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home equity loan bad credit

Can you get a home equity loan with bad credit

Can you get a bad credit home equity loan? 

The equity you built in your property is a potential source of capital that you can put towards financial obligations, from consolidation loans to home renovation. A bad credit home equity loan is readily available regardless of financial position. At Alpine Credits, our focus is on the equity you’ve built in your property, not your credit score.

Lending Requirements

While you can get home equity loans for bad credit, this doesn’t apply to all lenders. You can find home equity loans from traditional and alternative lenders, but they have different minimum requirements.  

Traditional lenders  Alternative lenders 
  • Minimum of 620 credit score 
  • 35% debt-to-income ratio or lower 
  • Consistent debt repayments history 
  • Stable employment for at least two years 
  • At least 25% equity in your home 


  • Canadian residency or citizenship  Minimum 19 years old 
  • At least 25% home equity 

The minimum requirements for a conventional loan are a high bar for many Canadians, especially those with credit scores on the lower end. As a result, those needing a home equity loan typically turn to more flexible lenders like us at Alpine Credits.

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Advantages of using home equity loans for bad credit 

A home equity loan from Alpine Credits offers many benefits compared to traditional personal or home equity loans from banks.  

Easier approval process

Credit scores or income do not influence your approval of home equity loans from Alpine Credits. Homeowners come from many financial backgrounds, and Alpine Credits believes everyone should be able to access financial support regardless of credit score. Because your property secures the loan, getting approved is more likely.

Comparatively lower fixed interest rate 

Home equity loans have lower interest rates than credit cards. They usually also come with fixed interest rates, which allows you to plan and budget accordingly.  

More funding 

The more equity you have built, the bigger your loan can be. Personal loans in Canada are limited to a maximum of $50,000, but home equity loans allow you to have significantly more funding. Depending on the value of your home and how much you have paid, you could apply for a loan worth hundreds of thousands of dollars. With Alpine Credits, you can receive funding of up to $2 million.  

No need to sell your home 

Across Canada, housing values have been rising steadily over the previous years. A home equity loan allows you to take advantage of these high values as a form of financing without selling the property. The home is many Canadians’ most valuable asset, offering much potential as a financial tool.   

Purpose flexibility 

Traditional lenders will consider the loan’s purpose alongside other factors, but Alpine Credits lets you use your home equity for multiple needs. Homeowners can do some of the following with their home equity loan.  

  • Credit consolidation—if you have multiple bills and credit cards, you can repay them with a home equity loan. You only have to focus on one payment a month and save on the interest. 
  • Home renovation—some changes can have extensive budgets, and a home equity loan allows you to borrow more than personal loans offer.   
  • Business financing—whether you need funding to launch your entrepreneurial endeavors or financially support your existing business, a home equity loan can help. You can access substantial financing with a shorter processing time than business loans.  
  • Education—to help support your or your child’s post-secondary education goals, a home equity loan can cover all those costs, from tuition to transportation.  

How to get a loan with bad credit from a traditional bank 

Getting a home equity loan from a traditional lender involves not only a complex process but also requires you to meet strict qualification criteria.

Take a look at your credit report 

Canada’s credit reporting bureaus give you one free annual credit rating. You can use this report to see what information your home equity lender will evaluate. 

In addition to getting a glimpse at your credit score, you can address any potential inaccuracies. Equifax and TransUnion can help you dispute such information on your credit report. 

Look into your debt-to-income ratio 

Your debt-to-income ratio is one of the most important personal finance metrics for getting a home equity loan from traditional lenders. It describes the percentage of your gross monthly income that goes towards credit card payments and other personal loans. 

If you have a monthly income of $10,000 and $5,000 goes towards repaying your mortgage, car payment, and other debts, you have a debt-to-income ratio of 50%. In the eyes of a traditional lender, this is too much. Generally, you don’t want your debt-to-income ratio to exceed 35%.  

Try decreasing your debt-to-income ratio before applying for a loan at major financial institutions. If you require urgent financing, consider working with a more flexible lender like Alpine Credits. 

Estimate the equity you have in your home 

Home equity is calculated by subtracting your outstanding mortgage balance from the market value of your home. For example, if you have a home worth $500,000 and $100,000 remaining on your mortgage, you have $400,000 in available equity. 

The Financial Consumer Agency of Canada allows you to borrow an amount no greater than 80% of your home’s value against it. As such, you’d be able (at least from the government’s perspective) to borrow the entire $400,000 in equity, assuming you had no other liens on the property. 

Additionally, remember that traditional home equity lenders often require that you have at least 15% to 20% equity in your home. In other words, you’ll need at least $75,000 in equity to qualify for a loan on a $500,000 home. 

In the case of Alpine Credit, you need to own at least 25% equity in your home, and you can borrow up to 75% of your home equity. 

Apply for your home equity loan 

Your next step will be to apply for a home equity loan at a traditional financial institution. You’ll typically need to have your house appraised, provide income verification, and agree to a credit check. 

If you have a credit score below 620, the chances of getting approved are lower. If you get approved with a credit score less than the minimum, the interest rate may be high, or your approved amount is lower than expected. 

Wait for your application results 

Depending on the institution you applied for a home equity loan with, a decision can take several weeks to months if you have poor credit. 

Before receiving a decision, the bank may contact you and require additional information about your income and credit history. Any delay in getting that information to them can lengthen the entire process considerably. 

Receive or repeat 

If your application is successful, the financial institution will directly deposit the funding into your bank account. You can then use the money to meet your financial needs. However, the interest rate may be higher.  

Otherwise, you may not be approved for a loan, and you’ll have to try repeating the process at a different lender. Canadian banks have gotten considerably stricter with their lending criteria, even for secured loans. 

Traditional lenders are not the only institutions that offer home equity loans. Alternative lenders like Alpine Credits are also sources of home equity financing. You only need to own at least 25% of your home to be approved for a loan.  

Refinance home equity loan 

After some time, you can think about refinancing your home equity loan, which you can do at the same lender or a new one. People refinance their home equity loans to reduce their monthly payments through a lower interest rate or to borrow more from their home equity.  

Traditional lenders will conduct the same background check when you refinance. If you refinance and switch your lender to Alpine Credits, you only need to provide how much home equity you have.

Where to get a loan with bad credit 

Home equity loans are one of the best sources of loans for bad credit. Alpine Credits is an alternate lender that helps homeowners access their equity as a loan. The process is more straightforward and has more flexible criteria than major financial institutions.

Apply online 

Fill out Alpine Credit’s application form. You’ll notice that we don’t ask you for any information regarding your credit history or income. Our primary concern is the amount of equity you have in your home! If you own at least 25% of your home, you’re approved.  

Receive an application decision within 24 hours 

We strive to issue application decisions within 24 hours. This is a far cry from the several business days traditional lenders often take to review your application. 

At Alpine Credits, we also pride ourselves on being the lender through which Canadian homeowners get approved. Even if your credit history isn’t the greatest, we’ll work with you to find a home equity financing solution that works for you. 

Once you’ve received a decision on your application, one of our agents will contact you to discuss the next steps regarding your loan. The process is simple with Alpine Credits because the money is yours to access.  

Contact Alpine Credits to get a free quote for a home equity loan with poor credit today

If you’re ready to apply for a home equity loan from Alpine Credits, visit this page. For more than 50 years, we’ve been approving Canadian homeowners, regardless of their credit scores. Come see why we’re one of the top-rated home equity lenders in Canada!

At Alpine Credits, Homeowners Get Approved.

Call (1-800-587-2161) to find out how you can subscribe for RESP through your home equity.

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Frequently asked questions

You can get a home equity loan from Alpine Credits regardless of your credit score. You’re eligible for one as long as you own 25% of your home.  

Traditional lenders like Canada’s major banks routinely deny home equity loan applicants with poor credit scores. You’re more likely to find approval with Alpine Credits because you don’t need to provide your credit score or income status.

With Alpine Credits, you can get a loan worth up to 75% of your home equity.