BEST OF

Best Home Improvement Loans With Bad Credit

You have choices for a home improvement loan if you have a bad credit score. Online lenders, credit unions and FHA lenders may provide options.

Feb 8, 2022

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It may be more difficult to get a home improvement loan with a bad credit score (629 or lower FICO), but you still have options.

Some lenders that offer personal loans for home improvement look beyond your credit score when they review your loan application and may tailor their loan specifically to bad-credit borrowers.

Here are the best home improvement loans for bad credit:

  • Upgrade: Best for borrowers who want credit-building tools.

  • OneMain Financial: Best for borrowers who want a secured loan.

  • Upstart: Best for borrowers with thin credit history.

  • LendingClub: Best for borrowers who want budgeting help.

  • Universal Credit: Best for borrowers with low credit scores.

  • Navy Federal: Best for credit union members who want a large loan with an extended repayment term.

Best Home Improvement Loans With Bad Credit

Our pick for

Bad credit home improvement loans with credit-building tools

Upgrade
Get rate

on Upgrade's website

Upgrade

5.0

NerdWallet rating 
Upgrade

Est. APR

7.96-35.97%

Loan amount

$1,000-$50,000

Min. credit score

560
Get rate

on Upgrade's website


Min. credit score

560

Key facts

Upgrade looks more closely at an applicant’s free cash flow than their credit score. You can also add a co-signer or co-borrower to a loan application to improve your chances of getting a low rate.

Pros

  • Secured and joint loans.

  • Multiple rate discounts.

  • Mobile app to manage loan payments.

  • Direct payment to creditors with debt consolidation loans.

  • Long repayment terms on home improvement loans.

Cons

  • Origination fee.

  • No option to choose your payment date.

Qualifications

  • Minimum credit score: 560.

  • Minimum number of accounts on credit history: 1 account.

  • Maximum debt-to-income ratio: 75%, including the loan you're applying for.

  • Minimum length of credit history: 2 years.

  • Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security and other sources.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: 1.85% to 8.99%.

  • Late Fee: $10.

  • Failed payment fee: $10.

Disclaimer

Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 7.96%-35.97%. All personal loans have a 1.85% to 8.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.59% APR (which includes a 13.94% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the life of the loan, your payments would total $12,293.46. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's bank partners. Information on Upgrade's bank partners can be found at https://www.upgrade.com/bank-partners/.

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Our pick for

Secured bad credit home improvement loans

OneMain
Get rate

on OneMain Financial's website

OneMain Financial

4.0

NerdWallet rating 
OneMain

Est. APR

18.00-35.99%

Loan amount

$1,500-$20,000

Min. credit score

None
Get rate

on OneMain Financial's website


Min. credit score

None

Key facts

OneMain doesn’t consider a borrower’s credit score as closely as it considers the score it generates itself for applicants. The lender says it can fund a loan within a couple of business days.

Pros

  • Option to choose and change your payment date.

  • Joint and secured loans.

  • Fast funding.

  • Direct payment to creditors on debt consolidation loans.

Cons

  • Rates are high compared to other lenders.

  • Charges origination fee.

  • No rate discounts.

  • Pre-qualification does not allow borrowers to preview potential rates.

Qualifications

  • Must have a Social Security number or taxpayer identification number.

  • Must be 18 or older in most states.

  • Minimum credit score: None.

  • Minimum number of accounts on credit report: None, but applicants with no credit history may not qualify.

  • Minimum income: None; this lender accepts income from employment, alimony, retirement, child support, Social Security payments, investments and public assistance.

Available Term Lengths

2 to 5 years

Fees

  • Origination fee: $25 to $500 or 1% to 10% of the loan amount.

  • Late fee: $5 to $30 or 1.5% to 15% of your monthly payment.

  • Non-sufficient funds fee: $15.

Disclaimer

Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Maximum annual percentage rate (APR) is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. Depending on the state where you open your loan, the origination fee may be either a flat amount or a percentage of your loan amount. Flat fee amounts vary by state, ranging from $25 to $300. Percentage-based fees vary by state ranging from 1% to 10% of your loan amount subject to certain state limits on the fee amount. Active duty military, their spouse or dependents covered under the Military Lending Act may not pledge any vehicle as collateral for a loan. OneMain loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z, such as college, university or vocational expenses; for any business or commercial purpose; to purchase securities; or for gambling or illegal purposes. Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. Ohio: $2,000. Virginia: $2,600. Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: North Carolina: $7,500. New York: $20,000. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.

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Our pick for

Bad credit home improvement loans for thin credit history

Upstart
Get rate

on Upstart's website

Upstart

4.5

NerdWallet rating 
Upstart

Est. APR

5.42-35.99%

Loan amount

$1,000-$50,000

Min. credit score

None
Get rate

on Upstart's website


Min. credit score

None

Key facts

Upstart considers factors outside a borrower’s credit profile, like education, job history and residence. The lender says it can fund most loans the business day after an application is submitted.

Pros

  • Accepts borrowers new to credit.

  • Fast funding.

  • Option to change your payment date.

  • Option to pre-qualify with a soft credit check.

  • Offers free financial education

Cons

  • May charge origination fee.

  • No joint, co-signed or secured loans.

  • No mobile app to manage loan.

  • Only two repayment term options.

Qualifications

  • Minimum credit score: None.

  • Minimum annual income: $12,000; this lender accepts income from employment, alimony, retirement, child support, Social Security, rentals, trusts, pensions, disability and scholarships.

  • Must have a full-time job or be starting a full-time job in six months.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 0% - 10%

  • Late fee: 5% of past due amount or $15, whichever is greater.

  • Returned check fee: $15.

Disclaimer

Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000), NM ($5,100), OH ($6,000). The full range of available rates varies by state. The average 5-year loan offered across all lenders using the Upstart platform will have an APR of 25.05% and 60 monthly payments of $25.80 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $15,478 including a $804 origination fee. APR is calculated based on 5-year rates offered in June 2022. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved. This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Rate and loan amount are subject to change based upon information received in your full application. This offer may be accepted only by the person identified in this offer, who is old enough to legally enter into contract for the extension of credit, a US citizen or permanent resident, and a current resident of the US. Duplicate offers are void. Closing your loan is contingent on your meeting our eligibility requirements, our verification of your information, and your agreement to the terms and conditions on the Upstart.com website.

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Our pick for

Bad credit home improvement loans with budgeting help

Lending Club
Get rate

on LendingClub's website

LendingClub

5.0

NerdWallet rating 
Lending Club

Est. APR

8.30-36.00%

Loan amount

$1,000-$40,000

Min. credit score

600
Get rate

on LendingClub's website


Min. credit score

600

Key facts

LendingClub accepts joint loan applications, which can help you qualify for a lower rate. The lender also offers a tool that helps borrowers manage their money and view their credit profile.

Pros

  • Joint loan option.

  • Direct payment to creditors with debt consolidation loans.

  • Option to pre-qualify with a soft credit check.

  • Option to change your payment date.

Cons

  • Origination fee.

  • Late fee.

  • No mobile app to manage loan.

Qualifications

  • Minimum credit score: 600.

  • Maximum DTI: 60%; 40% for joint applicants.

  • Minimum credit history: 37 months and 2 accounts.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 3% to 6%.

  • Late fee: 5% of payment or $15 after 15-day grace period.

Disclaimer

Between April 2022 and June 2022, Personal Loans issued by LendingClub Bank were funded within 44 hours after loan approval, on average. The time it takes for a loan to be funded is not guaranteed and individual results vary based on multiple factors, including but not limited to investor demand. A representative example of payment terms for a Personal Loan is as follows: a borrower receives a loan of $16,980 for a term of 36 months, with an interest rate of 13.49% and a 6.00% origination fee of $1,019, for an APR of 17.89%. In this example, the borrower will receive $15,961 and will make 36 monthly payments of $576. Loan amounts range from $1,000 to $40,000 and loan term lengths range from 24 months to 60 months. Some amounts, rates, and term lengths may be unavailable in certain states. For Personal Loans, APR ranges from 8.30% to 36.00% and origination fee ranges from 3.00% to 6.00% of the loan amount. APRs and origination fees are determined at the time of application. Lowest APR is available to borrowers with excellent credit. Advertised rates and fees are valid as of July 11, 2022 and are subject to change without notice. Loans are made by LendingClub Bank, N.A., Member FDIC, Equal Housing Lender (“LendingClub Bank”), a wholly-owned subsidiary of LendingClub Corporation, NMLS ID 167439. LendingClub Bank is not an affiliate of NerdWallet Compare, Inc. which is an unrelated third party (“third party”). LendingClub Bank is not responsible for any products and services provided by this third party and may receive compensation if you visit the third party’s websites or use any of its products or services. Credit eligibility is not guaranteed. Loans are subject to credit approval and may be subject to sufficient investor commitment before they can be funded or issued. Certain information that LendingClub Bank subsequently obtains as part of the application process (including but not limited to information in your consumer report, your income, the loan amount that your request, the purpose of your loan, and qualifying debt) will be considered and could affect your ability to obtain a loan. Loan closing is contingent on accepting all required agreements and disclosures at Lendingclub.com. “LendingClub” is a trademark of LendingClub Bank.

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Our pick for

Bad credit home improvement loans for low credit scores

Universal Credit
Get rate

on Universal Credit's website

Universal Credit

4.5

NerdWallet rating 
Universal Credit

Est. APR

11.69-35.93%

Loan amount

$1,000-$50,000

Min. credit score

560
Get rate

on Universal Credit's website


Min. credit score

560

Key facts

A Universal Credit loan is an option for bad-credit borrowers with high debt-to-income ratios, but rates are high compared to similar lenders.

Pros

  • Offers direct payment to creditors with debt consolidation loans.

  • Fast funding.

  • Offers multiple rate discounts.

  • Offers free credit score access.

Cons

  • Charges origination fee.

  • Borrowers can choose from only two repayment term options.

Qualifications

  • Minimum credit score: 560.

  • Minimum number of accounts on credit history: 1 account.

  • Maximum debt-to-income ratio: 75%, including mortgage and the loan you’re applying for.

  • Minimum length of credit history: 2 years.

  • Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security and other sources.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 5.25% to 8.99%.

  • Late fee: Up to $10.

Disclaimer

Personal loans made through Universal Credit feature Annual Percentage Rates (APRs) of 11.69%-35.93%. All personal loans have a 5.25% to 8.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 36 to 60 months. For example, if you receive a $10,000 loan with a 36-month term and a 28.47% APR (which includes a 22.99% yearly interest rate and a 7% one-time origination fee), you would receive $9,300 in your account and would have a required monthly payment of $387.05. Over the life of the loan, your payments would total $13,933.62. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early.

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Our pick for

Large bad credit home improvement loans with extended repayment terms

Navy Federal Credit Union Personal Loan
See my rates

on NerdWallet's secure website

Navy Federal Credit Union Personal Loan

5.0

NerdWallet rating 
Navy Federal Credit Union Personal Loan

Est. APR

7.49-18.00%

Loan amount

$250-$50,000

Min. credit score

None
See my rates

on NerdWallet's secure website


Min. credit score

None

Key facts

Navy Federal personal loans may be a good fit for most members, thanks to flexible amounts, consumer-friendly features and quick funding time.

Pros

  • Wide range of loan amounts.

  • Fast funding.

  • Rate discount for some customers.

  • Co-sign, joint and secured loan options.

  • Direct payment to creditors with debt consolidation loans.

Cons

  • Exclusive to credit union members.

  • No option to pre-qualify with a soft credit check.

  • No option to choose or change your payment date.

Qualifications

  • Must be a Navy Federal Credit Union member to apply.

  • No minimum credit score requirement.

Available Term Lengths

1 to 5 years

Fees

  • Origination fee: None.

  • Late fee: $29.

  • Returned payment fee: $29.

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Bad credit home improvement loans vs. home equity financing

If you have equity in your home, borrowing against it could be an affordable way to finance the renovation. While you typically need a credit score of at least 620 FICO, lenders may offer home equity loans and lines of credit because the home is collateral for the loan, meaning they can take it if you fail to repay.

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 you need for about 10 years. Repayment terms can be 15 to 20 years for these financing options, which keeps monthly payments lower than a personal loan.

It may be easier to qualify for a cash-out refinance, which is a new mortgage that’s larger than the existing one. You “cash out” the difference between what you currently owe and the new loan and use the funds for the renovation. This is typically a good option if rates are lower than what you’re currently paying.

How to compare home improvement loans with bad credit

A home improvement loan could be a good choice if you don’t want to tap home equity or max out your credit cards on the project. Just be prepared for high interest rates if you have bad credit.

Here are some 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. APRs are usually 6% to 36%, but borrowers with low credit scores can expect an APR around 27% to 30%. Use APR to compare the cost of one personal loan to another or to compare it to other financing options.

  • Monthly payments: A home improvement loan calculator lets you preview the loan’s monthly payment at different rates and repayment terms. This can help you decide what loan offer you need to stay within your budget.

  • Repayment terms: Bad credit home improvement loans often have repayment terms of one to five 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.

  • Fast funding. Many lenders can fund a loan in less than a week, and some say they can get you the funds the day you apply. If you’re paying for an urgent repair or an in-progress project, look for a lender that offers same- or next-day funding.

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.

  • Stay on top of payments. Your payment history is the biggest factor influencing your credit score. On-time bill payments look good on a loan application and help you build credit.

  • Pay existing debts to lower your debt-to-income ratio. Most lenders want to see that you have enough cash each month to cover existing expenses, plus the extra loan payment.

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

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. You can pre-qualify with multiple online lenders at once on NerdWallet.

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. You usually need a minimum credit score of 500 to qualify for any FHA-insured loan.

Rates vary by lender but are often lower than personal loans for funding home improvement projects.

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 a HUD consultant to complete an inspection.

FHA 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 they allow you and your friend or relative to decide on interest and repayment terms.

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

Last updated on February 8, 2022

Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial institutions. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. 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. 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.

This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. 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
  • OneMain Financial : Best for Secured bad credit home improvement loans
  • Upstart: Best for Bad credit home improvement loans for thin credit history
  • LendingClub: Best for Bad credit home improvement loans with budgeting help
  • Universal Credit: Best for Bad credit home improvement loans for low credit scores
  • Navy Federal Credit Union Personal Loan: Best for Large bad credit home improvement loans with extended repayment terms

Frequently asked questions