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Taylor Medine is a staff writer at Forbes Advisor who demystifies complex money topics to help everyday people make more informed financial decisions. Over her nearly a decade of experience, Taylor's work has been published on Bankrate, Experian, Credit Karma, MarketWatch, The Balance and more.
Taylor Medine is a staff writer at Forbes Advisor who demystifies complex money topics to help everyday people make more informed financial decisions. Over her nearly a decade of experience, Taylor's work has been published on Bankrate, Experian, Credit Karma, MarketWatch, The Balance and more.
Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top performer in the mortgage industry and his entrepreneurial success to simplify complex financial topics. Jordan aims to make mortgages and loans understandable.
Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top performer in the mortgage industry and his entrepreneurial success to simplify complex financial topics. Jordan aims to make mortgages and loans understandable.
Lead Editor, Mortgages & Loans
Reviewed
Updated: Apr 1, 2024, 12:58pm
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Home improvement loans are usually unsecured personal loans you can use to tackle projects like fixing up your spare bathroom or giving your guest room a facelift.
While bad credit can make it harder to get approved for this type of loan, you still have options. Some lenders work with borrowers who have less-than-perfect credit.
We reviewed and compiled the best home improvement loans for bad credit that you can consider for your next renovation or project.
Why you can trust Forbes Advisor: Our editors are committed to bringing you unbiased ratings and information. Our editorial content is not influenced by advertisers. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the loans methodology for the ratings below.
29 nationwide lenders researched
16 data points evaluated and scored
10+ years of combined personal finance experience
Best Bad Credit Home Improvement Loans
Best for Fast Funding
LendingPoint
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
LendingPoint is an online lender based in Atlanta that offers personal loans to prospective borrowers in 48 states and Washington D.C.; it does not offer loans in Nevada and West Virginia. Prospective borrowers in eligible states can apply online and benefit from quick funding.
LendingPoint personal loans range from $2,000 to $36,500; Georgia loans have a minimum loan amount of $3,500. Repayment terms range from 24 to 72 months—or two to six years.
There are two main disadvantages to LendingPoint: high maximum APRs and origination fees. While you can typically avoid high APRs by maintaining a high credit score, LendingPoint origination fees (up to 10%) depend on the state you live in.
Pros & Cons
Quick funding
Low credit score requirements
No prepayment penalty
Origination fee up to 10%
Co-signers or joint loans not permitted
Not available in Nevada and West Virginia
Details
Eligibility:
Minimum credit score: 600
Must live in a state other than Nevada or West Virginia
Doesn’t allow co-signers or co-applicants
Loan uses:
Debt consolidation
Home project
Medical expenses
Best for Scores as Low as 580
Upgrade
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Upgrade was launched in 2017 and provides accessible online and mobile credit and banking services. Since that time, the platform has made more than $3 billion in credit available to over 10 million applicants and continues to expand its online and mobile services. Although maximum APRs are on the high end compared to other online lenders, Upgrade makes loans available to those with poor credit history.
Loans amounts, which range from $1,000 to $50,000. Upgrade has two- to seven-year terms available. Upgrade charges an origination fee between 1.85% and 9.99% of the loan, and borrowers will encounter a $10 fee if their payment is more than 15 days late or if the payment does not go through; there are no discounts for autopay. That said, Upgrade borrowers are not subject to a prepayment penalty, so you can reduce the overall cost of the loan if you’re able to pay it off early.
Beyond offering accessible personal loans, Upgrade streamlines the lending process with a mobile app that lets borrowers view their balance, make payments and update personal information. Upgrade’s Credit Heath tool also makes it easy to track your credit score over the life of your loan.
Pros & Cons
Low minimum credit score requirement
Borrowers can use loans to cover business expenses
Offers direct lender payoff for debt consolidation loans
High APR range
Charges fees for origination, late payment and insufficient funds
Details
Eligibility:
Minimum credit score: 580
No minimum income requirement
Allows co-applicants
Loan uses:
Debt consolidation
Home projects
Large expenses
Business expenses
Best for Comparing Multiple Offers
Universal Credit
3.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Universal Credit is an online lending platform that offers personal loans between $1,000 to $50,000 through its partners. Repayment terms range from three to seven years.
While Universal Credit makes finding a personal loan accessible even to those with damaged credit, it comes with a few tradeoffs. First, it charges high APRs, well above the most competitive rates seen on our list. Second, Universal Credit charges a 5.25% to 9.99% origination fee on all personal loans. Because this is deducted from your loan proceeds, you’ll need to factor this in when determining your loan amount to ensure you receive the necessary amount after the fact.
Pros & Cons
Flexible qualification requirements
Next-day funding
No prepayment penalty
High APRs
All personal loans charge a 5.25% to 9.99% origination fee
Details
Eligibility:
Minimum credit score: 580
Minimum income requirement: Does not disclose
Doesn’t allow co-signers or co-borrowers
Loan uses:
Debt consolidation
Large expense
Home project
Best for Loans as Low as $1,000
Upstart
3.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Upstart has made a mark on the personal loan space because of its artificial intelligence- and machine learning-based approach to borrower qualification. In fact, Upstart estimates that it has been able to approve 27% more borrowers than possible under a traditional lending model. With competitive APRs, Upstart is not a top lender for borrowers who can qualify for more competitive rates. Even so, the platform’s minimum 300 credit score makes it an accessible option to those with fair credit.
Upstart also offers a pretty flexible range of loan options, with amounts ranging from $1,000 to $50,000 so you don’t have to borrow (or pay interest on) more than you really need. And, while Upstart’s loan cap is lower than some lenders—this is likely to be enough for many prospective borrowers.
Even though Upstarts three-, five-, seven-year loan terms are more restrictive than other lenders, it’s likely to be an acceptable tradeoff for applicants who might not be approved in a more traditional lending environment. Plus, it’s available in every state except West Virginia and Iowa, so it’s as widely available as many other top lenders.
Pros & Cons
Accessible to borrowers with fair credit
Offers prequalification with a soft credit check
Ability to choose a custom payment date
Charges an origination fee up to 8% of the loan amount
No secured or co-signer option
Loans only available for three-, five-, seven-year terms
Details
Eligibility:
Minimum credit score: 300
Minimum income requirement: $12,000
Doesn’t allow co-signers or co-borrowers
Loan uses:
Debt consolidation
Medical expenses
Educational expenses
Best for A Range of Repayment Options
Avant
3.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Minimum Credit Score
580
APR range
If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.
9.95% to 35.99%
Loan amounts
Example: A $5,900 loan with an administration fee of 4.75% and an amount financed of $5,619.75, repayable in 36 monthly installments, with an APR of 29.95% would have monthly payments of $250.30. If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.
If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.
9.95% to 35.99%
Example: A $5,900 loan with an administration fee of 4.75% and an amount financed of $5,619.75, repayable in 36 monthly installments, with an APR of 29.95% would have monthly payments of $250.30. If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.
$2,000 to $35,000
Editor’s Take
Founded in 2012 and based in Chicago, Avant is a consumer lending platform that offers secured and unsecured personal loans through a third-party bank (WebBank). Unsecured loans are available in Washington, D.C. and every state but Hawaii, Iowa, New York, Vermont, West Virginia and Maine. The platform specializes in middle-income borrowers with fair to good credit and only requires a minimum score of 580 to qualify.
Maximum loan amounts are low compared to other lenders, but the low minimum amount and flexible repayment terms (two to five years) make it an accessible option for borrowers. However, as with many loans for subprime borrowers, Avant personal loans come with a price. In addition to charging an administrative fee of up to 4.75% of the loan amount, Avant’s APR range (9.95% to 35.99%) is on the high end for applicants with a good to excellent credit score—and there is no autopay discount. Still, the platform earns top marks for borrowers with less than stellar credit who need quick access to funds.
Pros & Cons
Secured and unsecured loan options available
Low credit score requirement (580)
Loan terms available up to 60 months
Charges an upfront administrative fee
High starting APR for prime borrowers
Co-signers and co-applicants not allowed
Details
Eligibility:
Minimum credit score: 580
Minimum income: $20,000
Doesn’t allow co-signers or co-borrowers
Loan uses:
Debt consolidation
Large expenses
Home projects
Best for Online Experience
LendingClub
3.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
LendingClub is a peer-to-peer—or marketplace—lender founded in 2007. As the largest online lending platform for personal loans, LendingClub has worked with over 3 million customers and funded more than $55 billion in loans. It’s also one of the most geographically widespread options, with lending capabilities in every state except Iowa and the U.S. territories.
While LendingClub imposes high APRs and no autopay discount, applicants can choose to borrow between $1,000 to $40,000. This is a higher maximum loan cap than some other lenders. That said, LendingClub’s loan terms are limited to two to five years, which is less flexible than other lenders on our list. Borrowers also are charged an origination fee between 3% to 8% of the total loan amount, which is taken from the loan proceeds at funding.
LendingClub also makes debt consolidation easier by offering a balance transfer loan. With this type of loan, LendingClub offers direct payment to third-party lenders, including over 1,700 creditors. Not only does the platform take care of payments for you, you can choose exactly how much of your new loan amount you want LendingClub to pay toward each creditor.
Pros & Cons
Will directly pay off third-party creditors as part of balance transfer loan
Co-applicants permitted
Available to borrowers with fair to excellent credit
Origination and late fees
Limited loan term availability
High APR range
Details
Overview:LendingClub is a peer-to-peer—or marketplace—lender founded in 2007. As the largest online lending platform for personal loans, LendingClub has worked with over 3 million customers and funded more than $55 billion in loans. It’s also one of the most geographically widespread options, with lending capabilities in every state except Iowa and the U.S. territories.
LendingClub also makes debt consolidation easier by offering a balance transfer loan. With this type of loan, LendingClub offers direct payment to third-party lenders, including over 1,700 creditors. Not only does the platform take care of payments for you, you can choose exactly how much of your new loan amount you want LendingClub to pay toward each creditor.
We reviewed popular lenders based on 14 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose lenders that have a minimum credit score requirement of 600 or lower and ranked them based on the weighting assigned to each category:
Eligibility and accessibility: 30%
Loan cost: 25%
Loan details: 20%
Customer experience: 15%
Application process: 10%
Within each category, we also considered several characteristics, including loan amounts, repayment terms, APR ranges and applicable fees. We also looked at whether each lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like prequalification and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
Prequalify if you can. Many lenders now offer a prequalification form you can fill out to get a preliminary quote with loan interest rates and terms. Taking this step can help you scope out which loans you may be eligible for without hurting your credit score.
Compare APRs. A loan’s annual percentage rate (APR) is a percentage that expresses how much borrowing will cost you over time. APRs on personal loans typically range from 4% to 36%, with the lowest rates going to borrowers with stronger credit. Strategies like paying off existing debt could help improve your credit score before borrowing so you can qualify for a better interest rate.
Check for origination fees.Personal loans usually have upfront fees that are taken from your loan funds before you get the money, and it’s an extra cost to compare from one lender to the next.
Compare loan terms and monthly payments. Repayment terms usually range from one to seven years. Review your budget to see which loan term and repayment schedule best fits your needs.
What Is Considered Bad Credit?
What’s considered bad credit depends on the credit scoring model. A FICO score of 580 or below falls in the poor range, and a VantageScore of 600 or below is considered poor.
However, lenders can set their own eligibility requirements and there are several, like those in this list, that are willing to loan money to those with credit scores between 560 and 600. Besides your credit, factors like your income and debt-to-income (DTI) ratio can affect whether or not you qualify for a loan.
Ways to Improve Your Credit Score Before Borrowing
Your payment history has the most significant impact on your credit score, so making on-time payments on credit cards and loans is crucial.
Your credit utilization is another key factor that’s considered when calculating your score. Credit utilization is the percentage of available credit you’re using, and it’s best to use no more than 30% of your total limit—even lower is better. Paying down balances or increasing your card limits are ways to lower your credit utilization, which could strengthen your score and help you get approved for a home improvement loan.
Lastly, run through your credit reports from each credit bureau to check for incorrect records. If your credit report has inaccurate information that’s hurting your score, you can file a dispute on the Experian, Equifax and TransUnion websites to have it removed.
How to Get a Home Improvement Loan With Bad Credit
If you have bad credit, these tips could help you qualify for a home improvement loan:
Find a creditworthy co-borrower. A co-borrower is someone who applies with you and shares financial responsibility for your debt, which reduces risk for lenders. If a lender accepts co-borrowers, having one added to your application could help you get approved with a better interest rate.
Try credit union loans.Credit unions may offer loans to members with flexible eligibility criteria. If you’re already a credit union member or within a credit union’s field of membership, consider seeing what loans are available.
Look for lenders with flexible credit requirements. Certain alternative lenders may be willing to accept borrowers with a limited credit history or a poor credit score. Minimum credit requirements aren’t always listed on a lender’s website, but shopping around and prequalifying could help you find a loan that fits your needs.
Pay down debt before borrowing. Lowering your debt balances can reduce your credit utilization and lower your DTI ratio, which could give you a better shot at getting approved for a loan.
Bad Credit Home Improvement Loans vs. Home Equity Loans
Unlike unsecured home improvement loans, home equity loans are secured loans backed by the equity you have built up in your home. The collateral backing of this type of loan reduces risk for lenders, which is why secured loans tend to come with lower interest rates.
Lenders typically let you borrow up to 80% of your equity. However, what you can borrow depends on your income and credit. Some lenders may be willing to accept a credit score of 620 for a home equity loan, but a higher score can increase your chances of approval and improve your interest rate.
It’s important to note that your home could go into foreclosure if you can’t pay a home equity loan back. A home equity loan is not a good option if there’s any risk you can’t keep up with loan payments.
Other Options for Bad Credit Borrowers
Home improvement loans aren’t the only way to finance your next home project. Here are other options you could consider:
Assistance Programs
Homeowners with a low income may be able to qualify for financial assistance to pay for home improvement costs through community programs. The HOME Investment Partnerships Program, for example, is a homeowner rehabilitation initiative that helps owners make repairs and renovations. Rehabilitation assistance may include grants and affordable loans available to borrowers who have trouble qualifying for loans through private lenders.
Title I Property Improvement Loan
Title I Property Improvement Loans are loans backed by the government and help low- and moderate-income borrowers make upgrades that improve the “liveability and utility” of a home. This program lets you borrow up to $7,500 through an unsecured loan or up to $25,000 if your home secures the loan.
While lenders will check your credit history for approval, there are no minimum credit requirements, so you may be able to qualify with less-than-perfect credit.
Family Loans
If you know someone in a financial position to lend money, the last resort could be asking for a loan to make repairs and upgrades to your home. However, family loans may have tax implications for the person lending if you borrow over $10,000.
Before going this route, be sure to get the terms, repayment schedule and interest rate in writing so both you and the person lending you money are on the same page about how the loan will be repaid.
Frequently Asked Questions (FAQs)
What credit score is needed to get a home improvement loan?
Credit score requirements can vary by lender, but a score of 600 or above is often required to get an unsecured loan. In some cases, lenders may accept a credit score as low as 560.
What can you use a home improvement loan for?
You can use a home improvement loan for pretty much any expense you want, like for covering the cost of a bathroom remodel, a home upgrade, new furniture, and more.
How much can you borrow in a home improvement loan?
Loan limits vary by lender, but you may be able to borrow up to $35,000 or $50,000 for home renovations. Factors like your credit and income can impact the loan amounts you’re offered.
Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.
Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.
Taylor Medine is a staff writer at Forbes Advisor who demystifies complex money topics to help everyday people make more informed financial decisions. Over her nearly a decade of experience, Taylor's work has been published on Bankrate, Experian, Credit Karma, MarketWatch, The Balance and more.
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