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5 Personal Loans for Kitchen Remodels: Compare Financing Options

Annie MillerberndFebruary 19, 2020

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Kitchen remodel financing options include personal loans, home equity financing, cash-out refi or credit cards. Compare these options to find what's best for you.

Whether you want a complete overhaul or you’re sprucing up to sell, giving your kitchen a makeover can be exciting — but also expensive.

One of the most important decisions of a kitchen remodel comes before you even start: how to pay for it. An unsecured personal loan is a relatively fast and convenient choice. Options that may be less expensive include home equity financing, cash-out refinance and credit cards.

The best way to finance a kitchen remodel depends on the price of the project, your credit, how much equity you have in your home and your goal with the renovations.

Here are our picks for kitchen remodel loans, the pros and cons of getting one and other options you should consider.

Summary of Personal Loans for Kitchen Remodels: Compare Financing Options

LenderNerdWallet Rating Est. APRMin. Credit ScoreLearn More
Lightstream

LightStream

on LightStream's website

Best for Kitchen remodel loans

5.49 - 20.49%

660

on LightStream's website

Marcus by Goldman Sachs

Marcus by Goldman Sachs

on Goldman Sachs's website

Best for Kitchen remodel loans

6.99 - 19.99%

680

on Goldman Sachs's website

SoFi

SoFi

on SoFi's website

Best for Kitchen remodel loans

5.99 - 16.19%

680

on SoFi's website

Wells Fargo Personal Loan

Wells Fargo Personal Loan

See my rates

on NerdWallet's secure website

Best for Kitchen remodel loans

5.49 - 24.49%

600

See my rates

on NerdWallet's secure website

Lending Club

LendingClub

See my rates

on NerdWallet's secure website

Best for Kitchen remodel loans

10.68 - 35.89%

600

See my rates

on NerdWallet's secure website

Our picks for

Kitchen remodel loans

These lenders offer personal loans with competitive rates and amounts that can fund large and small renovations.

Lightstream

on LightStream's website

LightStream

Lightstream

Min. Credit Score

660

Est. APR

5.49 - 20.49%

Loan Amount

$5,000 - $100,000

on LightStream's website


Min. Credit Score

660

Key facts

LightStream targets strong-credit borrowers with no fees and low rates that vary based on loan purpose.

Pros

  • No fees.

  • Rate discount for autopay.

  • Low starting rates.

Cons

  • Does not offer pre-qualification on its website.

  • Requires several years of credit history.

Qualifications

  • Minimum credit score of 660.

  • Enough income to pay existing debts and a new LightStream loan.

  • Maximum debt-to-income ratio varies depending on existing assets and the reason for the loan.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Your loan terms are not guaranteed and may vary based on loan purpose, length of loan, loan amount, credit history and payment method (AutoPay or Invoice). Rate quote includes AutoPay discount. AutoPay discount is only available when selected prior to loan funding. To obtain a loan, you must complete an application on LightStream.com, which may affect your credit score. You may be required to verify income, identity and other stated application information. Payment example: Monthly payments for a $5,000 loan at 12.8% APR with a term of 3 years would result in 36 monthly payments of $168. Some additional conditions and limitations apply. Advertised rates and terms are subject to change without notice. SunTrust now Truist is an Equal Housing Lender. © 2020 Truist Financial Corporation. SunTrust®, Truist, LightStream®, the LightStream logo, and the SunTrust logo are service marks of Truist Financial Corporation. All rights reserved. All other trademarks are the property of their respective owners. Lending services provided by SunTrust now Truist Bank.
Read Full Review
Marcus by Goldman Sachs

on Goldman Sachs's website

Marcus by Goldman Sachs

Marcus by Goldman Sachs

Min. Credit Score

680

Est. APR

6.99 - 19.99%

Loan Amount

$3,500 - $40,000

on Goldman Sachs's website


Min. Credit Score

680

Key facts

Marcus loans stand out for low rates, no fees, and flexible loan terms and payment options.

Pros

  • No fees.

  • Flexible payment options.

  • Directly pays creditors for debt consolidation loans.

  • Rate discount with autopay.

Cons

  • No option to include co-signer.

  • Reports payments to one of the three major credit bureaus.

Qualifications

  • At least 18 years old (19 in Alabama; 21 in Mississippi and Puerto Rico).

  • Valid U.S. bank account, Social Security number or tax ID.

  • 680+ credit score.

  • For debt consolidation loans, you may be required to send part of the loan directly to your creditors.

Available Term Lengths

3 to 6 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. The availability of a loan offer and the terms of your actual offer will vary due to a number of factors, including your loan purpose and our evaluation of your creditworthiness. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions.
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SoFi

on SoFi's website

SoFi

Min. Credit Score

680

Est. APR

5.99 - 16.19%

Loan Amount

$5,000 - $100,000

on SoFi's website


Min. Credit Score

680

Key facts

SoFi is a strong option for consumers with good to excellent credit, offering low rates, no fees and flexible payments.

Pros

  • Soft credit check with pre-qualify.

  • Flexible payment options.

  • Offers member perks.

Cons

  • Does not offer direct payment to creditors with debt consolidation loans.

  • Does not offer refinance options.

Qualifications

  • Minimum credit score: 680, but typically 700 or higher.

  • Minimum annual income: None; borrowers' average is over $100,000.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Fixed rates from 5.99% APR to 16.19% APR (with AutoPay). SoFi rate ranges are current as of July 10, 2020 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
Read Full Review
Wells Fargo Personal Loan
See my rates

on NerdWallet's secure website

Wells Fargo Personal Loan

Wells Fargo Personal Loan

Min. Credit Score

600

Est. APR

5.49 - 24.49%

Loan Amount

$3,000 - $100,000

See my rates

on NerdWallet's secure website


Min. Credit Score

600

Key facts

An option for existing Wells Fargo customers, offering rate discounts and a co-sign option.

Pros

  • Offers secured loan option.

  • Offers free credit score access.

  • Offers direct payment to creditors with debt consolidation loans.

Cons

  • Borrowers without existing Wells Fargo accounts required to apply in person.

  • No option to pre-qualify.

Qualifications

  • Minimum credit score: 600; most borrowers have scores above 660.

Available Term Lengths

1 to 7 years

Fees

  • Origination fee: None.

Disclaimer

Read Full Review
Lending Club
See my rates

on NerdWallet's secure website

LendingClub

Lending Club

Min. Credit Score

600

Est. APR

10.68 - 35.89%

Loan Amount

$1,000 - $40,000

See my rates

on NerdWallet's secure website


Min. Credit Score

600

Key facts

LendingClub, the pioneer of peer-to-peer lending, offers for small and mid-sized kitchen remodels, with maximum loan amounts of $40,000.

Pros

  • Offers direct payment to creditors with debt consolidation loans.

  • Joint loan option.

  • Soft credit check with pre-qualification.

Cons

  • Charges origination fee and late fees.

  • Does not offer mobile app to manage your loan.

Qualifications

  • Minimum credit score of 600. LendingClub uses FICO 8 credit scoring model.

  • Minimum credit history of three years.

  • Debt-to-income ratio of less than 40% for single applications, 35% combined for joint applicants.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 2% to 6%

  • Late fee: Greater of $15 or 5% of payment after 15-day grace period.

Disclaimer

*All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage and history. The APR ranges from 10.68% to 35.89%. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long-term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: 595 Market St suite 200 San Francisco Ca 94105. **Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between Jan. 1, 2018, and July 20, 2018. The time it will take to fund your loan may vary.
Read Full Review

Getting an unsecured kitchen remodel loan: Pros and cons

Home improvement is one of the most common reasons people take out a personal loan, lenders say. It can make sense if you don’t have a lot of equity in your home or you need the funds fast. Consider these pros and cons of kitchen remodel loans.

Pros

  • No collateral: With an unsecured personal loan, you don’t have to put your home up as collateral, which is the case with home equity options.

  • Fast funding: Getting a personal loan typically takes from one to seven business days. It can take 30 to 45 days to access the money with a cash-out refinance, home equity loan or HELOC.

  • Lower rates than credit cards: Personal loan interest rates range from 6% to 36%, and borrowers with good or excellent credit may qualify for the lowest rates. On average, these rates are lower than those on most credit cards.

Cons

  • Higher rates than home-equity options: Because personal loans are unsecured and typically have shorter repayment terms of two to seven years, they tend to have higher interest rates than home equity loans and lines of credit.

  • May be harder to qualify: Issuers of personal loans primarily use just your personal credit history to assess your creditworthiness, while mortgage lenders also consider your home’s value and how much equity you have.

  • No tax benefits: Unlike with some home equity loans and lines of credit, you can’t claim a tax deduction on the interest you pay on a personal loan.

Other kitchen remodel financing options

Using your savings is the cheapest way to pay for kitchen updates, but if that's not an option, here are other ways to finance your project.

Credit cards

When it’s best: Credit cards work best for lower-cost updates that you’re able to repay within 12 to 18 months.

You could save on interest if you pay for a small project with a 0% interest credit card. These cards come with a promotional period — typically around 18 months — during which you don’t have to pay interest.

Check the card’s interest rate before committing in case you end up having to make payments beyond the interest-free period.

Home equity loan

When it’s best: If you know the cost of your remodel, prefer getting your money in one lump sum and expect your project to increase the value of your home, then a home equity loan is a good option. It can also be cheaper than a personal loan.

Home equity loans can take a month or longer to fund, but they typically have low closing costs and low interest rates because they're backed by your home and have longer repayment terms.

Home equity line of credit

When it’s best: If the upgrade will increase your home's value, but you're unsure how much it will cost, a HELOC is a flexible financing option.

A HELOC is another low-rate option secured by your home, but instead of borrowing all at once, you borrow and repay only what you need for the project.

Some HELOCs come with an option to make interest-only payments during the draw period (the period when you can borrow from the credit line), which isn’t available with a home equity loan.

Before you choose, learn the pros and cons of home equity loans vs lines of credit.

Cash-out refinance

When it’s best: Cash-out refinancing works best if you plan to stay in your home long enough for the monthly savings to exceed the cost of refinancing.

With a cash-out refinance, you replace your existing mortgage with a new one that includes your remodel costs. Typically, it's a good option when you already have some equity in your home and current mortgage rates are lower than what you’re paying.

Federal programs

The Federal Housing Administration has two programs that can help you finance a qualifying renovation:

Title I Property Improvement Loans are available for home improvements and repairs. If your renovation will cost more than $7,500, the loan has to be secured by a deed of trust or mortgage.

The Energy Efficient Mortgage Program helps finance renovations that make your home more energy-efficient and can help lower your utility bills.

Kitchen remodel financing tips

Budget more than you think you’ll need. A good rule of thumb when budgeting for a kitchen remodel is to set aside 17% to 20% of your home’s market resale value, says David Pekel, CEO of the National Association of the Remodeling Industry.

For example, you might budget from $50,000 to $60,000 for a remodel on a home valued at $300,000.

Typically, it’s better to sit down with a contractor before you start planning the remodel to get an estimate. Most contractors won’t charge you for an hour-long consultation, he says.

New Jersey-based kitchen and bath designer Peter Salerno says unexpected costs like added features or faulty wiring and plumbing are common with kitchen remodels. Pekel recommends saving an extra 10% of what you’ve budgeted for the project to cover unexpected costs.

Account for your home’s value. Especially if you’re fixing up to sell, your goal should be to minimize your spending and maximize your return, says San Francisco-based certified financial planner Larry Ginsburg.

An experienced real estate agent can help you gauge whether your planned updates will increase the house’s value, Pekel says.

Prioritize your updates. Prioritize your budget based on which updates are the most important, Salerno says.

For example, new top-of-the-line appliances — which can be the most expensive part of a remodel — might not be a good use of your budget if your goal is to knock down a wall and make more space.

Last updated on February 19, 2020

Methodology

NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews.

To recap our selections...

NerdWallet's Personal Loans for Kitchen Remodels: Compare Financing Options