Best home equity lenders for bad credit in 2025

You hear it everywhere, including on Bankrate: You need strong credit to get a home equity loan, and the higher your credit score, the lower your rate. While that’s true, a less-than-sterling score – or no score at all – doesn’t automatically disqualify you from home equity loans and HELOCs. Some lenders are more amenable than others, though. Here are our picks of some of the best lenders for low or bad credit borrowers and how to find the right one for you. 

Best home equity lenders for low or bad credit 

Fifth Third Bank

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• Lender details

  • Availability: 11 states
  • Home equity products: HELOCs and home equity loans. You can also convert an adjustable-rate HELOC to a fixed-rate home equity loan
  • Minimum credit score requirement: 640
  • Funds available in: Undisclosed
  • Where to find: One of its branches, on the phone or online

• Pros and cons

  

  Pros

  • You won’t be on the hook for closing costs.
  • You can lock in your adjustable-rate HELOC into a fixed-rate loan whenever you’d like for $95 and unlock it for free.
  • There is a debit card attached to your HELOC, which earns one reward point with every $3 you spend.

  

  Cons

  • Home equity products offered only in the following 11 states: Kentucky, Florida, Illinois, Indiana, Michigan, Ohio, South Carolina, Georgia, Tennessee, North Carolina and West Virginia.
  • The lowest advertised rate requires a minimum credit score of 750 and a loan-to-value ratio of 70 percent.
  • While you can start Fifth Third’s application process online, it must be completed in person or on the phone.

Figure

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• Lender details

  • Availability: In every U.S. state except Hawaii
  • Home equity products: Fixed-rate HELOC
  • Minimum credit score requirement: 640 (680 if on a second home)
  • Funds available in: 5 days
  • Where to find: Phone-based customer support every day of the week, except holidays

• Pros and cons

  

  Pros

  • Figure uses an automated valuation model (AVM) instead of a traditional home appraisal, which typically makes the approval process faster.
  • You can get funding in as little as five days.
  • Figure’s fixed-rate HELOC is available to qualified borrowers in 49 states (except Hawaii) and Washington, D.C.

  

  Cons

  • Figure’s origination fee is 4.99%, which is on the high side.
  • APRs can stretch up to nearly 16%.
  • Figure requires that borrowers withdraw the full amount of the HELOC upfront, minus the origination fee.

RenoFi

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• Lender details

  • Availability: In all U.S. states, except for Hawaii, Utah and New York
  • Home equity products: HELOCs and fixed-rate home equity loans
  • Minimum credit score requirement: 620
  • Funds available in: 14-50 days
  • Where to find: Online only

• Pros and cons

  

  Pros

  • Partners with a variety of credit unions all around the U.S.
  • You can borrow up to 90% of your home’s post-renovation value and 125% of its current value, more than you would find with a traditional home equity loan or HELOC.
  • Renofi’s credit score minimum is 620, which is on the low side among home equity lenders.

  

  Cons

  • RenoFi is only available online, which is a con for borrowers who prefer in-person support.
  • The company is a broker that charges its own fees and closing costs.
  • You can’t get a HELOC on a home you’ve listed for sale in the past six months, and can only use HELOC funds for renovations.

Rate

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• Lender details

  • Availability: 45 states
  • Home equity products: Fixed-rate HELOC
  • Minimum credit score requirement: 620
  • Funds available in: 5 days
  • Where to find: At one of its branches, on the phone, email or through its app

• Pros and cons

  

  Pros

  • Rate’s minimum credit score requirement is 620, which is on the low side among home equity lenders.
  • The loan process is completely digital. It takes 5-10 minutes to complete the application and 5-10 days to fund the loan.
  • Rate allows you to borrow up to 85 percent of your home’s equity, which is higher than most lenders.

  

  Cons

  • Rate’s HELOCs are not offered in five states: New York, Kentucky, West Virginia, Delaware and Maryland.Rate’s HELOCs are not offered in five states: New York, Kentucky, West Virginia, Delaware and Maryland.
  • The draw period for its HELOC is 2–5 years, shorter than the 10 years usually offered.
  • Rate does not offer home equity loans.

Lower

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• Lender details

  • Availability: 40 states and Washington, D.C.
  • Home equity products: HELOCs
  • Minimum credit score requirement: 640
  • Funds available in: 17 days
  • Where to find: On its customer service line Monday through Friday between 9:00 a.m. and 5:00 p.m. EST; via email or online chat

• Pros and cons

  

  Pros

  • Lower lets you tap up to 95% of your home equity, more than most lenders offer.
  • Its online application process only takes five minutes.
  • Seeing if you can qualify for Lower’s HELOC won’t impact your credit.

  

  Cons

  • Lower’s HELOCs are not available in every state.
  • Lower only offers HELOCs.
  • No annual fees, but you will be charged a $495 application fee and a 1% origination fee.

How a low credit score affects your home equity loan

A lower credit score marks you as a bigger risk in a lender’s eyes. That means they won’t deny you, but it does mean the loan will be more expensive. Be prepared to be charged a higher interest rate. You also might face terms that aren’t as favorable, like smaller amounts or higher fees. Lenders may also require that you meet stricter loan conditions like a lower debt-to-income ratio (DTI) or a higher amount of equity in your home. 

How to get a home equity loan with bad credit

To boost your chances of getting approved for a home equity loan with bad credit, focus on improving your debt-to-income ratio – how much you regularly have going out each month vs. how much you have coming in. You can do that by paying down outstanding balances on credit cards or other loans.

Without a strong credit score, you will likely need more than the minimum 15 to 20 percent equity stake in your home to qualify. If you need help, a co-signer with good credit and working with a lender you already do business with can potentially help you score an approval. Write a letter of explanation describing why your credit score is low, especially if it has suffered a recent ding due to factors beyond your control – and/or you expect it to rebound shortly. 

How Bankrate rated the best home equity lenders for low or bad credit

• Methodology

  Bankrate periodically evaluates more than 40 home equity lenders for factors relating to affordability, availability and borrower experience, assigning each a Bankrate Score out of five stars. To determine the best home equity lenders for borrowers with low or bad credit, our editorial team evaluated lenders with a 3.5 Bankrate Score or higher, paying special attention to the availability portion, which includes credit score requirements. We then focused on lenders with a low credit score minimum (FICO defines “Fair” as 580-669). In the event of a tie, we chose the lender with the lowest introductory or permanent APR. Learn more about the Bankrate Score for home equity lenders.