Models with vector-like leptons can strongly modify the lepton mass generation mechanism and lead to correlated effects in lepton-Higgs couplings and lepton dipole moments. Here we begin an analysis of higher-order corrections in such models by setting up a renormalization scheme with full on-shell conditions on the lepton self energies, masses and fields. A minimal set of fundamental parameters is renormalized in the $\overline{\text{MS}}$ scheme. We provide a detailed discussion of lepton mixing and redundancies at higher orders, show how the relevant counterterms can be obtained from the renormalization conditions, and determine the $\beta$-functions corresponding to the scheme. As a first application we calculate the one-loop effective muon--Higgs coupling and analyse its correlation with the muon anomalous magnetic moment $\Delta a_\mu^{\text{VLL}}$. In the interesting case of large masses and opposite-sign coupling, the lowest-order correlation implies a fixed value of $\Delta a_\mu^{\text{VLL}}$ around $22.5\times 10^{-10}$, while the higher-order corrections significantly reduce this value to the interval $(10...18)\times 10^{-10}$.