If you are looking for the best home equity loan lenders for bad credit in 2026, Rate and RenoFi are the most accessible starting points — both accept FICO scores as low as 620, and RenoFi allows a combined loan-to-value (CLTV) up to 90%. We evaluated six lenders on minimum credit score, maximum CLTV, published APR ranges, funding speed, and fees. In home equity lending, "bad credit" usually means 620–679; below 620, an FHA cash-out refinance is the more realistic path.
How We Ranked These Lenders
| Criteria | Weight | Why It Matters |
|---|---|---|
| Minimum credit score | High | The hardest gate — a 620 floor versus 680 decides whether you can apply at all. |
| Maximum CLTV | High | Sub-680 borrowers are approved on equity, not score. A 90% cap unlocks roughly twice the cash of a 70% cap. |
| APR range | High | Bankrate put average home equity rates near 8.10%–8.16% for strong credit in January 2026; sub-680 borrowers see 9.5%–11%+. |
| Funding speed | Medium | About 5 days at digital lenders versus 30–45 days at banks. |
| Fees | Medium | Origination, appraisal, and early-closure fees add 2%–5% of the loan. |
Data sources: CFPB home equity and HELOC guidance, Federal Reserve H.15 Selected Interest Rates, FHFA conforming loan limits, FHA Handbook 4000.1, and each lender's published disclosures. All rates are ranges as of August 2026 and subject to change; no rate is guaranteed until you receive a written offer.
1. Rate — Lowest Score Floor With Usable CLTV
Best for: Borrowers at 620–650 who need meaningful cash
Minimum FICO: 620 · Maximum CLTV: 85%
Rate pairs a 620 minimum score with an 85% CLTV cap — rare among large lenders. On a $400,000 home with a $250,000 first mortgage, an 85% cap leaves roughly $90,000 of borrowable equity versus about $30,000 at a 70% cap.
Pros
- 620 minimum sits at the low end of the mainstream market
- 85% CLTV is generous for a subprime-tolerant lender
Cons
- Pricing at 620 runs well above prime; expect a double-digit APR
- Not available in every state
Who This Is Best For
Borrowers in the low-600s with 15%–25% equity who cannot wait out a credit rebuild. A poor fit above 700 — cheaper pricing exists elsewhere.
2. RenoFi — Highest CLTV at a 620 Floor
Best for: Renovation borrowers with limited equity
Minimum FICO: 620 · Maximum CLTV: 90%
RenoFi accepts scores from 620 at up to 90% CLTV, and its renovation products underwrite against after-renovation value rather than today's appraisal. For a recent buyer with thin equity, that is often the difference between approval and decline.
Pros
- Highest CLTV in this group at a 620 minimum
- After-renovation valuation unlocks funds a standard appraisal will not
Cons
- Renovation-focused; weak fit for debt consolidation
- Requires contractor documentation, which slows closing
Who This Is Best For
Homeowners financing a specific project who are equity-constrained today. Skip it if you want unrestricted cash without project paperwork.
3. Spring EQ — Second-Lien Specialist
Best for: Borrowers who want the largest possible draw
Minimum FICO: 640 (660 for its HELOC) · Maximum CLTV: Up to 90%, select programs to 95%
Spring EQ underwrites second liens as its core business. Its published maximum DTI is 45%, relaxed only for borrowers with a 700+ score and at least $3,500 in monthly residual income — an unusually transparent compensating-factor rule.
Pros
- Among the highest CLTV ceilings in the second-lien market
- Self-employed and non-W-2 documentation paths available
Cons
- 640 floor rules out the 620–639 band
- Origination fees apply and vary by state
Who This Is Best For
Borrowers at 640+ with substantial equity who need maximum proceeds. Not an option below 640.
4. Figure — Fastest Funding
Best for: Speed-sensitive borrowers
Minimum FICO: 640 · Maximum CLTV: 75%–90% by credit tier
Figure runs a fully digital HELOC process and advertises funding in as few as five days, versus the 30–45 days typical of bank second liens. CLTV tiers move with credit score, so a 640 applicant should expect the low end of the 75%–90% range.
Pros
- Five-day funding is the fastest here
- Fixed-rate draw structure removes payment uncertainty
Cons
- CLTV tightens sharply at lower scores, capping your cash
- Origination fee charged on the initial draw
Who This Is Best For
Borrowers at 640+ facing a deadline. Less useful if you need maximum CLTV at a marginal score.
5. Fifth Third Bank — Bank Pricing at a 640 Floor
Best for: Deep-equity borrowers who want a bank
Minimum FICO: 640 · Maximum CLTV: 70%
Fifth Third accepts scores from 640 but caps CLTV at 70% — the tightest limit in this group. The trade is deliberate: the bank offsets credit risk with a large equity cushion, and borrowers who clear that test often see pricing closer to prime than online subprime lenders offer.
Pros
- Bank-grade pricing available to sub-680 borrowers with deep equity
- Existing-customer rate discounts, no aggressive origination structure
Cons
- 70% CLTV materially limits how much you can borrow
- Available only in the bank's retail footprint
Who This Is Best For
Homeowners with 35%+ equity and a 640–679 score who value price over loan size. Wrong fit if you need to stretch CLTV.
6. TD Bank — Middle-Ground Option
Best for: East Coast borrowers just under 680
Minimum FICO: 660 · Maximum CLTV: Up to 89.9% on select programs
TD Bank accepts scores as low as 660, below the 680 threshold most banks enforce, making it the most accessible traditional-bank option for borrowers who narrowly miss prime. In-person underwriting can weigh compensating factors an algorithm would miss.
Pros
- 660 floor is unusually low for a large retail bank
- Human underwriting review for borderline files
Cons
- 660 minimum excludes the 620–659 range entirely
- Footprint limited largely to the East Coast
Who This Is Best For
Borrowers at 660–679 inside TD's service area. Look elsewhere below 660 or outside the footprint.
Quick Comparison
| Lender | APR Range (Aug 2026, subject to change) | Min Credit Score | Max CLTV | Best For |
|---|---|---|---|---|
| Rate | ~9.5%–13% | 620 | 85% | Lowest score floor with real CLTV |
| RenoFi | ~9%–13% | 620 | 90% | Renovation borrowers, low equity |
| Spring EQ | ~9%–13% | 640 | Up to 90% (95% select) | Largest possible draw |
| Figure | ~9%–13% | 640 | 75%–90% | 5-day funding |
| Fifth Third | ~8.5%–11% | 640 | 70% | Bank pricing, deep equity |
| TD Bank | ~8.5%–11.5% | 660 | Up to 89.9% | Near-prime bank borrowers |
If You Are Declined: Three Realistic Alternatives
FHA cash-out refinance. FHA permits scores as low as 500 under Handbook 4000.1, though lender overlays usually require 620–680. Maximum LTV is 80% regardless of score, with a 12-month seasoning requirement. The catch: you replace your entire first mortgage, surrendering a below-market rate if you have one, and take on FHA mortgage insurance.
Credit repair on a realistic timeline. Moving from 640 to 680 is typically a 3–9 month project. The fastest levers are cutting revolving utilization below 30% (registers in one to two billing cycles) and disputing genuine reporting errors. Collections age out slowly; ignore promises of instant score jumps.
HELOC versus home equity loan. A HELOC often carries a looser overlay and lower upfront cost, but its rate is variable and moves with the prime rate. A fixed home equity loan costs more and prices higher at low scores, but the payment is locked. On a tight budget with weak credit, payment certainty usually beats the initial rate savings.
How We Researched This
This guide draws on CFPB guidance, the Federal Reserve H.15 release, FHA Handbook 4000.1, FHFA loan limits, and each lender's published credit score, CLTV, DTI, and fee disclosures, cross-referenced against Bankrate and NerdWallet lender research from 2025–2026. We excluded lenders that do not publish a minimum credit score and hard-money second-lien shops. We accepted no lender compensation for placement or ordering.
Last updated: August 19, 2026. We review this guide quarterly.
Frequently Asked Questions
What is the minimum credit score for a home equity loan in 2026?
620 is the practical floor at mainstream lenders. Rate and RenoFi accept 620; Spring EQ, Figure, and Fifth Third start at 640; TD Bank at 660. Most banks prefer 680+, and lenders treat anything under 680 as subprime.
How much does bad credit actually cost?
Roughly 1 to 3 percentage points. Against the 8.10%–8.16% average for strong credit in January 2026, sub-680 borrowers are commonly quoted 9.5%–11%. On a $50,000 loan over 15 years, a 2-point spread costs about $9,000 in extra interest.
Can I get a home equity loan with a 580 credit score?
Almost never from a mainstream home equity lender. At 580 your realistic paths are an FHA cash-out refinance (FHA allows down to 500 at 80% LTV, though lender overlays usually require 620+) or waiting for your score to improve.
Does a home equity loan put my house at risk?
Yes. It is a second mortgage secured by your home, and default can lead to foreclosure even if your first mortgage is current. Be cautious about converting unsecured debt into debt secured by your residence.
How much equity do I need with bad credit?
Plan on 15%–20% minimum, and expect lenders to want more. Sub-680 approvals usually hinge on compensating factors — 30%+ equity and a debt-to-income ratio below 36% move the needle most.
What DTI do lenders accept?
Most cap DTI at 43%–45%. Spring EQ publishes a 45% maximum, relaxed only for 700+ scores with $3,500+ in monthly residual income. Rocket Mortgage allows up to 50%. Lower is always better with a weak score.
Will applying to several lenders hurt my score?
Minimally, if you cluster them. Mortgage and home equity inquiries pulled within a 14–45 day window are typically counted as a single inquiry, depending on the scoring model. Rate-shop inside two weeks rather than spreading applications over months.
Are there fees beyond the interest rate?
Yes — origination, appraisal, title work, and sometimes an early-closure fee if you pay off within 24–36 months. Closing costs commonly run 2%–5% of the loan. Compare the APR, which includes fees, rather than the headline rate.
Important Disclosures
This content is for informational purposes only and does not constitute financial, mortgage, legal, or tax advice. RateRoots is not a lender. Rates, terms, fees, credit score requirements, CLTV limits, and availability change frequently and vary by state, property type, and individual borrower profile. Figures reflect publicly available information as of August 19, 2026 and are subject to change without notice. No rate or approval is guaranteed until you receive a written offer from a lender.
A home equity loan or HELOC is secured by your home. If you fail to make payments, you could lose your home to foreclosure.
Equal Housing Lender. All lenders referenced are equal housing lenders and comply with the Fair Housing Act and the Equal Credit Opportunity Act.
Affiliate disclosure: some links on this page may be affiliate links, and RateRoots may earn a commission if you apply through them. This does not influence our rankings — our methodology is described above and applied identically to compensating and non-compensating lenders.
