Best Home Improvement Loans With Bad Credit

Ronita Choudhuri-WadeAnnie Millerbernd
Written by
and
Last updated on July 11, 2024
Edited by
✅ Fact checked and reviewed
Kim Lowe
Edited by
✅ Fact checked and reviewed

Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. This does not influence our product evaluations or star ratings.

View Advertiser Disclosure +
  • 35+ personal loans reviewed and rated by our team of experts.
  • 20+ years of combined experience covering personal loans and financial topics.
  • Objective, comprehensive star rating system assessing 20+ categories and 70+ data points.
  • Governed by NerdWallet's strict guidelines for editorial integrity.
NerdWallet's personal loans content, including articles, reviews and recommendations, is produced by a team of writers and editors who specialize in consumer lending. Their work has appeared in The Associated Press, USA Today, The New York Times, MarketWatch and many other national, regional and local publications. They have been cited in publications including The Harvard Kennedy School, and appeared on NerdWallet's "Smart Money" podcast as well as local TV and radio.

Compare personal loan rates in just 2 minutes

Check rates from multiple lenders at once Explore loans up to $100,000 There’s NO impact on your credit score
Featured partners for Personal Loans
See all Lenders
Lender Name
Line one is longer text about the lender that is not long enough to wrapLine two is shorter

Best Home Improvement Loans With Bad Credit

Lender
NerdWallet Rating
Est. APR
Loan amount
Min. credit score
Learn more
Upgrade

Upgrade

Get rate
on Upgrade's website
on Upgrade's website
View details
Best for Bad-credit home improvement loans with credit-building tools
Rate discount

8.49-35.99%

$1,000-$50,000

560

BestEgg

Best Egg

4.5
/5
Best for Secured bad-credit home improvement loans
Secured loans
Wide range of loan amounts

8.99-35.99%

$2,000-$50,000

600

Upstart

Upstart

4.5
/5
Best for Bad-credit home improvement loans for thin credit history
Fast funding
Flexible payments

7.80-35.99%

$1,000-$50,000

None

LendingPoint

LendingPoint

4.5
/5
Best for Bad-credit home improvement loans with payment flexibility
Fast funding
Flexible payments

7.99-35.99%

$2,000-$36,500

660

Universal Credit

Universal Credit

4.0
/5
Best for Bad-credit home improvement loans for low credit scores
Fast funding
Rate discount

11.69-35.99%

$1,000-$50,000

560

4.0
/5
Best for Bad-credit home improvement loans with fast funding
Fast funding
Flexible payments

9.95-35.99%

$2,000-$35,000

550

Our pick for

Bad-credit home improvement loans with credit-building tools

Upgrade
Get rate
on Upgrade's website
on Upgrade's website
Upgrade

Upgrade

5.0
Est. APR

8.49-35.99%

Loan amount

$1,000-$50,000

Min. credit score

560

Our pick for

Secured bad-credit home improvement loans

BestEgg

Best Egg

4.5
Est. APR

8.99-35.99%

Loan amount

$2,000-$50,000

Min. credit score

600

Our pick for

Bad-credit home improvement loans for thin credit history

Upstart

Upstart

Est. APR

7.80-35.99%

Loan amount

$1,000-$50,000

Min. credit score

None

Our pick for

Bad-credit home improvement loans for low credit scores

Universal Credit

Universal Credit

Est. APR

11.69-35.99%

Loan amount

$1,000-$50,000

Min. credit score

560

Our pick for

Bad-credit home improvement loans with fast funding

Avant

Avant

Est. APR

9.95-35.99%

Loan amount

$2,000-$35,000

Min. credit score

550

Our pick for

Bad-credit home improvement loans with payment flexibility

LendingPoint

LendingPoint

Est. APR

7.99-35.99%

Loan amount

$2,000-$36,500

Min. credit score

660

Bad credit home improvement loans vs. home equity financing

Personal loans

A home improvement loan is a personal loan used for home repairs or renovations. Unsecured personal loans don’t require collateral; instead, lenders consider your credit score, credit history and debt-to-income ratio (DTI) to determine whether you qualify. Some look at additional factors like your employment and educational history.

Loan amounts can go up to $50,000, and rates range from 6% to 36%. Borrowers with bad credit may receive lower loan amounts than requested, higher interest rates and shorter repayment terms of two to five years.

» MORE: How do home improvement loans work

Home equity loans and lines of credit

If you have equity in your home, borrowing against it can be an affordable way to finance a renovation. Home equity loans let you lock in a fixed interest rate for a lump sum of cash. HELOCs are open credit lines with variable rates that you draw from as needed for about 10 years. Repayment terms for both can be 10 to 30 years.

Compare to personal loans: Home equity loans and credit lines often have lower rates and longer repayment terms than personal loans. However, equity financing typically requires a home appraisal, which can delay funding by a few weeks. Personal loans are typically approved and funded within a few days.

Typically, the interest on home equity financing is tax-deductible if you use the funds to pay for home improvements. This isn’t true for personal loans.

Cash-out refinance

A cash-out refinance lets you exchange your current mortgage for a larger one and “cash out” the difference between what you currently owe and the new loan. You use the leftover funds for the renovation. It's typically a good option if rates are lower than what you’re currently paying.

Compare to personal loans: A cash-out refinance for home improvement projects should have two benefits: You can finance a remodel and lower your mortgage rate. A personal loan will only help you pay for remodeling. A cash-out refinance may be better for larger projects because closing costs can exceed the cost of smaller updates. There are no closing costs with personal loans.

Frequently asked questions

  • Some lenders say they’ll accept a credit score as low as 550, but higher is better. Even lenders that tailor their loans to bad-credit borrowers may seek a credit score of 600 or higher. Find out what credit score you need to get a personal loan.

  • If you have bad credit, you may still qualify for a home improvement loan. You can improve your chances of getting a good rate by fixing any errors on your credit reports, adding a co-signer and pre-qualifying with multiple lenders. Learn more about how to get a loan with bad credit.

  • Home improvement loans may be a good idea when used toward renovations that improve the value of your home or repairs that improve livability and safety. The monthly loan payments should fit comfortably into your budget.

How to qualify for a bad credit home improvement loan

Your credit score is a major factor in deciding whether you get a personal loan, but there are a few things you can do to improve your chances.

  • Check your credit. Review your credit report and fix any errors that may be hurting your score. You can access a free credit report with NerdWallet or at AnnualCreditReport.com. Also, if you can, try to pay down any existing debts to lower your debt-to-income ratio. Most lenders want to see that you have a DTI below 65% including your mortgage, and enough cash each month to cover existing expenses, plus the extra loan payment.

  • Pre-qualify. Many lenders let you pre-qualify online to preview your potential rate and loan amount. The process doesn’t require a hard credit pull, so your score won’t be affected, and it can set expectations for the loan you may get.

  • Add a co-signer or co-borrower. Adding someone with better credit and a high income to vouch for you on the application can boost your chances of qualifying or get you a lower rate. However, your co-applicant must repay the loan if you fail to.

  • Get a secured personal loan. With a secured loan, you attach collateral to the application, like a car, in exchange for a lower rate. The lender can take the collateral if you don’t make the payments.

How to compare home improvement loans with bad credit

A home improvement loan could be a good choice if you can't tap equity or don’t want to max out your credit cards to pay for the project. Here are features to compare among bad credit home improvement loans.

APR

The annual percentage rate reflects the full cost of a loan, including any fees the lender charges. An APR provides an apples-to-apples cost comparison, which is useful when comparing personal loans and other financing options. Borrowers with bad credit can expect a rate on the high end of lenders’ ranges.

Monthly payments

A home improvement loan calculator lets you preview a loan’s monthly payment at different rates and repayment terms. This can help you determine what loan offer you need to stay within your budget.

Repayment terms

Bad credit home improvement loans often have repayment terms of two to seven years, but some lenders have more limited options. A longer-term loan will have lower monthly payments but higher overall interest costs, so look for a term that strikes a balance.

Funding time

Many lenders can fund a loan in less than a week, and some say they can get you the funds within 24 hours. If you’re paying for an urgent repair or an in-progress project, look for a lender offering fast funding.

How to get a home improvement loan with bad credit

  1. Get a firm cost estimate. Having a firm estimate of your project’s cost can help you decide how much you need to borrow and which financing option will be a good fit. If you’re not sure of the cost, the flexibility of a line of credit may be helpful, while a set price tag can make a fixed interest rate loan a good idea. 

  2. Compare borrowing options. Compare a home improvement loan against equity financing or other options. The best choice has the lowest APR, payments that fit your budget and a funding time that works with your repair or renovation timeline. 

  3. Pre-qualify. Many online personal loan lenders and some banks let borrowers pre-qualify for a loan with a soft credit check to see potential offers before applying. Pre-qualifying can give you an idea of your rate, term and monthly payments.

  4. Gather your documents. Before starting an application, collect the documents and information you will need. Lenders want to see documents to verify your identity, employment and sources of income.

  5. Apply. Many lenders have online applications, although some banks or credit unions may require you to apply in person. Some lenders provide same-day credit decisions, and many can fund a loan within a day or two.  

Home improvement loan alternatives for bad-credit borrowers

Government-insured loans for home improvements

Home improvement loans insured by the Federal Housing Administration are similar to conventional mortgages but have looser qualification requirements. Rates vary by lender but are often lower than personal loans.

FHA 203(k) renovation loan: With a 203(k) loan, you refinance your existing mortgage and roll home improvement costs into the new mortgage. In addition to meeting a lender’s credit requirements, borrowers must have no foreclosures within the past three years.

The 203(k) loan process can be time-consuming. You must work with a mortgage lender to pre-qualify, a general contractor to create a scope of repairs and potentially a consultant from the U.S. Department of Housing and Urban Development (HUD) to complete an inspection.

Title I loan: The requirement to get this type of loan is pretty broad. According to the HUD website, this loan can be used for home improvements that “substantially protect or improve the basic livability or utility of the property.”

Title I loans under $7,500 are unsecured, while larger loans must be secured by a mortgage or deed of trust on the property, according to HUD.

Family loans

If you don’t qualify for another type of loan but urgently need a small amount of cash, it may be worth asking a friend or relative to lend you the money. Family loans don’t require good credit and allow you and your friend or relative to decide on interest and repayment terms.

With this type of loan, your relationship is collateral and if you’re not careful, it could cause conflict.

Last updated on July 11, 2024

Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 35 technology companies and financial institutions. We collect over 50 data points from each lender and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.

To recap our selections...

NerdWallet's Best Home Improvement Loans With Bad Credit

  • Upgrade: Best for Bad-credit home improvement loans with credit-building tools
  • Best Egg: Best for Secured bad-credit home improvement loans
  • Upstart: Best for Bad-credit home improvement loans for thin credit history
  • Universal Credit: Best for Bad-credit home improvement loans for low credit scores
  • Avant: Best for Bad-credit home improvement loans with fast funding
  • LendingPoint: Best for Bad-credit home improvement loans with payment flexibility
NerdWallet Pixel