Best Bad Credit Home Improvement Loans Of 2024

Staff Writer

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.

Best Bad Credit Home Improvement Loans

Best for Fast Funding

LendingPoint

APR range

7.99% to 35.99%

with autopay

7.99% to 35.99%

with autopay

Editor’s Take

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
  • Minimum annual income. $35,000
  • Co-signers. Not permitted

LendingPoint can be a good option for those who may not have a high credit score. They focus more on the potential borrower’s job history and income when determining loan eligibility and rates.

— Jonathan Feniak, general counsel and head of finance, LLC Attorney

Best for Scores as Low as 580

Upgrade

Editor’s Take

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 years 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

  • Flexible eligibility requirements
  • Can pay off creditors directly
  • High loan amounts available
  • High APR range
  • Fees for late payments and insufficient funds
  • Charges origination fees from 1.85% and 9.99%

Details

Eligibility: 

  • Minimum credit score. 580
  • Minimum income. None
  • Co-applicants. Permitted

Upgrade’s personal loans come with a unique feature—mandatory automatic payments. While this is an effective default prevention measure, it might not suit everyone, especially those with irregular income streams.

— Jonathan Feniak, general counsel and head of finance, LLC Attorney

Best for Comparing Multiple Offers

Universal Credit

Editor’s Take

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
  • Co-signers. Does not disclose
  • Co-borrowers. Does not disclose

Best for Loans as Low as $1,000

Upstart

Editor’s Take

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 or five years 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 no credit history
  • Prequalification with a soft credit check
  • Ability to choose a custom payment date
  • Charges an origination fee up to 12% of the loan amount
  • No co-signer option
  • Only offers three or five years terms

Details

Eligibility: 

  • Minimum credit score. 300
  • Minimum income. No minimum but must have a source of income
  • Co-signers. Not permitted
  • Co-borrowers. Not permitted

Upstart has no minimum credit score to apply for a loan, which makes them a popular choice for borrowers of all categories. Those with lower credit scores or uneven credit history may receive offers with [high APRs]. Loan amounts range from $1,000 to $50,000 and loan term lengths available are three or five years.

Upstart offers flexibility with payment dates and funding can be as soon as one business day. However, some requirements are employment, steady income, a personal bank account, email address and a Social Security number. Some fees may apply, including an origination fee, late fees or statement fees.

— Stephen Kates, CFP®, Annuity.org

Best for A Range of Repayment Options

Avant

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

Editor’s Take

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

  • Available to borrowers with fair to excellent credit
  • Balance transfer loans can directly pay off third-party creditors
  • Co-applicants permitted
  • Origination and late fees
  • High APR cap

Details

Eligibility:

  • Minimum credit score. 600
  • Minimum income. Does not disclose
  • Co-signers. Not permitted
  • Co-borrowers. Permitted

Summary: Best Bad Credit Home Improvement Loans

Methodology

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.

To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.

Tips to Compare Bad Credit Home Improvement Loans

When shopping around for a home improvement loan, here’s how to compare options:

  • 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.

Next Up In Personal Loans

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.

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