The best home improvement loans with bad credit


If you have a home improvement project like repairing a roof or remodeling a kitchen, you may need a home improvement loan to pay for it. However, this can be difficult for someone with bad credit. Not all lenders will offer loans to people with lower credit brackets.

By exploring the best home improvement loans with bad credit, you can find the financing you need to cover a home improvement project and repair or improve your home.

Best home improvement loans with bad credit

Not all bad credit home improvement loans are created equal. That’s why it’s important to shop around and look at the different options available to you. When you do, be sure to compare factors like interest rates, terms, and fees so you can make the right choice for your situation.

OneMain Financial

OneMain Financial caters to borrowers with bad and fair credit. The lender offers quite small unsecured loans with a complex application process. Secured loans are also an option if you are willing to provide collateral. If you’re having trouble finding home improvement loans with bad credit, OneMain Financial might be the right person.

Benefits: You can take advantage of joint applications to add another person to your application. This can be useful if you think you won’t qualify on your own or if you want to improve your chances of being approved.

What to pay attention to: Loans are capped at $20,000, which might not be enough, depending on the home repair project you’re financing. APRs start at 18%, which is high for the best deal and higher than the Average credit card APR of 15.99%but it may be reasonable if you are applying for a home repair loan because of bad credit.

Read Bankrate’s expert OneMain Financial Review.


While NetCredit caters to those with bad credit, you might be stuck with a higher APR compared to other lenders. In New Jersey, for example, APRs start at 34.99%. The good news is that the lender does not charge fees and reports to major credit bureaus so you can build your credit.

Benefits: Loans start as low as $1,000, which is great if your home improvement project isn’t that expensive or you’re facing an emergency fix in that approximate price range.

What to pay attention to: Limited options – NetCredit is only available in 36 states. If you don’t live in a state where it’s offered, you might want to research alternatives. Beware that APRs reach 155%, more than four times the highest APR of competing lenders. For example, OneMain Financial caps its APR at 35.99%.

Read Bankrate’s expert NetCredit Review.


If you have bad credit, you may qualify for a loan through Before, a lender that caters to those with less than stellar credit. It offers a mobile app that can let you see your payment history and track upcoming payments.

Benefits: Generous loan amounts ranging from $2,000 to $35,000. Fast funding means you can expect to receive your loan repayment the next business day.

What to pay attention to: Set-up fees can reach 4.75%. Late fees and insufficient funds fees may also be charged. The APR starts at 9.95%, which is high compared to lenders who work with borrowers with better credit.

Read Bankrate’s expert opinion on Avant.

How to build your credit to get a renovation loan

Having bad credit could be a huge hurdle when it comes to qualifying for a home improvement loan. Although you may have lenders available to you, you’ll want to make sure you’re ready before you apply.

Before applying, check your credit report and credit score to find out what lenders will consider. If there are errors, dispute them and have them removed. This could increase your credit score and your chances of qualifying for home improvement loans with bad credit.

Start making at least the minimum payments on all your outstanding loans and credit cards on time each month. Creating and maintaining a positive payment history is one of the most important factors in establishing your credit score.

Try to reduce your use of credit. This means paying as much as you can on your credit cards each month and avoiding going over your limits. If possible, try to use them less. You may want to use silver more often if you tend to overspend.

Remember, there is no “quick way” to building your credit. It will take some time, so you can’t expect better rates right away. If your home improvement project can’t wait, you may have to settle for higher rates or more favorable terms.

Other Options for Getting a Home Improvement Loan With Bad Credit

While getting a personal loan to cover renovation costs may be a good idea for some, it is not the only option. You can research other ways to fund your home improvement project.

Home Equity Loan: A home equity loan is a type of second mortgage you can take out on your home to cover home-related expenses, such as home improvement projects. The rates are quite low and can vary between 3% and 12%. The amount you can borrow depends on the amount home equity you built. Your home is used as collateral, which means your credit score doesn’t matter as much compared to a personal loan. This makes it a great option for home repair loans for bad credit. The downside is that you could lose your home to the bank if you default on the secured home loan.

Home equity line of credit: A HELOC is like a home equity loan in that you can borrow money to finance home renovations using your home as collateral. But instead of giving you a lump sum, a HELOC acts as a revolving line of credit similar to how a credit card works. Since HELOCs come with variable rates, they cannot exceed the maximum legal limit for federal credit unions, which is currently 18%. A HELOC is good if you have continuous improvements and don’t know when you’ll need the money (or how much).

Loans for bad credit: Beware of home improvement loans without credit checks, as the companies offering them often charge exorbitant interest rates, sometimes over 400%. Extremely high interest rates could put you in more debt.

The bottom line

Although bad credit can make or break your chances of getting a home improvement loan, you still have a few options for borrowing money. Review each option available to you, including online lenders, banks, or credit unions near you.

Use a loan calculator to determine if you can afford the monthly payments before taking out the loan. Once you get your loan, it’s important to make payments on time each month to ensure your credit score doesn’t crash. Budget for your new loan and do your best to pay off any other outstanding debt to give your credit score a boost. Even with a new loan, you should strive to get your credit score in the best shape possible.


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