When you’re juggling multiple debts, managing payments can get overwhelming. A debt consolidation loan can simplify your financial life by combining all your outstanding balances into a single loan with a lower interest rate. For individuals with fair credit (typically between 580–669), there are still options available to get low-interest consolidation loans in 2025.
In this guide, we’ll walk you through some of the best lenders offering low interest debt consolidation loans for fair credit and highlight their terms, eligibility requirements, and benefits.
🔍 What Is a Debt Consolidation Loan?
A debt consolidation loan is a type of loan used to pay off multiple existing debts, such as credit card balances, personal loans, or medical bills, by combining them into one single loan. This loan typically has a lower interest rate than your previous debts, making it easier to manage your payments and reduce the total amount of interest you pay over time.
🏆 Best Low Interest Debt Consolidation Loans for Fair Credit (2025)
1. Upgrade
- Loan Amounts: $1,000 – $50,000
- APR Range: 8.49% – 35.99%
- Loan Term: 36–60 months
- Minimum Credit Score: 560
- Key Feature: Offers free credit monitoring and financial tools
Best For: Fair credit borrowers seeking flexible terms and financial education tools.
2. Avant
- Loan Amounts: $2,000 – $35,000
- APR Range: 9.95% – 35.99%
- Loan Term: 24–60 months
- Minimum Credit Score: 580
- Funding Time: Next day
- Key Feature: Fixed monthly payments and easy online application process
Best For: Those looking for fast approval and fixed payment schedules.
3. LendingClub
- Loan Amounts: $1,000 – $40,000
- APR Range: 6.95% – 35.89%
- Loan Term: 36–60 months
- Minimum Credit Score: 600
- Key Feature: Offers peer-to-peer lending for better rates
Best For: Borrowers who prefer the peer-to-peer lending model with competitive rates.
4. OneMain Financial
- Loan Amounts: $1,500 – $20,000
- APR Range: 18% – 35.99%
- Loan Term: 24–60 months
- Minimum Credit Score: No minimum
- Key Feature: Offers both secured and unsecured loan options
Best For: Borrowers who prefer in-person service or need secured loan options to lower their rates.
5. Prosper
- Loan Amounts: $2,000 – $40,000
- APR Range: 7.95% – 35.99%
- Loan Term: 36–60 months
- Minimum Credit Score: 600
- Key Feature: Peer-to-peer lending platform with competitive interest rates
Best For: Borrowers seeking lower rates through a peer-to-peer lending platform.
📊 Comparison Table
| Lender | Loan Amount | APR Range | Loan Term | Minimum Credit Score | Key Feature |
|---|---|---|---|---|---|
| Upgrade | $1,000 – $50,000 | 8.49% – 35.99% | 36–60 months | 560 | Free credit monitoring tools |
| Avant | $2,000 – $35,000 | 9.95% – 35.99% | 24–60 months | 580 | Fixed monthly payments |
| LendingClub | $1,000 – $40,000 | 6.95% – 35.89% | 36–60 months | 600 | Peer-to-peer lending |
| OneMain Financial | $1,500 – $20,000 | 18% – 35.99% | 24–60 months | No minimum | Secured and unsecured options |
| Prosper | $2,000 – $40,000 | 7.95% – 35.99% | 36–60 months | 600 | Peer-to-peer lending platform |
✅ Tips for Getting Approved for a Low-Interest Debt Consolidation Loan
- Check your credit report: Review your credit report for errors before applying.
- Consider a co-signer: If your credit score is on the lower end of fair, having a co-signer may improve your chances of getting approved and securing a lower interest rate.
- Choose a secured loan: If you own assets like a car or home, you may qualify for a secured loan, which typically offers a lower interest rate than unsecured loans.
- Determine your loan amount: Only borrow what you need to pay off your existing debts, and avoid taking out additional funds.
- Make timely payments: Lenders will look at your payment history. Ensure you pay your bills on time to improve your credit score for future applications.
🧠 Final Thoughts
A low-interest debt consolidation loan can be a powerful tool to streamline your debt management. For those with fair credit, options like Upgrade, Avant, and LendingClub offer great terms and fast funding. It’s essential to compare different lenders, their terms, and your eligibility to ensure you get the best deal possible.
FAQs
Q. Will a debt consolidation loan affect my credit score?
A debt consolidation loan can initially lower your credit score slightly due to the hard inquiry, but it can improve your score over time by reducing your overall debt and lowering your credit utilization.
Q. Can I get a debt consolidation loan with a 580 credit score?
Yes, many lenders, such as Avant, offer debt consolidation loans for borrowers with a 580 credit score or higher.
Q. Are there any fees for debt consolidation loans?
Some lenders may charge origination fees, ranging from 1% to 6%, depending on the loan amount and the lender.