Best Home Improvement Loans With Bad Credit

The main problem with having bad credit is that it tells lenders that you’re a risky borrower. They worry that you won’t pay the loan back in full. Being so, they often refuse to lend to you, limit the amount you can borrow, or charge you high rates to cover their risk. Luckily, there are a few online lenders that cater to people in your exact situation.

Our financial experts reviewed and ranked more than 30 online lenders and found these five to be the best if you’re looking for home improvement loans with bad credit.

Our team of financial experts reviewed and analyzed more than 30 personal loans in search of the best home improvement loans for people with bad credit. All of these lenders cater to people with poor credit and won’t automatically deny you for having a bad score. Plus, they offer decent-sized loans with multi-year terms and reasonable APRs.

We used a ratings methodology for personal loans to rank the best loans on the market. This ratings methodology evaluates lenders based on loan length, APR, repayment terms, user experience, customer service, credit score history, banking and credit union use, and additional features.

Best Home Improvement Loans With Bad Credit in 2024 - Full Overview

How to Choose Home Improvement Loans with Bad Credit

Before we get to the top five, when you’re looking for a home improvement loan with bad credit, there are a few key factors to consider. For example, one of the most important is that you need to find a lender that has lenient credit score requirements. If a lender requires a 700 credit score, and you apply with 550, you’re not going to get very far. But that’s just one part of the equation. Here’s a look at several of the main factors to keep in mind:

• Loan features: The loan needs to be a good fit for your home improvement project which means it’ll need to be the right loan amount and the lender must allow you to use the funds for home improvements. It’s also important that the lender offers loan terms long enough to make the monthly payments affordable.
• Interest rates and fees: All loans come with costs and if they are too high, they can make the loan unaffordable. You’ll see that each lender offers a unique APR range and usually a fee range as well. This information is helpful but to find out the rate and fee you’ll pay, you need to apply and get a quote based on your situation.
• Application process: You should also look into a lender’s application process to see if it’s one you’re willing and able to go through. Find out what will be required and what you’ll have to provide. Is it entirely online? Will you need to send over files? How long will it take? The quicker and easier it is, the better. Also, many lenders offer an initial quote without hurting your credit score. This offers an advantage for you because you can get loan offer details from various lenders without worrying about damaging your credit.
• Qualification process: The qualification process is going to be key, especially when you have bad credit. Not all lenders will approve you so you need to find the ones that specialize in lending to people with less-than-perfect credit. Figure out your credit score and income and then, before applying, check the requirements of lenders to ensure they are a match. Also, be sure to take note of any other qualification requirements like living in certain states, a certain debt-to-income ratio, etc.
• Customer service: Like any company you do business with, a lender should be there to help you if you run into any problems with their product. To do so, they need to have a solid customer service department in place. To avoid getting stuck with a loan issue, look into a lender’s customer service before taking a loan from them. Find out if they have live representatives, live chat, an email support line, and a fast response rate. That support can become very important if something goes wrong like you make a payment to the wrong account or need a payment arrangement.
• Online user reviews: Lenders can tell you how great they are all day but you’ll hear the truth from other borrowers like you. Being so, check online review sources like Trustpilot to hear how the whole experience went for others.
• Perks and bonuses: Lastly, look for any unique offerings that set a lender apart from the rest. It may be a user-friendly app that lets you manage the loan from your phone, track your payoff progress, and monitor your credit score. On the other hand, it could be a helpful deferral program that lets you delay payment without penalty if times get tough.

Main Features of The Best Home Improvement Loans for Bad Credit

Here’s a look at how our top home improvement loans for poor credit stack up against each other.

How to Choose Home Improvement Loans with Bad Credit

Before we get to the top five, when you’re looking for a home improvement loan with bad credit, there are a few key factors to consider. For example, one of the most important is that you need to find a lender that has lenient credit score requirements. If a lender requires a 700 credit score, and you apply with 550, you’re not going to get very far. But that’s just one part of the equation. Here’s a look at several of the main factors to keep in mind:

• Loan features: The loan needs to be a good fit for your home improvement project which means it’ll need to be the right loan amount and the lender must allow you to use the funds for home improvements. It’s also important that the lender offers loan terms long enough to make the monthly payments affordable.
• Interest rates and fees: All loans come with costs and if they are too high, they can make the loan unaffordable. You’ll see that each lender offers a unique APR range and usually a fee range as well. This information is helpful but to find out the rate and fee you’ll pay, you need to apply and get a quote based on your situation.
• Application process: You should also look into a lender’s application process to see if it’s one you’re willing and able to go through. Find out what will be required and what you’ll have to provide. Is it entirely online? Will you need to send over files? How long will it take? The quicker and easier it is, the better. Also, many lenders offer an initial quote without hurting your credit score. This offers an advantage for you because you can get loan offer details from various lenders without worrying about damaging your credit.
• Qualification process: The qualification process is going to be key, especially when you have bad credit. Not all lenders will approve you so you need to find the ones that specialize in lending to people with less-than-perfect credit. Figure out your credit score and income and then, before applying, check the requirements of lenders to ensure they are a match. Also, be sure to take note of any other qualification requirements like living in certain states, a certain debt-to-income ratio, etc.
• Customer service: Like any company you do business with, a lender should be there to help you if you run into any problems with their product. To do so, they need to have a solid customer service department in place. To avoid getting stuck with a loan issue, look into a lender’s customer service before taking a loan from them. Find out if they have live representatives, live chat, an email support line, and a fast response rate. That support can become very important if something goes wrong like you make a payment to the wrong account or need a payment arrangement.
• Online user reviews: Lenders can tell you how great they are all day but you’ll hear the truth from other borrowers like you. Being so, check online review sources like Trustpilot to hear how the whole experience went for others.
• Perks and bonuses: Lastly, look for any unique offerings that set a lender apart from the rest. It may be a user-friendly app that lets you manage the loan from your phone, track your payoff progress, and monitor your credit score. On the other hand, it could be a helpful deferral program that lets you delay payment without penalty if times get tough.

Main Features of The Best Home Improvement Loans for Bad Credit

Here’s a look at how our top home improvement loans for poor credit stack up against each other.

How Does a Home Improvement Loan for Bad Credit Work?

Bad credit home improvement loans are often structured as term loans. You get a lump sum upfront and repay it over a set amount of months, plus interest. The APR you get tells you how much you will pay per year for the loan and includes fees you’re charged for the loan’s origination or administration. While longer loan terms can lower your monthly payment amounts, be careful because they result in you paying more interest over time. Once you make all your payments, the loan will be marked as paid in full and closed.

Common Uses of Home Improvement Loans

The most common home improvement projects that people planned in 2021, according to the 2021 Axiom Homefront Insights Survey, included improving:

• Yards or landscaping (35%)
• Bathrooms (31%)
• Kitchens (27%)
• Bedrooms (26%)
• Decks or patios (25%)
• Offices (16%)

Whether adding a new area, renovating one you have, or making repairs, you’ll often face sizeable costs. Home repair loans for bad credit can help to split up the costs over time so they’re more manageable.

How To Get a Home Improvement Loan with Bad Credit

Getting a home improvement loan with bad credit has never been easier. With the wide range of online lenders available, and a number specializing in lending to people with bad credit, you’ve got options. Here are the steps to follow:

• Shortlist compatible lenders: First, you need to find at least three lenders that can meet your needs in terms of the loan amount, term, APR, and eligibility requirements. We’ve done the hard work for you above.
• Get quotes: ​​Head over to the websites of the lenders and provide the necessary information to get quotes. This step shouldn’t hurt your credit score.
• Find the best deal: Review the offers you receive and compare the loan amounts, APRs, terms, monthly payment amounts, overall costs, customer service reviews, and other perks. Find the one that provides the best overall value.
• Accept the loan offer: Contact the winning lender to accept the loan. At this point, a hard credit inquiry will be performed and you’ll go through the final verification to get the loan.
• Get the funds: Once approved, the money will be sent to your bank account and you can start your home improvement project!

With the streamlined online application and approval processes that many lenders offer today, you can often have the funding you need within a few days.

How To Improve Your Credit to Get a Home Improvement Loan?

If you don’t get approved for a home improvement loan because of your credit, or don’t like the rates and terms you get offered, it’s time to work on getting your score up. To do that, you first need to fix any outstanding problems with your report. For example, if you have delinquent debt, work on settling it with the creditor. Also, ensure all the information on your reports is correct so there aren’t any mistakes working against you.

From there, you need positive credit lines. If you already have a credit line open, be sure you’re paying each payment by the due date. If you don’t, you can start by opening a secured credit card. You’ll have to pay upfront to get a credit line but then your payments will be reported to the credit bureaus. To get the most out of it, use the card and then pay off the balance in full and on time every month.

Overall, keep your credit utilization down, limit the credit inquiries you allow, keep accounts open, and pay them all on time. As you continue to do this, you’ll build positive credit lines, negative marks will fall off your reports, and your score will increase.

Other Types of Home Improvement Financing for Bad-Credit Borrowers

Not sure if a personal loan is the best choice? Financing home improvements with bad credit can be done in a few other ways, too. Here are some alternatives:

• Home equity loans/credit lines: If you’ve been working on paying down your mortgage for a bit, or have seen your home’s value increase, you likely have some equity. If you have enough, you can borrow against it at competitive rates that are often lower than those that come with unsecured personal loans. Lenders offer both loans and credit lines secured by your home’s equity. While the application process can be a bit more involved, and you’ll need to put your home at risk, this route can be advantageous in some situations.
• Friends and family won’t check your credit but will base their decision on your relationship. It’s important to think about how the loan could impact that relationship if you end up unable to repay it as planned.
• Credit cards can be a good option if you have them but can be hard to get with bad credit. If you can get approved, the APRs are often high and credit lines are low so this may not be the best route until your credit improves.
• Car title loans often don’t require a credit check but instead rely on securing the loan with a vehicle you own free and clear. Going this route, the costs are often high and if you default, you’ll lose your car. However, it can be a quick way to get a lump sum of money.

When compared to the alternatives, unsecured personal loans often come out ahead for their convenience, low risk, and affordability. However, it never hurts to compare multiple options to see what’s best for your situation.

Bring Your Home Improvement Plans to Life

Bad credit doesn’t have to delay all your plans. Plenty of people are getting home improvement loans with bad credit. If you are ready to get started on a home improvement project, it’s worth checking to see what kind of funding you can get.

However, before taking a loan, make sure to shop around with at least three lenders. Many exist to help people in your exact situation but their loan amounts, rates, and terms can vary. Getting multiple quotes doesn’t cost you anything and can help you get a better deal!