BEST OF

6 Green Loans to Finance Your Remodel

Green loans help pay for eco-friendly home improvements. Compare personal loans with other financing options.

By Annie Millerbernd 

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Green loans are personal loans that you use to pay for eco-friendly home improvement projects like weatherization, solar panel installation or a kitchen renovation that uses sustainable materials and appliances.

Green personal loans are one financing option; others include government financing, credit union loans and home equity. If you decide to get a green loan, compare lenders to find one that offers an interest rate, term and monthly payment that fits into your budget.

Here are six lenders that offer green personal loans.

Green Loans to Finance Your Remodel

Our pick for

Green loans

SoFi
Get rate

on SoFi's website

SoFi

5.0

NerdWallet rating 
SoFi

Est. APR

7.99-23.43%

Loan amount

$5,000-$100,000

Min. credit score

None
Get rate

on SoFi's website

Upgrade
Get rate

on Upgrade's website

Upgrade

5.0

NerdWallet rating 
Upgrade

Est. APR

8.49-35.97%

Loan amount

$1,000-$50,000

Min. credit score

560
Get rate

on Upgrade's website

Upstart
Get rate

on Upstart's website

Upstart

4.5

NerdWallet rating 
Upstart

Est. APR

6.50-35.99%

Loan amount

$1,000-$50,000

Min. credit score

None
Get rate

on Upstart's website

Lightstream
Get rate

on LightStream's website

LightStream

5.0

NerdWallet rating 
Lightstream

Est. APR

6.99-23.99%

Loan amount

$5,000-$100,000

Min. credit score

660
Get rate

on LightStream's website

Discover
Get rate

on Discover's website

Discover® Personal Loans

5.0

NerdWallet rating 
Discover

Est. APR

6.99-24.99%

Loan amount

$2,500-$35,000

Min. credit score

660
Get rate

on Discover's website

Prosper
See my rates

on NerdWallet's secure website

Prosper

4.5

NerdWallet rating 
Prosper

Est. APR

6.99-35.99%

Loan amount

$2,000-$50,000

Min. credit score

560
See my rates

on NerdWallet's secure website

Green loans from online lenders

Some online lenders refer to loans you use toward energy- and water-saving home improvements as "green loans." These are unsecured personal loans you use to pay for large-scale projects that might include:

  • Weatherization.

  • Bath or kitchen remodels that incorporate sustainable materials.

  • Double- or triple-pane window installation.

  • Water-efficient plumbing.

  • Low-VOC floors, coverings with low volatile organic compounds.

Aside from how you use it, a green loan from an online lender resembles any personal loan: Annual percentage rates start around 6% up to 36%; loan amounts range from $1,000 to $100,000; and repayments are fixed monthly installments, typically over two to seven years.

To qualify for the lowest rates, borrowers generally need good to excellent credit (scores above 690), low debt and enough income to cover existing expenses plus the new loan payment.

How to get a green loan

Getting a green loan from an online lender is the same process as for any personal loan. Here are the main six steps.

  1. Check your credit reports. Review your credit report to spot errors that could be keeping your credit score down. If you address them before you submit a loan application, you’ll improve your chance of qualifying. You can see your credit report for free at annualcreditreport.com.

  2. Estimate the project costs. Have a reliable estimate before you start looking into financing options. Personal loans come in lump sums, so if you don’t borrow enough, it’s difficult to reapply for more.

  3. Calculate monthly payments. Use a personal loan calculator to see how the new loan fits into your budget. A calculator shows what rate and repayment term you’ll need on the loan in order to afford the monthly payments.

  4. Compare lenders. A good rule of thumb is to choose the lender that offers the lowest APR. You can also compare things like how fast lenders can fund a loan, whether they allow joint or co-signed loans and what kinds of credit-building tools they offer borrowers.

  5. Pre-qualify. Many online lenders let you pre-qualify to see what rate, term and loan amount you could be offered without affecting your credit. You can pre-qualify with multiple online lenders on NerdWallet and compare offers from different lenders at the same time.

  6. Gather documents and apply. If you go with an offer you’ve pre-qualified for, you’ll move to the application process. A lender may ask for information like W-2s, pay stubs and your Social Security number, so have those documents on hand before you apply. Submitting an application will trigger a hard credit pull.

Other green loan options

Some credit unions partner with local governments or utilities to offer low rates on green loans. Consider these alternatives to green personal loans.

Credit union loans

You may receive a discounted interest rate on a green loan from your local credit union. Colorado-based Elevations Credit Union, for example, offers an energy loan that finances updates like solar panels and energy-efficient appliances. Velocity Credit Union in Austin, Texas, has financing for energy-efficient home improvements through a partnership with the local utility company. Both loans have low starting rates.

Government funding

Federal, state and local governments may offer assistance to make your home more energy- or water-efficient. The Department of Housing and Urban Development offers FHA Title 1 Loans and 203(k) loans. Some cities provide low- or no-cost energy audits for your home and assistance with weatherization financing. You can find more information about local options at your utility company or by using the Department of Energy’s weatherization database.

Home equity

If you have enough equity in your home, you may be able to borrow it to pay for a green home improvement project. Home equity loans come in lump sums and are repaid in fixed installments, typically over five to 15 years.

With a home equity line of credit, you use as much of the money as needed and repay only what you use. HELOCs have variable rates and repayments over a longer term — often 20 years. Using equity typically means securing the loan with your home, which the lender can take if you don’t repay.

Credit cards

Credit cards are best used for small, DIY projects. Contractors may charge a small fee — 2% or 3% of the cost — if you pay with a credit card. If you have a store card from a retailer you plan to use for the remodel, you may get cash back on your purchases. Just pay off the balance to avoid having interest costs outweigh the rewards.

Last updated on December 13, 2022

Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial institutions. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.

To recap our selections...

NerdWallet's Green Loans to Finance Your Remodel

Frequently asked questions