For most people, their home is their biggest asset so it makes sense to want to complete home improvement projects to enhance or maintain the value of their property. However, many people do not have the available funds so they seek financing options. If you are someone with a poor credit history, getting a bad credit home improvement loan is doable though you should expect to pay higher financing costs than a borrower with good credit.

When applying for any loan, the first thing a lender will do is look at your credit score by reviewing your credit reports. Make every effort to improve your credit rating before approaching lenders as a better credit score will yield lower interest rates. Any percentage points you can knock off your loan will save you money.

There are generally two types of home improvement loans for people with bad credit: secured and unsecured. A secured loan requires that you put up an asset as collateral. This could be your car or home, for example.

If you have built up some equity in your home, ask your financial institution about obtaining a home equity loan or a home equity line of credit. The amount of home equity you have determines how much money you may borrow. Alternatively, you can request a secured personal loan against your car. Lenders will offer secured loans at lower interest rates and more favorable terms than unsecured ones.

As someone with bad credit, having collateral will increase your chances of qualifying for a home improvement loan. However, you may prefer an unsecured loan and accept the high rates to avoid risking your assets should you default. Getting a co-signer to guarantee your home improvement loan with bad credit is another way to try to reduce your interest rate without having to pledge collateral.

Once you've decided which type of loan is most suitable for you, apply for quotes from a number of different lenders to ensure that you get the best rate and term. Many lenders offer online quotes to expedite your request so make use of the Internet to save some time. Do approach your bank or credit union but depending on how bad your credit is, these lenders are more conservation about transacting with high risk clients. There are lenders that that specialize in financing home improvement loans for bad credit but they will typically charge higher interest rates.

Researching bad credit home improvement loans requires some footwork so use the Internet to explore your options. Attending to some much needed home repair or home improvement is well worth it if your current financial status and household income will not deteriorate further as a result. In fact, taking out bad debt loans to improve your house can help improve your credit rating over time if you make timely payments. Before selecting a vendor, ensure that you weigh all your offers and understand what your obligations are.

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