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Home Improvement Loans For People With Bad Credit

Home Improvement Loans For People With Bad Credit

What Can You Use a Home Improvement Loan For?

Home improvement loans can be used to pay for any changes the home owner with bad credit desires, including putting in a swimming pool or getting window blinds. A homeowner can also use the bad credit home improvement loan to make home repairs, remodel kitchens or bathrooms, or even build and extension on the home.

Making improvements on you home using a home improvement loan can increase the value of your home. Most homeowners with bad credit use the home improvement loan to increase the equity of their home by making home improvements over a period of time.

Can You get a Home Improvement Loan with Poor Credit History?

Say you have bad or poor credit. Or if you have previously, even recently, been denied for an unsecured loan. Can you still get a home improvement loan?

Actually, depending on the value of your home, you still can get one — a secured one. You may not be able to get an unsecured loan (a loan not backed by collateral), but you certainly can get a secured one IF you have some equity in your home.

Home improvement loans can be described as being inexpensive and having low interest rates due to being secured by your property.

Even when you are having trouble obtaining an unsecured loan or if you have a bad credit score, you may still qualify for a large home improvement loan at a low interest rate. Getting a bad credit home loan is done with more ease today than it has been in recent years. This is contrary to the belief common to many homeowners, that bad credit or bankruptcy will make getting bad credit home loans impossible or extremely challenging. In truth, these homeowners are choosing the wrong lenders.

The problem that most homeowners have is that they apply to one home improvement loan provider, get turned down, and assume that no lender will give them a loan. That falls into the same realm of only going to one dealership when you are trying to purchase a new car.

Just as you can negotiate the price you pay for a car, you can talk terms when looking into home improvement loans for people for bad credit. When searching for the right home improvement loan, be sure to request quotes from various companies that you can sit down and compare.

You can go online and do a search for bad credit home loans and find both bad credit home improvement lenders and service providers that will assist you in finding a lender that best matches your needs. There are vendors out there that specialize in these types of loans.

But, be very careful. Quite a few of these are either scams or predatory lenders who will charge you outstanding interest rates.

According to Bad Credit Alliance, it is very important to take the time investigate various bad credit home loan providers and compare quotes. This will allow even the person with bad credit to be able to get the lowest rate possible for a home improvement loan.

Tip: Use a Loan Comparison Tool Online

Many websites or applications make comparing rates of home improvement lenders a lot easier due to the fact that they have alliances with many, many home improvement loan providers. Using one of these websites or applications allows you to do two things.

First, you will be able to find out what the average total costs you will have to face by getting a quality home improvement loan for people with bad credit.

Second, you will be able to find the lowest annual percentage rates available.

Tip: Apply for Loans at Different Sources to get the best rate / offer

You may need to have patience and be relentless when you are attempting to get home improvement loans, even with the help of competent home improvement lenders. You can try applying or multiple lenders individually, or you can apply through a mortgage service company which will provide your loan application to several companies offering home improvement loans for people with bad credit using a single credit check.

Tip: Use Your Home Equity as Collateral for a Secured Home Improvement Loan

Many people who are looking for home improvement loans for people with bad credit have no idea of where to start, where to look, or what process to use. The equity you have built, by owning your home over time, makes you able to get home improvement loans.

This type of loan is called a SECURED LOAN, and it’s secured via the equity (the value of your home over the mortgage amount you owe) of your house. You can use this to ‘back’ a loan. Now the idea here is that you use some of your home equity to back a loan OR you cash in some of that equity directly to afford improvements on your home.

Hopefully, those improvements will further increase the value of your home, paying off or reducing the cost of those improvements over time.

Tip: Use an Online Lender 

With the difficulty of talking to a real person on the phone, having to work with people with little or no experience, finding the costs are going to be higher than you expected, and filling out a ton of paperwork, many people feel that going through the home improvement process can be forbidding. However, there are some services available to help ease some of these frustrations by using technology and home improvement loan personnel who are devoted and have expert knowledge about getting bad credit home loans. This can make it a lot easier and a lot less mind boggling for the person looking for home improvement loans for people with bad credit.

Online applications may be the choice for a person looking to get instant home improvement loan rate quotes, want 24 hour service, and want a loan designed to meet his/her wants, needs, and goals. By using an online application a person will also gain the benefit of a speedy procedure, lower final costs of the home improvement loans for people with bad credit, and no cost of commission for loan officers. Bad credit or bankruptcy will not effect the assistance you will get with your application.

Tip: Improve Your Credit

Ultimately, to get the best loan interest rate and have the best loan opportunities, you need to have good credit. There is no way around this. By having bad credit, you are getting the worst deal on your loan. And yes, you can get loans with bad credit, but those loans won’t be the best ones.

We recommend you improve your credit over time so you can get better loan products. You may want to WAIT a couple years, using that time to improve your credit score, then apply for a home improvement loan then. This will save you money on interest rates because you WILL get a better rate than you can now, with bad credit.

Don’t know where to start improving your credit?

  1. Check your credit history / get your credit report (hint: creditkarma.com lets you look at your credit report for free)
  2. Start making improvements to your credt based on that report
  3. Over time (1-3 years), your credit should improve from poor to good (if you work on improving your credit).
  4. You can then apply for a home improvement loan and get a better rate.

Read our How to Repair Your Credit article for more info.

About The Author

Ben Todd

Ben was a seriously broke graduate student with bad credit who after finding himself rejected for any sort of credit card or loan for most of his adult life, finally decided to get his financial life in order. 'He spent several years reading as many financial advice books and blogs as he could.And suprisingly, Ben found he actually LIKED the topic of personal finance; after fixing his own finances, starting his own successful work at home website business, and using his earnings to get out of debt, created echeck.org to help others do likewise!

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