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The minimum credit score needed for a debt consolidation loan is only part of the equation required for approval. You must earn enough money to afford the projected monthly payment while covering other expenses such as housing payments at the same time.

The debt consolidation company will require a decent rating combined with affordable monthly payments. Your credit score drives the interest rate and repayment term, which in turn alter how much you must repay each month.

Qualifying for an unsecured debt consolidation loan is not hard. However, figuring out the correct principal amount to borrow is. Fortunately, our free calculator can help you arrive at the figure a lender might approve – based on all of your qualifications.

Requirements for Debt Consolidation Approval

The approval requirements for debt consolidation loans are more involved than most potential borrowers realize. Many people think that credit scores are the primary factor when affordability is often more critical.

Request a debt consolidation loan for an affordable amount (see calculator below). No lender will approve a consolidation loan with monthly payments that are so large that the borrower cannot find the money to repay the obligation – regardless of how high your credit score might be.

Therefore, the amount of debt you owe and want to combine is a critical factor along with your income, and other fixed monthly expenses such as housing payments.

Credit Score

The minimum credit score needed for a debt consolidation loan hinges on several interconnecting factors. A finance company could approve an individual with a poor score of 500 while declining another with a better score above 700.

First, you cannot answer the minimum credit score requirement question in isolation because each lender category targets a different borrower profile. Each type of lender might employ a different rating floor rule before considering an applicant.

Lender TypeLowest Score
Traditional Banks720
Peer-to-Peer640
Online Finance Company500

Second, FICO or Vantage scores influence three other lending criteria that go into an underwriting decision. Each lender type might follow the rules similar to those listed in the chart below for interest rate, maximum term length, and maximum debt-to-income ratio (DTI).

ScoreRateMax TermMax DTI
Best (750+)6.5%6055%
Better (700 – 749)12.5%6050%
Good (650 – 699)18.0%4845%
Poor (550 – 649)28.5%3640%
Bad (549-)35.99%2435%

Debt-to-Income Ratio

The projected debt-to-income (DTI) ratio is a second debt consolidation qualifier that people often overlook when seeking approval for a loan. Lenders use the DTI to assess whether you can afford the make the future monthly payments on time without becoming delinquent or defaulting.

The finance companies use this simple formula to arrive at the ratio.

DTI = monthly debt service payments/monthly income

The projected monthly payment for the new loan is a major component to the numerator in the DTI fraction (monthly debt service payments for all obligations). The numerator also includes housing payments (rent or mortgage) along with other obligations that might remain after consolidation.

As you can see, the all-important projected monthly payment is hard to estimate without a calculator. Each credit score range results in a unique combination of interest rate, repayment term, and max DTI. All three of these factors impact the projected payment number.

Free Debt Consolidation Calculator

Take advantage of this free debt consolidation calculator to determine how hard it might be to find a company willing to approve your unsecured loan request: given your credit score, and your projected DTI ratio. Unsecured contracts have stricter requirements because the lender cannot repossess collateral in the event of default.


Request an unsecured debt consolidation loan here. Be careful to input the request amount that lenders are likely to approve based on the calculator’s output. See below for further instructions.


Principal Amount

Use the free calculator to estimate the level of credit card and other debt you can consolidate into a single unsecured loan payment. There is little we can do in the short-term to boost credit scores, increase income, or cut housing expenses. However, we can alter the size of the original principal amount requested.

The original principal amount plays a significant role in determining the affordability of the projected monthly payment. The more you request, the higher your monthly payment will be and vice versa. This simple chart illustrates how the monthly principal-only payment changes with original amount while holding the repayment terms at 36 months.

Original AmountMonthly Principal Payment
$5,000$139
$10,000$277
$15,000$417
$20,000$554
$25,000$694

Use the calculator to get an initial estimate of the principal amount you qualify to borrow.

  1. If the estimated sum exceeds the debt that you want to consolidate, stop. Many online finance companies will approve this request.
  2. If the estimated number is less than the debt that you want to consolidate, adjust the “Other Fixed Monthly Payment” field input. Increase the amount to reflect the ongoing payments for these remaining obligations.
  3. If the adjusted (lower) estimated sum is still less than the remaining debt owed, repeat step two until arriving at a suitable number

Interest Rates

The free debt consolidation calculator factors in how the interest rate (given your credit score) affects your ability to qualify for loan approval. However, interest rates are not the only costs associated with borrowed funding. You must also include several other financing charges that factor into the annual percentage rate (APR).

  • Origination fees vary from 2.5% to 5.0% and apply to the original balance upfront one time
  • Interest rates range from 6.9% to 35.99% and apply to the outstanding balance each period
  • Credit insurance premiums add to borrowing costs if required by the lender to approve the loan

Higher APR translates into larger monthly payments, which hurt your DTI ratio. Therefore, you may need to adjust the original principal amount lower to make the numbers work in your favor. Remember, you must keep your DTI within specific parameters.

Loan Terms

The free debt consolidation calculator also factors in how the maximum loan term (given your credit score) affects your ability to qualify for loan approval. The more time that the lender allows for repayment, the less you must pay each month.

Lowering the monthly payment is the best way to improve the projected DTI. Many people cannot boost their income right away. However, you can make payments more affordable very quickly by extending the term.

This simple chart illustrates how the principle only payment for a $15,000 loan shrinks as the term length grows. However, keep in mind that interest rates will be slightly higher for longer terms to reflect the higher default risk associated with extended terms.

Term Length (Years)Monthly Payment
1$1,250
2$625
3$417
4$313
5$250
Posted