Best Home Improvement Loans for Bad Credit

NerdWallet’s picks for the best home improvement loans for bad credit

When curating this list, we sought lenders that accept borrowers with bad credit and offer loan amounts small enough to cover minor repairs up to large loans for pricey home improvement projects.

Note that each one charges an origination fee, which is common among lenders that cater to borrowers with less-than-great credit.

Upstart: Best overall home improvement loan for bad credit

Upstart is unique in that it doesn’t have a minimum credit score and accepts borrowers with bad or thin credit. Rather than focus primarily on credit score, the online lender analyzes details like education and work history to determine who qualifies.

We appreciate that Upstart offers a wide range of loan amounts, from $1,000 to $75,000, which could cover a variety of home repairs. Approval typically happens right away, according to Upstart, and the loans are often funded in one business day. That fast turnaround can be essential for an emergency repair.

Upstart's origination fee: Up to 12% of the loan amount.

Upgrade: Best for co-signed loans

Upgrade is one of only a few lenders that allow co-signers, who vouch for you but can’t access your funds. So if Upgrade’s minimum credit score of 600 is steep, adding a co-signer with better credit can help you qualify or get approved for a lower interest rate. (You can also boost those odds with secured loans — Upgrade offers those, too.)

Upgrade’s origination fee: 1.85% to 9.99%.

Prosper: Best for joint loans

Prosper has a minimum credit score of 560 and offers joint loans. That means two borrowers apply together and — unlike with co-signed loans — share the loan funds and responsibility for payments. Joint loans are often easier to qualify for and can help you share the load of a significant home expense.

Prosper’s origination fee: 1% to 9.99%.

Best Egg: Best for secured loans

Like Upgrade, Best Egg has a minimum credit score of 600 and offers a secured loan option that may help you qualify or get a lower rate. For collateral, Best Egg accepts permanent home fixtures, such as built-in cabinets, light fixtures and bathroom vanities.

Best Egg’s origination fee: 0.99% to 9.99%.

Universal Credit: Best for small loans

While many lenders have minimum loan amounts of $2,000 or more, Universal Credit allows you to borrow as little as $1,000. That can be ideal for smaller projects that don’t warrant a larger loan, such as replacing a hot water heater or installing a kitchen backsplash. Universal Credit’s minimum credit score is 560.

Universal Credit's origination fee: 5.25% to 9.99%.

Avant: Best for customer support

Besides Upstart, Avant has the lowest minimum credit score (550) on this list. It also earned our highest rating for customer service (4.8 out of 5). Its customer service representatives are available seven days a week, and it offers hardship programs for borrowers facing financial difficulties. These accommodations may include payment deferment or temporary reductions and potentially extended terms.

Avant’s origination fee: Up to 9.99%.

How to qualify for a home improvement loan if you have bad credit

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 50% and 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 your application can boost your chances of qualifying or get you a lower rate. Just know that your co-applicant must repay the loan if you don’t.

Get a secured personal loan. With a secured loan, you attach collateral to the application to help your odds of approval or getting a lower rate. Lenders may accept a car, home fixtures or savings account as collateral, which they can take if you don’t make repayments.

» MORE: 6 ways to boost your chances of qualifying for a personal loan

How to compare home improvement loans

Here are features to compare among home improvement loans.

Rates. 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.

For reference, the lenders in this list have APRs below 36% — that’s the highest APR that experts consider to be affordable. The average APR for borrowers with bad credit (scores from 300 to 629) who pre-qualified for home improvement loans with NerdWallet over the last 30 days was 30.97% .

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. Home improvement loans that accept borrowers with bad credit typically have repayment terms of two to seven years, but some lenders have more limited options.

A longer-term loan has lower monthly payments but higher overall interest costs. Conversely, a shorter-term loan has higher monthly payments but costs less overall. Look for a term that strikes a balance.

Funding time. Many lenders can fund a loan within a couple days, 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 same- or next-day funding.

» MORE: How long does it take to get a personal loan

Personal loan calculator

Before applying for a loan, calculate your monthly loan payment and total interest costs, based on your desired loan amount, repayment term and estimated interest rate.

» MORE: How to get a personal loan with bad credit

Alternatives to personal loans if you have bad credit

Government-insured loans for home improvements

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. A qualifying credit score for an FHA loan can be as low as 500. Here are two FHA options:

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.

Keep in mind that 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 typically require a lien on the property, according to HUD.

Grants and assistance programs

If you need money for an essential repair, see if any government programs could help. For example, the U.S. Department of Agriculture’s Section 504 program offers low-cost loans and grants to qualifying rural homeowners.

Local governments and nonprofits may also help. Visit 211.org to see what resources may be available.

» MORE: 8 ways to cover the cost of emergency home repairs

Home equity borrowing

You may be able to pay for improvement costs by tapping your home equity — that’s the current market value of your home, minus what you owe. These options could include a home equity loan, home equity line of credit (HELOC) or a cash-out refinance.

However, equity financing typically requires strong credit. They may be a better fit if you have time to improve your score.

» MORE: How to borrow against home equity.

How we chose the best personal loans

Our team of consumer lending experts follows an objective and robust methodology to rate lenders and pick the best.

35+

Lenders reviewed

We review over 35 lenders, including major banks, top credit unions, leading digital platforms and high interest installment lenders operating across multiple states.

25+

Categories assessed

Each lender is evaluated across five weighted categories and 27 subcategories, covering affordability, eligibility, consumer experience, flexibility, and application process.

60+

Data points analyzed

Our team tracks and reassesses hundreds of data points annually, including APR ranges, fees, credit requirements, and borrower tools, ensuring up to date, accurate comparisons.

Star rating categories

We evaluate more categories than competitors and carefully weigh how each factor impacts your experience.

Affordability

25%

We review lenders’ annual percentage rate offerings and the competitiveness of each lenders’ APR range. We also assess whether a lender charges an origination fee and any opportunity for borrowers to receive a rate discount.

Customer experience

20%

We consider the experience of the consumer trying to manage a personal loan, which means accessibility of customer service representatives, whether borrowers can choose and change their payment due date, and the ability to track their loan on a mobile app.

Underwriting and eligibility

20%

We consider the rigorousness of each lender’s underwriting practices and how widely available their loans are. This category includes whether a lender does a hard credit check before providing a loan, the range of credit profiles they accept and how many states their loans are offered in.

Loan flexibility

20%

We assess how flexible lenders can be with borrowers, including whether they offer multiple loan types, personal loan amounts and repayment term options and whether they offer direct payment to creditors on debt consolidation loans.

Application process

15%

We consider the lender’s full application process, including a borrower’s ability to preview their loan offer via pre-qualification, whether basic loan information such as APR range and repayment terms are available and easy to find online and how quickly a loan can be funded after approval.

5.0

Overall score

NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial technology companies and financial institutions. We collect over 60 data points 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.

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