Home repair loans with bad credit

Home Repair Loans With Bad Credit

If you are a homeowner, you will likely have some home repair projects or home improvement goals on your mind. And depending on the type of work needed, paying out of pocket may not be possible. The average homeowner spends $15,000 per renovation project!1

This is where home repair loans, also sometimes called home renovation loans, come in. Home repair loans make it possible to finance a large home project. A reno loan can come from several different places. However, getting one of these installment loans can be challenging if you have bad credit. 

The good news is that there are several loan options out there that can help you get funding for home repairs, even if you have bad credit. 

What Are the Effects of Bad Credit?

Bad credit can directly affect the type of loan offers you get. But how? Learn about the 5 credit score ratings and how they impact your eligibility for the best home improvement loans.   

Credit Score RatingScore RangeDescriptionImpact on Loans
Excellent750-850You have a long history of responsible credit use and timely payments.Easiest to get approved for loans with the most favorable terms, including low-interest rates.
Good700-749You generally make payments on time but may have some debt.Likely to get approved for most loans, but interest rates may be slightly higher than those with excellent credit.
Fair650-699You have some late payments or high credit utilization.You can still get approved for loans, but expect higher interest rates and less favorable terms.
Poor580-649You have multiple late payments, high credit utilization, or even a bankruptcy.Difficult to get approved for unsecured loans; may need to opt for secured loans like home equity loans.
BadBelow 580You have serious delinquencies, like defaults or bankruptcies.Very difficult to get approved for most loans; may need a co-signer or have to settle for very high-interest rates.

Most Common Home Repairs and Their Costs

If you are a new homeowner or haven’t had any home repairs done, you may be unsure about the average cost of things. Here are some common home repairs and some home improvements people make, along with their average prices: 

Common Home Repairs: 

Roof Repairs

Roof repairs don’t need to be done for many years after a new roof installation—one reason why secondary owners often end up having to pay for the repairs. In addition to time, things like weather damage can be another cause for a roof repair. Depending on the size of your home and the material you use, roof work can cost anywhere between a few hundred dollars for repairs and $10,000 for a whole roof replacement. 

Window Replacements or Repairs 

Windows are an important part of keeping your home energy efficient. A broken window can also be a safety hazard. The average window repair cost ranges between $300 to $850. A replacement can be up to around $1,500. 

Water Heater Repairs

A water heater heats the water in your home, and you may not even think about this appliance until it is broken. In general, water heaters can last between five to 10 years. If your water heater needs repair, you can expect around $500 for a repair and up to $1,300 to replace it. 

Home Foundation 

Foundation repairs can be an emergency and, unfortunately, can be one of the most expensive repairs on a home. The average cost for foundation repair is $5,000, but that number can increase if your home is large.

Siding/Exterior Maintenance 

Just like a roof, the exterior wall of your home can be severely damaged due to weather. Depending on what material your home’s exterior is constructed from, repairs can cost a few hundred dollars up to a few thousand dollars. 

Plumbing and Pipes

Plumbing and pipe issues are another one that can arise, especially in older homes. The average visit from a plumber can cost anywhere from $45 to $300. 

Some Common Home Improvements:

Adding a Pool

A pool can be a great way to add value to a home and an enjoyable experience for homeowners. Adding a pool to a home is pretty common, and it’s possible to get a pool loan with bad credit. Pool costs will start around $3,000, and they go up significantly from here depending on things like materials and additions. 

New Flooring and Paint

Flooring and paint are relatively easy ways to change the look of a home and are common endeavors that many new homeowners take on on their own. These factors will ultimately determine the flooring price, but expect to pay a few thousand dollars:

  • Your flooring choice
  • The size of your home
  • The installation costs

For paint, the coverage, type of paint, and whether you are hiring someone else will determine costs. Paint can cost a few hundred dollars up to a few thousand. 

Upgrading Bathrooms

Bathrooms are an important part of every home, and many people like to modernize them for value and aesthetics. Bathroom repairs can cost anywhere from a few hundred to a few thousand.

Upgrading a Kitchen

For many people, a kitchen is the center of the home. Total kitchen renovations, including appliances, can cost between $15,000 to $30,000. 

Loan Options for Home Repairs With a Bad Credit Score

Now that you know about some of the average costs for average home repairs, you can be better equipped when looking for a bad credit loan. Here are some options you can consider with low credit: 

Home Equity Loans

Home equity loans are some of the most popular loan options for home repairs. Home equity loans use the value of a home to secure funding. Because a home is involved as an asset, you may still find a guaranteed home equity loan with bad credit. Often, a home equity loan will fall under the umbrella of home improvement loans. 

The loan amount will depend on:

  • Your home’s market value
  • The amount of equity in your home 
  • Your income
  • Your credit score

A Home Equity Line of Credit or HELOC

A home equity line of credit (HELOC) works similarly to a home equity loan in that you borrow from your home’s equity. Also, like home equity loans, there won’t be a focus on a minimum credit score requirement since a HELOC is a secured loan. Instead of focusing on your current FICO score, lenders will pay attention to your income and ability to pay the loan. 

You may wonder what does a line of credit mean? A line of credit means you can borrow multiple times until you hit your credit limit rather than getting a lump sum loan amount. A HELOC will work well if you are unsure how much you need to spend or if your expenses are split up over time. While a home equity loan will work better for you if you need a large payment upfront. 

Bad Credit Personal Loans

A personal loan is one of the most versatile loan options available. You can get a personal loan at a bank, credit union, or by working with an online lender. The loan amounts, interest rates, and repayment terms vary depending on the lender you work with. 

Although a standard personal loan will be challenging with poor credit, bad credit loans are available. You can also look into secured loans for an easier time of approval than unsecured personal loans. 

Like a home equity loan, a personal loan is also often categorized as a home improvement loan or may be called a personal home improvement loan. With these loans, you’ll likely repay your loan in fixed monthly payments. 

Consider Adding a Co-Signer or Co-Borrower for Easier Approval With Bad Credit

With bad credit, it can be tough to get approval in general, and even with approval, a single loan may not be enough funds to cover the cost of your expenses. The good news is that adding a co-signer or co-borrower to your loan can help increase your chances of approval and a higher loan amount. 

A co-signer can be added to your loan as security for the lender. If you don’t pay back the loan, the co-signer will need to. While a co-borrower will be equally responsible for repayment from the get-go. If you own a home with another person, it will make sense to add them as a co-borrower. Keep in mind that your co-signer and co-borrower will need good credit and income to be helpful. 

Loans From the Federal Housing Administration (FHA)

If you don’t have a ton of equity in your home, you can look into an FHA Title I loan. With an FHA Title I Loan, the government will provide security to your lender. And so, for loans under $7,500, you won’t need a cosigner, and the loan can be an unsecured loan even with bad credit. These loans can cover all kinds of home improvement projects and additions, including appliances and exterior or interior projects. 

Contacting Your Home Insurance Company

If you have home insurance coverage, your insurance may partially or fully cover some home repairs. And so before spending any of your own money, be sure to contact your insurance company, especially after something like weather damage. 

In-House Financing Options for Home Repairs

You may be able to get in-house financing from a contractor. This can be helpful in cases of a bad credit score because often, your credit will not be looked at. You will have to repay your contractor in monthly installments until the amount is due is paid in full. You will likely not have to pay any interest on this financing. However, the credit process and interest will be involved if your contractor uses third-party financing. 

Loan Options to Avoid for Home Improvement 

When looking for home improvement loans, you’ll find a good amount of low credit score options, including the ones from above. However, there are some options you should avoid. The main reason is that they can lead to a cycle of debt, look bad on your credit reports from all three major credit bureaus, and can hurt your credit scores and credit history. 

Here are some loans that you may come across that should be avoided: 

Payday Loans

Payday loans are extremely short-term bad credit loan options. They make a few hundred dollars available that must be paid back in just a few weeks. One major downside of payday loans is that they come with extremely high interest rates. These rates, coupled with a short loan term, make it really easy to miss payments or default. These actions will show up on your credit report and hurt your score. 

Car Title Loans

Car title loans are secured loans that use a borrower’s vehicle as collateral. Instead of focusing on credit, lenders will pay attention to the borrower’s income and ability to repay a loan. The major downside of these loans is their high interest rates and fees. You also risk losing your vehicle if you cannot repay the loan.

No Credit Check Loans

While you are exploring your loan options, you will find loan options labeled as no credit check loans. Although no credit check loans may sound convenient if you have bad credit, they are not a good choice for home improvements. The loan amounts are typically small, and interest rates are usually always high.  

Frequently Asked Questions About Bad Credit Home Improvement Loans 

What is the minimum credit score needed for a home improvement loan?

The minimum credit score required for a home improvement loan can vary significantly depending on the lender and the type of loan you’re considering. Traditional lenders often look for a credit score of at least 620. However, there are specialized home improvement loans for bad credit that may accept scores as low as 580. It’s essential to shop around and inquire about minimum credit score requirements to find a loan that fits your financial situation.

How do I check my credit history before applying?

You’re entitled to one free credit report from each of the three major credit bureaus—Equifax, Experian, and TransUnion—every 12 months through Reviewing your credit history will not only give you an idea of your credit score but also allow you to correct any errors that might be affecting your credit negatively. This step is crucial before applying for any loan, including a home improvement loan.

Can I use a home equity loan for home improvements if I have bad credit?

Yes, a home equity loan can be an excellent option for those with bad credit who are looking to make home improvements. Because these loans are secured against the value of your home, lenders may be more flexible with credit score requirements. However, it’s essential to understand that if you default on a home equity loan, you risk losing your home, so proceed with caution.

What’s the difference between a home equity loan and a cash-out refinance?

Both a home equity loan and a cash-out refinance allow you to tap into the equity you’ve built up in your home. A home equity loan is a second loan that you take out in addition to your existing mortgage. In contrast, a cash-out refinance replaces your current mortgage with a new, larger one, and you get the difference in cash. Cash-out refinances often have lower interest rates but come with the hassle of refinancing your entire mortgage.

Are unsecured personal loans a good option for home improvement?

Unsecured personal loans can be a suitable option for home improvements, especially if you don’t want to use your home as collateral. However, these loans often come with higher interest rates compared to secured loans like home equity loans. If you have a low credit score, the interest rates can be even higher, making the loan more expensive in the long run.

How long does it take to get approved for a home improvement loan?

The approval process for a home improvement loan can vary widely depending on the lender and your financial situation. Online lenders may offer approval within a few hours, while traditional banks might take a few days. Home equity loans often require an appraisal of your property, which can extend the approval time to a few weeks.

Can I get a home improvement loan if I recently filed for bankruptcy?

Obtaining a home improvement loan after filing for bankruptcy is challenging but not impossible. You’ll likely face higher interest rates and may need to look into specialized lenders who offer home improvement loans for bad credit. Some lenders may also require a cosigner with a better credit history to approve your loan.

What happens if I miss a payment on my home improvement loan?

Missing a payment on your home improvement loan can have several consequences. Your credit score will likely take a hit, and you may incur late fees. If you have a home equity loan, consistent failure to make payments could even risk foreclosure on your home. It’s crucial to contact your lender as soon as possible if you think you’ll miss a payment to discuss your options.

Can I pay off my home improvement loan early?

Most lenders allow for early repayment of your loan. However, some may charge a prepayment penalty for paying off the loan before the term ends. Make sure to read the fine print and consult your lender about any penalties or fees associated with early repayment.

How can I improve my chances of getting approved?

Improving your credit score, even by a few points, can significantly enhance your chances of loan approval. You can do this by paying off existing debts, correcting errors on your credit report, and making timely payments. Additionally, consider adding a cosigner with a strong credit history to your loan application, as this can provide extra assurance to the lender.

In Summary: Home Improvement Loans With Bad Credit by CreditNinja 

Many people suffer from bad credit. In fact, 1 out of 5 borrowers have a bad credit score.5 But rest easy knowing that it’s possible to borrow money with less than perfect credit!

There are a lot of loan options available to improve or repair your home. Many people use home improvement loans, but these secured loans are risky. If you experience financial issues during the repayment process, the lender could start the repossession process! 

Consider applying for a CreditNinja personal loan! Our online loans have competitive rates, flexible repayment plans, and other exclusive benefits! Inquire today to see how much you may qualify to get with an unsecured personal loan.  


  1. Home Renovation Costs + Estimation Template │ Rocket Mortgage 
  2. What Are the Most Common Home Repairs? │ Home Repair Ninja
  3. 5 common home repairs (and how much they cost) │ The Zebra
  4. Fixing Up Your Home and How to Finance It │ HUD
  5. How Many People in America Have Bad Credit? │ Ask the Money Coach
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