Debt Consolidation Loan Bad Credit Direct Lender

Writer and editor - Joseph Smith | Updated on 2020-03-04
Disclosure: Our goal is to help you find a lender even if you have a bad credit score. To maintain this site we may receive compensation from the products listed here. See our Advertiser Disclosure. Thanks for understanding.

What are debt consolidation loans for bad credit

Bad credit or a low FICO score, means that getting a loan is far more complicated. The purpose of debt consolidation is to bring your debts under one easy-to-manage umbrella. Here are the two main benefits:

  • A more straight-forward way to pay off debt
  • Lower interest rates

A debt consolidation loan brings your debt under one centralized roof and payment. It helps you pay off all standing debts and is not for down payments on big purchases.

Loans Amount Cost / APR ? Bad Credit Features
CashUSA
$500 - $10,000
Individual rates
Bad credit allowed
Allowed
  • Loan terms start at 3 months.
  • Next-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
QuickLoanLink (Personal loan) $300 - $35,000 APR:
Starting at 6.90% ?
Bad credit allowed
Allowed
  • Loan term 2 months to 7 years
  • Credit check type: Soft ?
  • Next-day deposit: In some cases ?
  • Min creditscore: 550
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
HonestLoans
$400 - $5,000
$30 - $750 ?
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
GazelleLoans
$300 - $5,000
Individual rates
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
LifeLoans (Personal loan) $500 - $40,000 APR:
Starting at 5.99% ?
Bad credit allowed
Allowed
  • Loan term 2 months to 5 years
  • Credit check type: Both ?
  • Next-day deposit: In some cases ?
  • Min creditscore: 580
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
CreditLoan (Personal loan) $100 - $40,000 APR:
Starting at 5.34% ?
Bad credit allowed
Allowed
  • Loan term 2 months to 7 years
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
OppLoans (Direct Lender)
(Personal loan)
$1,000 - $5,000 APR:
Starting at 99.00% ?
Bad credit allowed
Allowed
  • Loan term 9 months to 3 years
  • Next-day deposit: In some cases ?
  • Low approval rates ?
  • Time for decision: 1.5 min ?
RubikLoan
$100 - $1,000
$1,000 - $5,000
$15 - $300 ?
APR from 6.9% ?
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
Personal Loans (Personal loan) $500 - $35,000 APR:
Starting at 5.99% ?
Bad credit allowed
Allowed
  • Loan term 3 months to 6 years
  • Credit check type: Soft ?
  • Next-day deposit: In some cases ?
  • Min creditscore: 580
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
BadCredit.com
$100 - $5,000
Individual rates
Bad credit allowed
Allowed
  • Next-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
OpenCashAdvance
$200 - $5,000
Individual rates
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?

How to get a debt consolidation loan with bad credit

You will need to find a lender who will accept your credit score. No lender can guarantee approval, no matter what you hear.

Your best weapon for approval is to employ the diversity of tactics that each lender uses. Just because a bank or particular lender won’t issue you a loan, doesn’t mean the others won’t. Keep applying.

Here are some initial steps and tips to consider:

  • Free annual credit score – To get your annual credit score for free, go to Annual Credit Report. (not a FICO score)
  • FICO score – For your FICO score, check out Experian, Equifax, and TransUnion.
  • Two loans are easier than one – Know that approval for two smaller loans is easier to acquire than one larger lump-sum. For example, a $20,000 loan broken into two $10,000 loans is more likely to be approved.
  • Consolidate your credit card debt – Shift the bulk of your balances onto one card and have multiple credit cards. Credit agencies compare your available credit to the total debt you owe. If you have multiple cards with a high amount of available credit in comparison to the total debt, that can significantly boost your credit score.
  • 30% Is the magic number – Do everything you can to get the ratio of what you owe to the available credit at or below 30%. If you can get the proportion to 8%, you’ll see another increase in your credit score. But, be sure to keep the card balance over $10.
  • Don’t close empty accounts – Keep all your accounts with a balance of zero open to show the age of the account.
  • Open new lines of credit – Add more credit cards but keep a zero balance on them. Doing this raises your available credit. But, don’t start spending on these! Don’t open new cards too rapidly because this lowers your overall account age. Very little credit information or history is not helpful to your score.
  • Space out new cards – Put some amount of time in between opening new lines of credit. FICO watches all of this and distinguishes between a loan and a new line of credit.
  • Make payments early – Credit card companies don’t report your balance at the end of the month or when a bill is due. You can call to find out when each credit card reports to the bureaus. With that information, you can choose the best time to pay off balances and make sure your accounts look their best when it counts.
  • Make multiple payments a month – Not only will this help with having an optimal balance come reporting time, but this reduces that amount of interest paid.
  • Opt for a secured credit card – Secured credit cards help you build credit, and are perfect for people without any credit history. Apply with a cash deposit to set your credit limit. A secured credit card has a lower risk and doesn’t work on a traditional line of credit. However, in the eyes of credit agencies, you are using a credit card, thus building your credit.

Requirements for debt consolidation loans

Most lenders will dictate that the borrower meet the following basic requirements before approving their loans:

  • A credit check of some kind
  • One must be at least 18 years old – Older than 21 years of age is recommended and will increase the chances of approval.
  • One must be able to prove a monthly income of at least $800. However, the recommended monthly income is $2,000, and that’s pre-tax.
  • One must have an active bank account
  • An ID
  • Proof of income, such as a pay stub

Benefits of debt consolidation loan for bad credit

The benefits of a debt consolidation loan for bad credit are both financial and emotional. If you’ve been under the heavy rock of debt for some time, you can appreciate how important both of these are.

Here are the benefits:

  • One simple monthly payment – One payment that is paid to the lender that works to pay off each one of your debts.
  • Lower Interest rate – Consolidated debt means a single interest rate. Balance transfers often have lower interest rates.
  • Smaller payments – Increased time to pay off the loan breaks payments into smaller, more manageable chunks.
  • Easy to monitor and track – Not having to deal with multiple companies and dates of payment makes things simpler and reduces the chances of missing a payment.

Debt consolidation loan for bad credit – Direct lender vs. connector

Connectors are the option you are looking for because they :

  • Cover a wider geographic area – Direct lenders are small and only cover individual states, as do most bad credit lenders.
  • Enable you to connect with multiple direct lenders in your region – Connectors can have a big network of lenders centralized in one place.
  • Help you apply to multiple lenders with a single application – This is helpful if your credit score is low. You will likely need to apply to multiple lenders. You can apply to a connector instead of each lender individually.
  • Specialize in getting you approved – Connectors can find a lender that approves your application, even if your chances are 1 out of 100 of getting approved for a loan.

Save yourself the time and disappointment, go with a connector if you’re in the market for a debt consolidation loans with bad credit.

Joseph Smith

Joseph Smith
Writer and editor

Joseph Smith is an experienced freelance writer with over 11 years of experience. His area of expertise includes finance, loans and lending. His work has been featured on various large websites including this one.
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