Finding the Right Debt Consolidation Loans Bad Credit Provider

Debt Consolidation Loans for People with Bad Credit

If you find yourself buried under a mountain of debt, the most common solution is acquiring debt consolidation loans. However, having a credit score lower than 670 can make the process a little harder. Fortunately, there are lenders that will still give you a chance even with bad credit.

Today, we'll share the five best companies and why they might be able to help you improve your credit score through debt consolidation.

Where to Get a Debt Consolidation Loan with Bad Credit

1. Best for Secured Loans: One Main Financial

  • Best for people with bad credit
  • Allows co-borrowers on a loan
  • Offers a secured consolidation loan where you can use collateral

One Main Financial is one of the best choices for people with bad credit scores. They offer a realistic service, with small loan amounts and origination fees. Usually, the loans range from $1,500 to $20,000 with an APR of 18 to 35% depending on the results of the application process.

2. Best for Fast Funding: Avant

  • The funding process can be as fast as 24 hours
  • No minimum credit score requirement
  • Get a soft credit inquiry with pre-qualification

Avant is an online company that offers debt consolidation loans for bad credit, with customers often in the 600 to 700 credit scores. Sending in an application requires origination fees plus a late payment fee if you fail to make payments on time. However, those who want to borrow loans have the option to reschedule their required payments at any time, which is beneficial for life or work changes.

3. Best Credit Union Loan: First Tech Federal Credit Union

  • No origination fee
  • Options to have co-borrowers
  • Accessible online lender website

First Tech Federal Credit Union from Oregon offers personal loans to the members of their union members. If you are not a member, you can get their loans after settling an $8 membership.

Moreover, you can loan as low as $500 with reasonable interest rates for people with less-than-stellar credit. However, it is notable that they will have a hard pull on your credit report to process your application.

4. Best for Accessible Social Proof: Upgrade

  • Get a peek at the experience of others
  • Get a loan with a minimum score of 600
  • Borrow as little as $1,000

Upgrade offers quick and easy access to personal loans and other financial products, even for people with less than perfect credit scores. For those who have more trouble getting approval, secured loans are available, as well. Lastly, the APR can range from 6.94% to 35.97%.

5. Best for Consolidating Credit Card Debt: Payoff

  • Offers personality, stress, and cash flow assessments plus other financial tools
  • No application fees nor prepayment fees
  • No late fees if you miss a payment

If you felt like you went overboard with charging your credit cards? Payoff provides fixed-rate options to help you pay off your debt. By providing a lower annual percentage rate, borrowers are given the opportunity to build their credit, especially as Payoff sends debt payments to the credit unions.

Frequently Asked Questions

What Are The Benefits of a Debt Consolidation Loan?

When you get a debt consolidation loan, you simplify your current debts by reducing the payments you have to make each month. You can combine debt from credit cards, student loans, and other types of loans into one to minimize the possibility of being late. Depending on your credit score, you can reduce the interest rates or lower the payments you have to pay every month.

How Do I Qualify for a Debt Consolidation Loan?

Every lender has its own set of requirements. Some have a set minimum credit score. Others look at your debt-to-income ratio or your annual income as the basis of your approval.

Does Debt Consolidation Hurt My Credit Score?

There is a high possibility that a debt consolidation loan will hurt your credit score. However, this lower credit score will just be temporary, only for the hard credit check that the lender must do on credit unions for your approval.

Once you get approved, you can get your way out of a bad credit report by sticking to paying regularly and never miss your deadlines.

How Can A Debt Consolidation Loan Help My Monthly Payments?

It aims to combine high-interest debts into a new loan. The goal, hopefully, is to get a singular loan with lower interest rates to help you get back on track, especially if you want to get rid of bad credit and out of debt.

How Does a Debt Consolidation Loan Work?

With a debt consolidation loan, you will be given funds to pay for the amount you currently owe in your existing debts. Once you get the loan approved now is the time to settle all your existing loans or, in some cases, have the lender settle your payments for you. Now, the challenge to a better credit score lies in hitting your monthly payments regularly.

Consolidating debt can be the perfect solution to help secure a loan with bad credit. If you want to expand your knowledge on getting rid of debt, feel free to explore the rest of the resources on AnyCredit.com. Learn more about debt consolidation loans when you check out Any Credit's comparison of the best lenders for all types of credit here!

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