BEST OF

Best Home Improvement Loans of February 2021

Home improvement loans can help you finance repairs, renovations and additions to your home. Compare offers from multiple lenders to find the best rates and terms.

Annie MillerberndJanuary 20, 2021
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.

Home improvement loans can help you cover anything from a trendy kitchen upgrade to a much-needed roof repair. You can get these types of personal loans from your bank, credit union or an online lender.

A home improvement loan might be the right kind of financing if you don’t have a lot of equity in your home or you don’t want to use your home as collateral for the project. Always compare offers from multiple lenders to find a loan that suits the size of your project and your budget.

Summary of Best Home Improvement Loans of February 2021

Our picks for

Loans for large home renovations

Lightstream

on LightStream's website

LightStream

5.0

NerdWallet rating 
Lightstream

Min. Credit Score

660

Est. APR

4.49 - 20.49%

Loan Amount

$5,000 - $100,000

on LightStream's website

Min. Credit Score

660

Key facts

LightStream offers no fees, low rates and terms up to 12 years on home improvement loans. Borrowers can apply for a joint loan, which may help you get a lower rate or higher loan amount.

Pros

  • No fees.

  • Competitive rates among online lenders.

  • Rate discount for 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.

Qualifications

  • Minimum credit score: 660.

  • Several years of credit history; excellent-credit borrowers have at least five, according to LightStream.

  • 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 are not guaranteed and may vary based on loan purpose, length of loan, loan amount, credit history and payment method (AutoPay or Invoice). 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.
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Upgrade

on Upgrade's website

Upgrade

5.0

NerdWallet rating 
Upgrade

Min. Credit Score

580

Est. APR

6.94 - 35.97%

Loan Amount

$1,000 - $50,000

on Upgrade's website

Min. Credit Score

580

Key facts

Upgrade lets borrowers add a co-signer or co-borrower to improve their chances of qualifying for a lower rate. It also has a mobile app to manage your loan.

Pros

  • Allows secured, co-signed and joint loans.

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

  • Rate discount for autopay.

Cons

  • Charges origination fee.

  • Charges late fee.

Qualifications

  • Minimum credit score: 580.

  • Minimum annual income: None; average borrower income is $87,000.

  • Minimum credit history: 3 years.

  • Minimum number of accounts on credit history: 2.

  • Minimum monthly free cash flow: $800.

  • Maximum debt-to-income ratio: Varies between 55% and 65% including the loan you’re applying for and mortgage payments. To see your post-loan DTI, calculate your monthly payments on a personal loan, and then add them to your debt-to-income calculation.

  • Average loan amount is $10,000.

  • Average repayment term is 40 months.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 2.9% to 8%.

Disclaimer

Personal loans made through Upgrade feature APRs of 6.94%-35.97%. 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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SoFi

on SoFi's website

SoFi

5.0

NerdWallet rating 
SoFi

Min. Credit Score

680

Est. APR

5.99 - 20.69%

Loan Amount

$5,000 - $100,000

on SoFi's website

Min. Credit Score

680

Key facts

SoFi is a strong option for good-credit consumers, offering low rates, no fees and flexible payments. Borrowers can add a co-signer or co-borrower to improve their chances of qualifying.

Pros

  • No fees.

  • Offers co-sign and joint loan options.

  • Rate discount for 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 US 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 5.99% APR to 20.69% APR (with AutoPay). SoFi rate ranges are current as of January 19, 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. 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.
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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

Min. Credit Score

None

Est. APR

5.99 - 24.49%

Loan Amount

$3,000 - $100,000

See my rates

on NerdWallet's secure website

Min. Credit Score

None

Key facts

Wells Fargo customers may be eligible for personal loan rate discounts and large loan amounts. Long terms and the lender's joint loan option help this loan stand out for home improvement projects.

Pros

  • Competitive rates among similar lenders.

  • No origination fee.

  • Offers joint and secured loan options.

  • Offers wide range of loan amounts and repayment terms.

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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Our picks for

Loans for small home renovations

Marcus by Goldman Sachs

on Goldman Sachs's website

Marcus by Goldman Sachs

5.0

NerdWallet rating 
Marcus by Goldman Sachs

Min. Credit Score

660

Est. APR

6.99 - 19.99%

Loan Amount

$3,500 - $40,000

on Goldman Sachs's website

Min. Credit Score

660

Key facts

Marcus loans start at $3,500 and come with low rates, no fees and flexible loan terms.

Pros

  • No fees.

  • Competitive rates among online lenders.

  • Wide variety of repayment term options.

  • Rate discount for autopay.

  • Offers direct payment to creditors for debt consolidation loans.


Cons

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

  • Funding could take up to five days.

Qualifications

  • Minimum credit score: 660.

  • Must be 18 or over, 19 in Alabama and 21 in Mississippi and Puerto Rico.

  • Must have a valid U.S. bank account and Social Security or Individual Tax I.D. Number.

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

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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Discover
See my rates

on NerdWallet's secure website

Discover® Personal Loans

5.0

NerdWallet rating 
Discover

Min. Credit Score

660

Est. APR

6.99 - 24.99%

Loan Amount

$2,500 - $35,000

See my rates

on NerdWallet's secure website

Min. Credit Score

660

Key facts

For good- to excellent-credit borrowers, Discover offers perks like a mobile app to manage your loan and a unique money-back guarantee.

Pros

  • No origination fee.

  • Offers direct payment to creditors.

  • Offers mobile app to manage loan.

  • Able to fund loans within one business day.

  • Wide variety of repayment term options.

Cons

  • Charges late fee.

  • No co-signed, joint or secured loan options.

  • No rate discount for autopay.

Qualifications

  • Minimum credit score: 660; borrower average is 750.

  • Must be a U.S. citizen or permanent resident.

  • Must be at least 18 years old.

Available Term Lengths

3 to 7 years

Fees

  • Origination fee: None.

  • Late fee: $39.

Disclaimer

This is not a commitment to lend from Discover Personal Loans. Your approval for a loan is determined once you apply and is based on your application information and credit history. Your APR will be between 6.99%-24.99% based upon creditworthiness at time of application for loan terms of 36-84 months. For example, if you get approved for a $15,000 loan at 6.99% APR for a term of 72 months, you’ll pay just $256 per month. Our lowest rates are available to consumers with the best credit. Many factors are used to determine your rate, such as your credit history, application information and the term you select. Not all applications will be approved.
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Prosper

on Prosper's website

Prosper

4.5

NerdWallet rating 
Prosper

Min. Credit Score

640

Est. APR

7.95 - 35.99%

Loan Amount

$2,000 - $40,000

on Prosper's website

Min. Credit Score

640

Key facts

Prosper is a peer-to-peer lender that targets borrowers with fair or good credit. The lender boasts flexible payment features and a joint loan option.

Pros

  • Option to change your payment date.

  • Offers joint loan.

  • Offers wide range of loan amounts. 


Cons

  • No rate discount for autopay.

  • Charges origination and late fees.

  • Borrowers can choose from only two repayment term options.

Qualifications

  • Minimum credit score: 640; borrower average is 726.

  • Minimum credit history: 2 years.

  • Minimum income: No minimum income requirement; borrower average is $113,000.

  • Maximum debt-to-income ratio: 50% (excluding mortgage); borrower average is 18% with housing payment.

  • No bankruptcies filed within the past year.

  • At least three open accounts on credit report.

  • Fewer than five credit bureau inquiries in the last six months.

  • Must be at least 18 years old.

  • Must provide social security number and a U.S. bank account.


Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 2.41 to 5%.

  • Late fee: $15 or 5% of unpaid amount (whichever is greater).

  • Insufficient funds fee: $15.

Disclaimer

For example, a three-year $10,000 personal loan would have an interest rate of 11.74% and a 5.00% origination fee for an annual percentage rate (APR) of 15.34% APR. You would receive $9,500 and make 36 scheduled monthly payments of $330.90. A five-year $10,000 personal loan would have an interest rate of 11.99% and a 5.00% origination fee with a 14.27% APR. You would receive $9,500 and make 60 scheduled monthly payments of $222.39. Origination fees vary between 2.41%-5%. Personal loan APRs through Prosper range from 7.95% to 35.99%, with the lowest rates for the most creditworthy borrowers. Eligibility for personal loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility for personal loans is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All personal loans made by WebBank, Member FDIC.
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What is a home improvement loan?

A home improvement loan is an unsecured personal loan that you use to cover the costs of home upgrades or fixes. Lenders provide these loans for up to $100,000 with rates typically between 6% and 36%. Unlike with credit cards or lines of credit, these loans are repaid in monthly installments, typically over a few years.

Because you don’t use your house as collateral for the loan, your rate is based on your credit and income information. If you can’t repay the loan, your credit will take the hit.

Should you get a home improvement loan?

A home improvement loan can make sense if you don’t have enough equity in your home to cover the project or you don’t want to use your home as collateral.

These loans can be tens of thousands of dollars, making them ideal for bigger projects, while a credit card may be ideal for smaller DIY projects.

Here are some things that are unique to personal loans for home improvements:

  • High rates. Since the loan is unsecured, the interest rate may be higher than on a home equity loan or home equity line of credit, which typically have rates in the single digits.

  • Fixed payments. Personal loans have fixed monthly payments, so you can reliably budget for them.

  • Fast funding options. Online applications typically take a few minutes, and funds are available within a day or two at some lenders, while funds from a HELOC or home equity loan can take a few weeks.

  • No tax benefits. You can’t claim a tax deduction on the interest on personal loans as you might be able to do with mortgage interest.

How to compare home improvement loans

Shopping around and pre-qualifying can help you find the loan with the best rate and features. These are a few important features to compare between home improvement loans.

  • Annual percentage rates: APRs represent the entire cost of the loan, including any fees the lender may charge. If you’re a member of a credit union, that may be the best place to start. The maximum APR at federal credit unions is 18%.

  • Loan amount: Some lenders cap amounts at $35,000 or $40,000. If you think your project will cost more than that, look for a lender that offers higher loan amounts.

  • Loan term: A loan with a long repayment term may have low monthly payments, but you’ll pay more interest over the life of that loan than one with a shorter repayment term. You can use a home improvement loan calculator to see estimated payments on loans with different terms.

  • Ability to add a co-signer or co-borrower: Some lenders will let you add a co-signer or co-borrower to your loan application. Adding someone with better credit or higher income to the loan application may help reduce your APR or increase the amount you can borrow.

» MORE: Pre-qualify for a home improvement loan on NerdWallet

Home improvement loan uses

Unsecured loans can cover almost any purchase. How much you’ll need will vary based on your location, home size and how extensive your plans are.

Americans spent an average of $18,216 on room additions and renovations in 2019, according to the most recent available data from the U.S. Census Bureau’s American Housing Survey.

Here are some common projects and how much you could pay for each, based on the most recent cost estimates available.

Project type

Estimated cost

Kitchen remodel

$68,490

Bathroom remodel

$21,377

Deck addition

$14,360

Solar panel installation

$12,920

Roof replacement

$7,000

Swimming pool addition

$5,000

Landscaping

$3,200

Sources: The U.S. Census Bureau's 2019 American Housing Survey, Remodeling Magazine 2020 Cost vs Value Report, HomeAdvisor, Center for Sustainable Energy.

» MORE: How much do popular home improvement projects cost?

What are other types of home improvement financing?

You have a long list of options to finance your project, including a home equity loan or line of credit, cash-out refinancing or an unsecured home improvement loan to pay for your home improvement project.

» MORE: Take our quiz to find the right home improvement financing option

Federal programs

Some government programs can help pay for a home renovation. The Federal Housing Administration has two programs: Title I loans and Energy Efficient Mortgages. You can search for a “Title I Property Improvement” lender in your state on the HUD website.

When it’s best: Consider applying if your project and finances meet the criteria outlined by these programs. They can help make upgrades more affordable.

Home equity loans and HELOCs

HELOCs have variable rates and allow you to borrow as you go and repay only what you borrow. A home equity loan, on the other hand, has a fixed rate and comes to you in a lump sum that you repay over time.

Both options typically have lower monthly payments than personal loans, with repayment terms up to 20 years. These home equity options use your home as collateral, meaning you could lose your house if you fail to repay.

Compare home equity loans and HELOCs to decide which fits best with your plans.

When it’s best: If you have equity in your home, you want a low rate and longer repayment period, and you don’t mind putting your house up as collateral.

Cash-out refinancing

You can refinance your existing mortgage into a higher loan amount and use the difference to pay for your renovation.

When it’s best: Consider this option if current mortgage rates are lower than the one you're paying now.

Credit cards

You can strategically use a credit card to cover the cost of your upgrades. Rewards cards can get you paid as you upgrade, while a card with a 0% introductory APR can cover short-term home renovations.

When it’s best: Use a credit card for projects small enough that you won’t max them out. You should typically aim to pay your full balance every month. You’ll need good or excellent credit (690 or higher) to qualify for a zero-interest or rewards card.

Last updated on January 20, 2021

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 Best Home Improvement Loans of February 2021

Frequently asked questions