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Best Home Improvement Loans of July 2020

Steve NicastroJuly 2, 2020

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A home improvement loan can help you finance renovations or repairs, with funding up to $100,000. Compare unsecured loans for home improvements.

A home improvement loan is an unsecured personal loan you can use to fund the costs of home repairs, renovations or additions. You can get a personal loan from a bank, online lender or credit union.

Home equity loans or lines of credit are other common choices when you're looking to update your kitchen or repair the roof, as are credit cards. Consider a home improvement loan if you don’t have a lot of equity in your home or would rather not use it as collateral.

Compare multiple personal loans to find one that suits the size of your project and budget. Here are our picks for home improvement loans and what to know before you take out a loan.

Summary of Best Home Improvement Loans of July 2020

LenderNerdWallet Rating Est. APRMin. Credit ScoreLearn More
Lightstream

LightStream

on LightStream's website

Best for Loans for large home renovations

5.49 - 20.49%

660

on LightStream's website

SoFi

SoFi

on SoFi's website

Best for Loans for large home renovations

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 Loans for large home renovations

5.49 - 24.49%

600

See my rates

on NerdWallet's secure website

Marcus by Goldman Sachs

Marcus by Goldman Sachs

on Goldman Sachs's website

Best for Loans for small home renovations

6.99 - 19.99%

690

on Goldman Sachs's website

Lending Club

LendingClub

See my rates

on NerdWallet's secure website

Best for Loans for small home renovations

10.68 - 35.89%

600

See my rates

on NerdWallet's secure website

Our picks for

Loans for large home renovations

LightStream, SoFi and Wells Fargo work for larger renovations, as the lenders have higher loan amounts — up to $100,000.

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 offers no fees and low rates on home improvement loans. Borrowers with excellent credit may qualify for extended terms up to 12 years.

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
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 good-credit consumers, 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 with its personal loans.

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

Our picks for

Loans for small home renovations

With lower starting loan amounts, Marcus and LendingClub are two options for borrowers planning smaller home improvement projects.

Marcus by Goldman Sachs

on Goldman Sachs's website

Marcus by Goldman Sachs

Marcus by Goldman Sachs

Min. Credit Score

690

Est. APR

6.99 - 19.99%

Loan Amount

$3,500 - $40,000

on Goldman Sachs's website


Min. Credit Score

690

Key facts

Marcus loans start at $3,500 and 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

  • Requires good credit.

  • No co-sign option.

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.

  • 660+ 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.
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 is a peer-to-peer lender offering up to $40,000 in personal loans. Loans are available to single and joint borrowers.

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

Details about home improvement loans

A personal loan used for home improvements is like any unsecured personal loan: It’s not guaranteed by your home, the rate you receive depends primarily on your creditworthiness and the rate and payments are usually fixed, which means you can reliably schedule monthly payments into your budget.

  • Higher rates: Since the loan is unsecured, the interest rate may be higher than on a home equity loan or home equity line of credit. Rates from online lenders range from about 6% to 36%. Rates for home equity loans and HELOCs are usually in the single digits.

  • Fast funding: Online applications typically take a few minutes, and funds are available within a day or two at some lenders. Learn how to get a personal loan for a smoother process.

  • 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.

Estimate your home improvement loan rate

Interest rates on personal loans generally range from about 6% to 36%. As with most credit products, the rate you receive depends a lot on your credit score. The better your score, the lower your rate and the less interest you’ll pay over the life of the loan. The interest rate also affects your total monthly payment, as does the term length; a longer term means lower monthly payments, but more interest.

Use our personal loan calculator for home improvements to see estimated rates, total interest costs and payments for your home improvement loan.

Home improvement loan uses

You can use home improvement loans for renovations like a kitchen remodel, or they can help you cover fixes like a roof repair or replacement.

There are few limitations on how you spend the funds from an unsecured loan. You can finance solar panels, a new deck or even a swimming pool with the money from a home improvement loan.

Home improvement loan alternatives

There are lenders that offer home improvement loans for bad credit, but if you don’t qualify or you want to try to get a lower rate, here are alternative options.

Credit unions: Your local credit union may be the best place to get a personal loan, especially if your credit is poor or average. The maximum annual percentage rate at federal credit unions is 18%.

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 look for a “Title I Home Improvement” lender in your state on the HUD website.

Credit cards: If you have excellent credit and a small- to medium-sized home improvement project, there are strategic ways to use a credit card to cover the expenses, including using rewards or a card with a 0% introductory APR. If you qualify, you’ll pay no interest charges for a promotional period, typically 12 to 18 months.

Home equity loans and HELOCs: If you have equity in your home, you may be better off with a low-interest secured loan.

Both options are likely cheaper than personal loans, with longer repayment terms up to 20 years. Keep in mind that you can lose your home if you fail to repay the loan. Learn the difference between the two to decide which fits best with your plans.

Cash-out refinancing: You can refinance your existing mortgage into a higher loan amount and use the difference to pay for your renovation. Consider this option if current mortgage rates are lower than the one you're paying now.

Last updated on July 2, 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 Best Home Improvement Loans of July 2020

Frequently asked questions