How to Get a Large Debt Consolidation Loan With Bad Credit

(February 2025)

How to Get a Large Debt Consolidation Loan With Bad Credit

In This Article

So you’ve got a lot of debt. You’re juggling payments on multiple credit cards and getting behind on your bills. You may consider a large debt consolidation loan to help you get back on track.

But is it even possible to get a large debt consolidation loan with bad credit? The answer is yes, but it won’t be easy. You’ll likely need to put up your home as collateral and pay a high-interest rate.

This article will walk you through applying for a large debt consolidation loan with bad credit. To get a large debt consolidation loan with bad credit, follow these steps:

  1. Review Your Credit Report
  2. Pay Off Your Debts
  3. Find a Cosigner
  4. Get a Secured Loan
  5. Find a Lender Who Specializes in Bad Credit
  6. Research Your Consolidation Loan Options

1. Review Your Credit Report

In your quest to get a debt consolidation loan with bad credit, review your credit report first to know where you stand and the best next line of action. Check your credit from all three credit bureaus—Equifax, Experian and TransUnion. You can also get a free credit score report from annualcreditreport.com.

If you find that your credit score needs improvement, use these tips:

  • Pay your loans on time, all the time.
  • Keep your credit utilization ratio below 30%. That means don’t max out your available credits. If you spend above 30% of your credit, pay them back as soon as possible.
  • Making too many credit inquiries damages your credit. While it looks like an innocent inquiry, it reflects on your credit report and sends the wrong message to lenders. Take credits only when you need them.
  • Check your credit reports regularly. Fact-check your credit report occasionally and dispute any errors you detect outright.

Of course, this isn’t going to be easy, but with a little hard work, you can get your finances back on track. With a good credit score, a lender will be more likely to collaborate with you.

2. Pay Off Your Debts

You’re in a tough spot. You have a lot of debts, and you don’t know how you will pay them all off. You need a large debt consolidation loan, but your credit isn’t good enough to get approved. To get a debt consolidation loan is to pay off your debts.

There’s no way you’ll be able to get a loan if you still have debts. It would be best to get organized and start paying off your debts. Once you’ve paid them all off, you can consider getting a loan. Although it is not as easy as it sounds, it’s worth it in the end. You’ll be glad you put in the effort when you’re debt-free.

Here are a few tips to help you pay off your debt effectively:

  • Pay more than the minimum. When you make extra payments monthly, you save on interest and, at the same time, pay off your debt faster.
  • Pay off your most expensive loan first. By paying off loans with the highest interest first, you reduce the interest amount you pay and your overall debt.
  • Adopt the snowball method of paying off debt. The snowball debt payment emphasizes paying off the smallest balances first, then working up to the highest balance.
  • Keep track of bills and pay them in less time. Stay on top of your debt by using electronic bill reminders and e-payments. With these tools, you can schedule when you want to pay your bills and the amounts you want to pay.

3. Find a Cosigner

Find a cosigner to get a debt consolidation loan to get your finances back on track. A cosigner is someone who agrees to be responsible for your loan if you can’t make the payments, which is a big commitment. You need to find someone who trusts you and knows you’re capable of paying back the loan.

The best way to find a cosigner is by asking family and friends. But be sure to tell them about the risks involved—if you can’t make the payments, the cosigner will be on the hook for the entire loan.

4. Get a Secured Loan

You can do a few things to get a large debt consolidation loan with bad credit. One option is to get a secured loan.

What’s a secured loan? It’s a loan backed by collateral, which means you put up something of value as security against the amount you borrow.

A secured loan is easier to get approved for because the lender knows that if you can’t make your payments, they can take back the collateral. So if you have some assets you can use as collateral, it might be worth considering a secured loan as your route to getting a debt consolidation loan.

5. Find a Lender Who Specializes in Bad Credit

To get a debt consolidation loan with bad credit, find a lender specializing in bad credit. There are plenty of them, and you don’t have to go through a bank. It might be a good idea to avoid banks altogether because they’re not always sympathetic to people with bad credit.

Several online lenders focus exclusively on bad credit loans and are more than happy to help you. Just do your research and make sure you choose a reputable company.

6. Research Your Consolidation Loan Options

You’re struggling with a lot of debt, and you need to find a way to consolidate it all into one manageable monthly payment. But you’re worried that your bad credit score will stand in the way of getting approved for a large loan. The good news is that there are still options available to you.

You need to do your research and find the right lender. Start by checking out online lenders. Many companies specialize in helping people with bad credit get the loans they need. And don’t be afraid to ask for referrals from family and friends. Chances are, someone they know has been in a similar situation and can recommend a good lender.

The bottom line is that there’s no need to give up on your dreams of consolidating your debt. Just be patient, do your research, and you’ll find the perfect loan for you.

Conclusion

You can do a few things to increase your chances of being approved for a large debt consolidation loan, even if you have bad credit.

First, review your credit report, make deliberate efforts to improve your credit score, and then pay off any debt you have. Third, get a cosigner to help increase your chances of loan approval. Also, consider taking a secured loan.

Finally, be patient and keep looking for lenders who will collaborate with you, even if your credit score is low and check your options to make the best choice.

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