Tiny House Financing: Personal Loans for Your Tiny Home
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Tiny House Financing: Personal Loans for Your Tiny Home
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Last updated on August 6, 2025Fact Checked
A tiny house is commonly defined as a home that’s less than 400 square feet — a size too small for a traditional mortgage. Instead, consider a personal loan to finance your tiny house.
This service is free and will not affect your credit score.
LendingClub personal loans are a solid option for good-credit borrowers looking to consolidate debt and build their credit. Read our review of LendingClub
Upgrade personal loans offer multiple rate discounts and direct payment to creditors. A low minimum credit score requirement makes the perks stand out even more. Read our review of Upgrade
Rocket Loans offers fast funding for online personal loans to borrowers with fair and good credit, but it lacks some key features. Read our review of Rocket Loans
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When buying a standard home, you’d typically get a mortgage. If you’re in the market for a tiny house, qualifying for a pint-size mortgage is unlikely.
The mortgage you need for a tiny home may be smaller than a traditional lender’s minimum loan amount, which can start at $50,000. Tiny homes cost from $30,000 to $70,000 on average, according to home services website HomeGuide .
An additional challenge: The lender may require that your tiny home have a foundation on land you already own.
An alternative way to finance a tiny home is by applying for a personal loan from an online lender, bank or credit union.
Lenders use your credit score and income to determine if you’ll be approved for a personal loan and at what rate. Annual percentage rates on personal loans are from 6% to 36%; borrowers with excellent credit scores (720 and above) will qualify for rates at the low end of that range.
Personal loans are unsecured and don’t require collateral, so you won’t lose your tiny house or another asset if you can’t repay the loan (although your credit score will take a hit).
Online lenders
Online lenders offer personal loans that can finance all or part of a tiny house purchase. Loan repayment terms are shorter than mortgages — usually two to seven years — so you may pay off your tiny home faster, but monthly payments can be high.
Banks
Large national banks don’t usually advertise tiny house loans, but you may still be able to get one, especially if you bank locally and have a good relationship with your bank.
Bank loans have similar rates to online lenders, but some offer discounts or lower rates to existing customers. Banks prefer borrowers with good or excellent credit (FICO score of 690 or higher).
Credit unions can be a good source for an unsecured tiny house loan, and building a relationship with a credit union can increase your chances of approval.
Credit unions are not-for-profit organizations that serve members who live or work in a particular area. You have to meet the requirements and pay a membership fee to join before you can apply for a loan.
Lenders can partner with a builder to finance a tiny home. These loans are either unsecured (based primarily on your credit score) or secured by the tiny house.
The potential benefits include low starting rates (typically under 10%) and longer loan terms (10 to 20 years or longer) than personal loans.
However, this option may require a down payment of 20% or more of the purchase price. If the loan is secured, you can lose the tiny house if you can’t make payments.
Tiny homes on wheels may qualify for RV loans, but only if the vehicle is certified as an RV by the Recreational Vehicle Industry Association.
Home equity loans
Home equity loans and lines of credit are available if you own a home and want to add a tiny house to the land as an accessory dwelling unit or buy a mobile tiny home.
Home equity loans usually have low rates and long repayment terms (typically more than 10 years), which allow lower monthly payments. But you’ll need equity to qualify, and you can lose your primary home if you miss payments.
Tiny house financial risks
The benefits of a tiny house could include lower housing expenses and less upkeep. But factor these costs into your budget:
Purchasing land or leasing a lot.
Parking fees at campgrounds and fuel if you take your tiny home on the road.
RV insurance, construction insurance or homeowner’s insurance, property taxes and permit fees.
