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5 Kitchen Remodel Loans: Compare Financing Options

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.

Annie MillerberndFeb 19, 2020

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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 Kitchen Remodel Loans: Compare Financing Options

Our picks for

Kitchen remodel loans

SoFi
Check rate

on SoFi's website

SoFi

5.0

NerdWallet rating 
SoFi

Est. APR

4.99-19.63%

Loan Amount

$5,000-$100,000

Min. Credit Score

680
Check rate

on SoFi's website


Min. Credit Score

680

Key facts

SoFi offers online personal loans with consumer-friendly features for good- and excellent-credit borrowers.

Pros

  • No fees.

  • Offers co-sign and joint loan options.

  • Offers .25% rate discount for setting up autopay.

  • Offers unemployment protection.

  • Provides mobile app to manage your loan.

Cons

  • No secured loan option.

Qualifications

  • Must legally be an adult in your state.

  • Must be a U.S. citizen, permanent resident or visa holder.

  • Must be employed, have sufficient income or have an offer of employment to start within the next 90 days.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Fixed rates from 4.74% APR to 19.38% APR include a 0.25% autopay discount and a 0.25% direct deposit discount. SoFi rate ranges are current as of 10/28/21 and are subject to change based on market conditions and borrower eligibility. SoFi Personal Loans are not available to residents of MS. Additional state restrictions may apply. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. Autopay Discount: 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, checking, or other account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings, checking, or SoFi Money account. Autopay is not required to receive a loan from SoFi. Direct Deposit Discount: To qualify for an additional 0.25% APR direct deposit discount you must: (1) set up autopay with SoFi Money within 20 days of the funding of your loan, AND (2) setup payroll direct deposits of at least $1,000/mo to SoFi Money within 35 days of the funding of your loan. If you do not set up autopay with SoFi Money within 20 days of the funding of your loan, AND set up payroll direct deposits to SoFi Money within 35 days of the funding of your loan you will not be qualified for this additional 0.25% direct deposit discount. Once qualified, you will receive this additional 0.25% direct deposit discount during periods in which you have direct deposits of at least $1,000/mo turned on with your SoFi Money account. This additional direct deposit discount will be lost during periods in which you have turned off direct deposits for your SoFi Money account. You are not required to enroll in autopay or direct deposits to receive a loan from SoFi. The Direct Deposit Rate Reduction excludes members from receiving the $100 SoFi Money® direct deposit promotional program. SoFi Money® is a cash management account, which is a brokerage product, offered by SoFi Securities LLC. Member FINRA/SPIC. Neither SoFi nor its affiliates are a bank. SoFi Money Debit Card issued by The Bancorp Bank.

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Lightstream
Check rate

on LightStream's website

LightStream

5.0

NerdWallet rating 
Lightstream

Est. APR

4.49-20.49%

Loan Amount

$5,000-$100,000

Min. Credit Score

660
Check rate

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.

  • Competitive rates among online lenders.

  • Offers .5% rate discount for setting up autopay.

  • Special features including rate beat program and satisfaction guarantee.

Cons

  • No option to pre-qualify on its website.

  • Requires several years of credit history.

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

Qualifications

  • Minimum credit score: 660.

  • Several years of credit history.

  • Multiple account types within your credit history, like credit cards, a car loan or other installment loan and a mortgage.

  • Strong payment history with few or no delinquencies.

  • Investments, retirement savings or other evidence of an ability to save money.

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

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. AutoPay discount of .50% points is only available when selected prior to loan funding. Rates without AutoPay will be .50% points higher. To obtain a loan, you must complete an application on LightStream.com which may affect your credit score. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 6.14% APR with a term of 3 years would result in 36 monthly payments of $304.85. Truist Bank is an Equal Housing Lender. ©2021 Truist Financial Corporation. SunTrust, Truist, LightStream, the LightStream logo, and the SunTrust logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.

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Marcus by Goldman Sachs
Check rate

on Goldman Sachs's website

Marcus by Goldman Sachs

5.0

NerdWallet rating 
Marcus by Goldman Sachs

Est. APR

6.99-19.99%

Loan Amount

$3,500-$40,000

Min. Credit Score

660
Check rate

on Goldman Sachs's website


Min. Credit Score

660

Key facts

Marcus personal loans stand out with zero fees and a wide range of repayment terms.

Pros

  • No fees.

  • Wide variety of repayment term options.

  • Offers .25% rate discount for setting up autopay.

  • Offers direct payment to creditors for debt consolidation loans.


Cons

  • No co-sign, joint or secured loan option.

Qualifications

  • Minimum credit score: 660 FICO.

  • May need to provide proof of income, including recent pay stubs or bank statements.

  • May need to provide Social Security number, Individual Tax ID number or a photo ID.

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. Receive a 0.25% APR reduction when you enroll in AutoPay. This reduction will not be applied if AutoPay is not in effect. When enrolled, a larger portion of your monthly payment will be applied to your principal loan amount and less interest will accrue on your loan, which may result in a smaller final payment. See loan agreement for details.

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Wells Fargo Personal Loan
See my rates

on NerdWallet's secure website

Wells Fargo Personal Loan

4.5

NerdWallet rating 
Wells Fargo Personal Loan

Est. APR

5.74-19.99%

Loan Amount

$3,000-$100,000

Min. Credit Score

None
See my rates

on NerdWallet's secure website


Min. Credit Score

None

Key facts

Wells Fargo personal loans stand out thanks to a wide range of loan amounts and flexible terms, but borrowers can't pre-qualify.

Pros

  • No origination or prepayment fee.

  • Joint loan option.

  • Offers wide range of loan amounts and repayment terms.

  • Rate discount for autopay.

  • Able to fund loans on same or next business day.

Cons

  • No option to pre-qualify.

  • Some features only available to existing customers.

Qualifications

  • Must provide personal and contact information.

  • Must provide employment and income information; documentation may be required to verify this information.

  • Must provide desired term and amount to borrow.

Available Term Lengths

1 to 7 years

Fees

  • Origination fee: None.

  • Late fee: $39.

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Upgrade
Check rate

on Upgrade's website

Upgrade

5.0

NerdWallet rating 
Upgrade

Est. APR

5.94-35.47%

Loan Amount

$1,000-$50,000

Min. Credit Score

560
Check rate

on Upgrade's website


Min. Credit Score

560

Key facts

Upgrade offers personal loans plus credit-building tools; you'll need strong cash flow to qualify.

Pros

  • Allows secured and joint loans.

  • Offers a wide range of repayment terms.

  • Offers a 0.5% rate discount for setting up autopay.

  • Offers significant rate discount for checking account customers.

  • Offers rate discount with direct payment to creditors on debt consolidation loans.

Cons

  • Charges origination fee.

  • No co-signed loan option.

Qualifications

  • Minimum credit score: 560; borrower average is 678.

  • Minimum annual income: None; borrower average is $78,000.

  • Minimum number of accounts on credit history: Two accounts.

  • Maximum debt-to-income ratio: Less than or equal to 75%, including mortgage and calculating in your new personal loan.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: 2.9% to 8%.

Disclaimer

Personal loans made through Upgrade feature APRs of 5.94%-35.47%. All personal loans have a 2.9% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's lending partners. Information on Upgrade's lending partners can be found at https://www.upgrade.com/lending-partners/. Accept your loan offer and your funds will be sent to your bank or designated account within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes the transaction. From the time of approval, funds should be available within four (4) business days. Funds sent directly to pay off your creditors may take up to 2 weeks to clear, depending on the creditor.

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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 review process evaluates and rates personal loan products from more than 30 lenders. 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 our editorial guidelines.

To recap our selections...

NerdWallet's Kitchen Remodel Loans: Compare Financing Options