Home Improvement

Best home improvement loans with bad credit


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Paying a mortgage might already be straining your budget. Adding extra costs for home improvements could be a total budget buster. Fortunately, there are home improvement loans you can use to help finance those upgrades.

But not everyone has a solid credit score to secure a home improvement loan. Bad credit can be a major factor in a lender approving or denying you for a loan.

While there are plenty of lenders that offer loans to people with bad credit, make sure you check them out before you sign up to ensure you borrow funds on good terms. Here are the best home improvement loans for bad credit.

Best home improvement loans with bad credit

Max loan amount
Minimum credit score
OneMain Financial

OneMain Financial

OneMain Financial caters to borrowers with bad and fair credit. If you’re having trouble finding a home improvement loan based on your subpar credit, OneMain Financial might be the right fit.

Perks: You can take advantage of joint applications, which means if you don’t think you’ll qualify on your own or want to better your chances of getting approved, you can add another person to your application.

What to watch out for: Loans are capped at $20,000, which might not be enough, depending on the home repair project you’re funding. APRs start at 18 percent, which is high for the best offer and above the average credit card APR of 17.35 percent, but it might be reasonable if you’re applying with 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 percent.

Perks: Loans start as low as $1,000, which is good if your home improvement project doesn’t cost that much or you’re faced with an emergency fix in that ballpark price range .

What to watch out for: Limited options — NetCredit is only available in 15 states. If you don’t live in a state where it’s offered, you may want to look into alternatives. Beware that APRs go as high as 155 percent, which is more than four times the highest APR for competing lenders. For example, OneMain Financial caps their APR at 35.99 percent.

Read Bankrate’s expert NetCredit Review.


If you have bad credit, you may qualify for a loan through Avant — a lender that caters to those with less-than-stellar credit.

Perks: Generous loan amounts ranging from $2,000 to $35,000. Fast funding means you can expect your loan payment as soon as the next business day.

What to watch out for: The origination fee ranges from 0.95 percent to 4.75 percent. Late fees and insufficient funds fees can also be charged. The APR starts at 9.95 percent, which is high compared to lenders who work with borrowers with better credit.

Read Bankrate’s expert Avant Review.

The best home improvement loans for bad credit recap

  • OneMain Financial
  • NetCredit
  • Avant

How to build up your credit to get a home improvement loan

Having bad credit could be a huge hurdle to overcome when it comes to qualifying for a home improvement loan. While you may have some lenders that are available to you, you’ll want to make sure you’re prepared before applying.

Before applying, check your credit report and credit score to know what lenders will be looking at. If there are any errors, dispute them and have them removed. This might increase your credit score and your chances of qualifying for a home improvement loan.

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

Try to lower your credit use. That means pay as much as you can on your credit cards every month and avoid maxing out your credit cards when you use them. If possible, try to use them less.

Other options for getting a home improvement loan with bad credit

While getting a personal loan to cover home improvement costs might be a good idea for some, it’s not the only option. You can look into alternative ways of funding 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, like home improvement projects. Your home is used as collateral, which means your credit score doesn’t matter as much compared to a personal loan. The downside is you could lose your home to the bank if you default on the home-backed loan

Home equity line of credit: A HELOC is like a home equity loan in that you can borrow money to finance home improvements using your home as collateral. But instead of receiving a lump sum, it’s a revolving credit line similar to how a credit card works. This is good if you have ongoing improvements and aren’t sure when you’ll need the money (or how much).

Personal loans from banks and credit unions: If you have an established relationship with a bank or credit union, visit a branch to talk to a representative about your options. Many credit unions will work with those with bad credit, but if you’re not a member, you might be required to join before taking out a loan.

The bottom line

While bad credit can make or break your chances of getting a home improvement loan, you still have some options to borrow extra cash. Review each option you have, whether it’s an online lender or a bank or credit union near you.

Check your credit scores and credit reports to review what lenders you will see when you apply. Fix any errors and work on boosting your credit as much as you can before applying. See if you can get prequalified without applying for a loan first. Try to find a lender that offers you the lowest APR and fewest fees, if possible.

After you’ve gotten your home repair loan for bad credit, it’s important to make regular on-time payments every month to make sure your credit score doesn’t tank. 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 work on getting your credit score in the best shape possible.