Key takeaways

  • You can still get approved for a home improvement loan with a bad credit score, but it’s likely that you’ll be given a high interest rate.
  • Borrowers with good credit are more likely to be offered larger loan maximums.
  • If possible, it’s best to build up your credit score before applying for a home improvement loan.

For most, a larger home improvement project, like a kitchen remodel or a total roof repair, is a hefty expense that necessitates financing. However, those with less-than-stellar credit may have a harder time getting approved for a home improvement loan.

Thankfully, there are lenders who cater specifically to those with bad credit and offer home improvement loans to consumers across the credit spectrum. These loans can help you get the funding you need to complete your project, although it’s common for these lenders to charge higher-than-average rates.

Best home improvement loans with bad credit

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

Lender Max loan amount Minimum credit score
OneMain Financial $20,000 None
NetCredit $10,000 None
Avant $35,000 580

OneMain Financial

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

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

What to watch out for: Loans are capped at $20,000, although some states differ in loan maximums. If you’re planning a hefty improvement or renovation, the maximum amount may not be enough to cover what you need depending on the home repair project you’re funding. APRs start at 18.00 percent, which is high for the minimum rate and falls above the average credit card APR of 20.11 percent. However, rates this high are in the average ball-park for those with thin credit.


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. The good news is the lender doesn’t charge fees (in some states) and reports to the major credit bureaus so you can build your credit.

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 36 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 its APR at 35.99 percent.


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

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 is up 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.

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

Having bad credit could be a hurdle when it comes to qualifying for a home improvement loan. While there are lenders who work with borrowers across the spectrum of credit scores, you’ll want to be fully prepared for the application and make sure you know everything about the loan – from the repayment options to the minimum and maximum APRs.

Before applying, check your credit report and credit score to make sure you’re meeting the minimum requirements, plus it’s good practice to regularly check your credit report for errors.

Improving your chances of approval starts with building credit. Making at least the minimum payments on all your outstanding loans and credit cards on time is key to creating and maintaining a positive repayment history.

Try to lower your credit use and avoid maxing out your limits. Paying down as much of your monthly balance on time each month as you can and reducing your card usage is the easiest way to improve your credit score. However, it’s imperative that you don’t close the account as that will have an adverse effect on your credit.

Keep in mind that there’s no magic fix when it comes to ” building your credit. It will take some time so if your home improvement project can’t wait, you may  be able to score higher rates or more favorable terms with a better score.

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. For those who don’t meet the minimum requirements, there are alternative funding methods available to those with less-than-stellar credit.

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 and improvement projects. The interest rates are fairly low when compared to personal loans, ranging anywhere from 3 percent to 12 percent.

However, the amount you can borrow depends on how much home equity you have built. Your home is used as collateral, which means the lender assumes less risk – if you default on the loan, you run the risk of losing your home – so credit scores don’t play as large of a factor in approval odds. For those who can comfortably make the payments, this could be a great way to build credit and finance a home repair or project.

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 disbursing the funds in a lump sum, a HELOC acts as a revolving credit line, similar to how a credit card works. Since HELOCs come with variable rates, they can’t exceed the maximum legal limit for federal credit unions, which is currently 18 percent. A HELOC is good if you have ongoing improvements and aren’t sure when you’ll need the money (or how much).

Bad credit loans: Beware of no-credit-check home improvement loans, as companies that offer them often charge exorbitant interest rates sometimes more than 400 percent. Lenders that charge rates this high are often considered predatory, leaving borrowers in a cycle of high-interest debt that’s difficult (or even impossible) to recover from.

The bottom line

While bad credit can make it more difficult to get approved for a home improvement loan, you still have plenty of financing options. Before signing on the dotted line, remember to compare all of your options and offers to ensure you’re getting the most competitive rate for your credit situation.

Before applying it’s also wise to use a loan calculator to determine if you can afford the monthly payments, both now and in the long-term. Making the monthly loan payments on time and in full, not maxing out your credit cards and not over-borrowing are sure-fire ways to protect your credit while improving or renovating your home.