Can you get a debt consolidation loan with no credit check?

If your debt isn’t working for you, there are things you can do to change it. You have the power to shape your debt into something manageable, and that’s an exciting feeling. Debt consolidation is one way to streamline and organize your finances. If you move your higher-interest debt to a lower-interest loan, you could lower costs, get a more manageable payment, or both.

To get a debt consolidation loan, you’ll usually need to pass a credit check. But there are workarounds if you’re still working on building your credit. Let’s look at some of them. 

What is a no-credit-check debt consolidation loan?

A no-credit-check debt consolidation loan is money that you borrow to pay off higher-interest debt, but without having to pass a credit check first. 

Lenders usually set several requirements before they approve new applicants for different debts. Here are a few examples of the factors they might consider:

• Your credit score

• Your income 

• Other monthly debt payments you make

• Any negative marks on your credit report

Remember that each lender is different. Just because one lender sets a certain requirement doesn’t mean that all other lenders have the same criteria. 

Do lenders offer debt consolidation loans with no credit check?

Most lenders will require a credit check to approve you for a debt consolidation loan. Some don’t, but they are few and far between. Not everyone is guaranteed to find a no-credit-check debt consolidation loan that works for them. 

Risks of no-credit-check loans

A no-credit-check debt consolidation loan might allow you to qualify without a good credit score. But there are important downsides to consider. You should understand the potential disadvantages so that you know what to expect and can weigh them against your other options:

• High cost. Without checking your credit, a lender has no way to know how likely it is that you’ll repay the loan as agreed. That makes the loan riskier to make, and lenders charge more for riskier loans. If the cost of your new loan is higher than your current debt, there may not be much point in consolidating.

• Not very common. No-credit-check loans do exist, but they can be very hard to find. There’s no guarantee you’ll find a lender that meets your needs without a credit check. 

• Smaller loan amounts. Lenders are more reluctant to lend larger sums of money without checking your credit. The amount lenders are willing to let you borrow may not be enough to consolidate your debts. 

• Higher qualifications in other areas. Some lenders offer no-credit-check loans by ramping up other requirements. You may need a higher income or collateral (something you own of value that your lender can take if you don’t pay the money back).

Other ways to consolidate debt if you have bad credit

It’s worth looking around and comparing any options you can find for a no-credit-check debt consolidation loan. But okay—let’s say you’ve done that. It’s good to be aware of your other options for handling debt, too. That puts more power back in your hands so you can figure out what works best for your unique situation. 

Here are some ways lots of other people have gotten debt consolidation loans, even if they have bad credit:

• Use collateral. Homeowners may be able to use a home equity loan to consolidate debt. Some lenders also accept vehicles and savings account balances as collateral. 

• Get a co-signer. Getting approved for a debt consolidation loan might be easier if you apply with a trusted friend or family member who has good credit. Co-signing means agreeing to repay the debt if you don’t pay it on your own, so it’s a big favor to ask.

• Try a credit union. The credit score requirements might be more forgiving at a credit union. Many accept applications from borrowers with poor credit.

If taking out a debt consolidation loan really isn’t in the cards for you, there are still other options to consider:

• DIY debt payoff plan. If you can afford to pay extra for a bit, using the debt avalanche or debt snowball methods could help you pay down your debt even faster.

• Debt management plan. Nonprofit credit counseling agencies offer customized debt management plans, mainly for credit card debt. The plan is designed to fully pay off your debt within three to five years.  

• Debt resolution. Resolving debt means negotiating with your creditor to accept less than you owe and forgive the rest. Creditors might be willing to do this if you have a financial hardship. You can negotiate your own debts or work with a professional debt resolution company that negotiates for you. 

• Bankruptcy. Although it has a bad rap, bankruptcy could offer financial relief and help you get your life back on track. Bankruptcy is legal protection from your creditors. 

How to avoid debt traps and break the debt cycle

You’re not a bad person if you’ve gotten into more debt than you can manage. It happens to everyone at some point or another. You can take charge and dodge some of these scenarios going forward, though, if you know a few tricks and strategies.

Many people find a budget helps them manage their money better. Look for a budgeting app or program that works for you, and definitely make room in your budget for treats and nice things. Try to make room for healthy habits so you can potentially ward off expensive health issues.

Planning is a big part of getting and keeping your financial life on track. Create savings and budgeting milestones to stay motivated. Save up an emergency fund so you’re prepared for life’s surprises. Create short-term goals to save for, like vacations, holiday gifts, and home repairs. 

A few other tips could help: 

• Consider working with a credit or financial counselor to build your financial skills.

• Learn how to build a strong credit profile so you can qualify for affordable financing.

• Once you clear your debts, try to avoid carrying credit card balances from month to month.