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Once you have an estimate for your home improvement project’s cost, the next step is deciding how to pay for it. If you’re considering a home improvement loan, use this personal loan calculator to estimate the total interest and monthly payments, based on the loan term and interest rate you select.
Understanding your home improvement loan calculator results
Here's what the calculator will show you.
Monthly payment: What you can expect to pay each month. A longer term can lower your monthly payments, but it will also increase the total interest.
Total interest payments: The total amount of interest you’ll pay over the lifetime of the loan. Your interest rate is based primarily on things like your credit, income and debts. The loan’s amount, term and purpose can also affect the rate.
Total loan payments: The amount of money you'll have repaid at the end of the loan. This number depends on the amount you borrow and your interest rate.
Home improvement loan calculator
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Financing options for your home improvement project
Factors like your equity, credit profile, income, savings and how quickly you need funds can affect how you pay for a remodel or repair.
Explore all your options to find the best way to pay for your project.
Personal loans offer fast funding for homeowners who want to get started quickly. Most lenders say they can fund a loan in less than a week, and some say they can deposit the funds in your account the same day you apply.
Rates on unsecured loans tend to be higher than home equity loans and lines of credit, which require you to use your home as collateral. Borrowers with good or excellent credit (credit scores above 689) and a low debt-to-income ratio qualify for the lowest personal loan rates. Though rates may be high, a bad credit score (below 630) may not prevent you from qualifying for a personal loan.
The shorter repayment periods on personal loans (two to 12 years) compared with home equity financing (often 10 or more years) means your monthly payments may be larger, but you’ll clear the debt sooner.
How to pre-qualify for a personal loan
Many lenders let you pre-qualify to see your potential interest rates and loan terms, without affecting your credit score.
Home equity loans
With a home equity loan, you can typically borrow between 80% and 85% of your home’s value, minus what you owe, and make payments for up to 15 years.
Like a personal loan, you get the funds in a lump sum and repay it in fixed installments. A home equity loan may be the right option if you can lock in a low rate and want predictable monthly payments.
Home equity lines of credit
A home equity line of credit, or HELOC, lets you tap into your home’s equity as you need it. A HELOC may be an option if you’re unsure how much your home improvement project will cost, or if you plan to pay for it in stages.
You can typically get a line of credit worth up to 85% of your home’s value, minus what’s owed on mortgages. HELOCs have variable interest rates. Even if you start with a low rate, it could rise over the long repayment period.
A cash-out refinance may be a good choice if you have equity in your home and if current mortgage rates are lower than what you’re paying. The new home loan is for a larger amount than the existing one, and you net the difference in cash.
Cash-out refinancing may be better for larger, long-term projects because of the closing costs and lengthy underwriting and appraisal processes it requires.
Credit cards’ high interest rates make them an expensive way to pay for a large renovation. But used strategically, a credit card can help you build credit, get rewards or finance the project interest-free.
Reward and store cards can get you cash back on some of your purchases and help you build credit at the same time. If you plan to go to the same hardware store for the majority of a DIY project, for example, you can use a store card to earn rewards. Pay the card off in full each month to avoid letting interest outweigh the perks.
A 0% APR credit card could be an interest-free way to pay for a small project. These cards require good or excellent credit to qualify. They waive interest for a period of about 15 to 21 months, so be sure you can pay off the card’s balance in full before the introductory offer expires.
More about borrowing for home improvements
Learn about the difference between personal loans and home equity loans.
Find out how home improvement loans work and which one is right for your project.