender provides more than one financing option that you can customize based on your monthly budget and how long you need to pay back your loan.
• No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
• Streamlined application process: We evaluated whether lenders offered same-day approval and a fast online application. 
• Customer support: Every lender on our list provides customer service via telephone, email or secure online messaging. We also opted for lenders with mobile apps that let you manage your loan.
• Fund disbursement: The lenders on our list deliver funds promptly via either an electronic wire transfer to your checking account or a paper check. We noted whether lenders offered to pay your creditors directly.
• Creditor payment limits and loan sizes: The above lenders offer loan amounts from $1,000 to $50,000 and advertise their respective payment limits and loan sizes.

We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.

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