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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 4.99% APR to 19.63% APR (with AutoPay). SoFi rate ranges are current as of August 11, 2021 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. Lowest rates reserved for the most creditworthy borrowers. 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.

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Lightstream
Check rate

on LightStream's website

LightStream

5.0

NerdWallet rating 
Lightstream

Est. APR

2.49 - 19.99%

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

6.74 - 19.74%

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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Lending Club
Check rate

on LendingClub's website

LendingClub

4.0

NerdWallet rating 
Lending Club

Est. APR

7.04 - 35.89%

Loan Amount

$1,000 - $40,000

Min. Credit Score

600
Check rate

on LendingClub's 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 co-signed and joint loan options.

  • Offers direct payment to creditors with debt consolidation loans.

  • Soft credit check with pre-qualification.

Cons

  • Borrowers can only choose from two repayment term options.

  • Rates are high compared to other fair-credit lenders.

  • Charges an origination fee.

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: 1% to 6%.

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

Disclaimer

A representative example of loan payment terms is as follows: you receive a loan of $13,411 for a term of 36 months, with an interest rate of 12.16% and a 5.30% origination fee of $711, for an APR of 15.99%. In this example, you will receive $12,700 and will make 36 monthly payments of $446.46. Loan amounts range from $1,000 to $40,000 and loan term lengths are 36 months or 60 months. Some amounts and term lengths may be unavailable in certain states. APR ranges from 7.04% to 35.89% and is determined at the time of application. Origination fee ranges from 3% to 6% of the loan amount. Lowest APR is available to borrowers with excellent credit. Advertised rates and fees are valid as of 7/1/21 and are subject to change without notice. Loans are made by LendingClub Bank, N.A., Member FDIC (“LendingClub Bank”), a wholly-owned subsidiary of LendingClub Corporation, NMLS ID 167439. Loans are subject to credit approval and sufficient investor commitment before they can be funded or issued. Certain information that we subsequently obtain as part of the application process (including but not limited to information in your consumer report, your income, the loan amount that your request, the purpose of your loan, and qualifying debt) will be considered and could affect your ability to obtain a loan from us. Loan closing is contingent on accepting all required agreements and disclosures at Lendingclub.com. “LendingClub” is a trademark of LendingClub Bank.

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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 - 24.24%

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 among bank lenders thanks to low rates and flexible terms, but borrowers cannot pre-qualify.

Pros

  • Competitive rates among similar lenders.

  • No origination fee.

  • Joint loan option.

  • Offers wide range of loan amounts and repayment terms.

  • Existing customers can get a .25% rate discount for setting up autopay.

Cons

  • No option to pre-qualify.

  • Charges $39 late fee.

  • Some features only available to existing customers.

Qualifications

  • Must provide Social Security number.

  • Must provide contact details, including a permanent address, email and telephone number.

  • Must provide employment and income (documentation may be required to verify this information) and monthly mortgage or rent payment amount.

Available Term Lengths

1 to 7 years

Fees

  • Origination fee: None.

  • Late fee: $39.

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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