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Home Improvement Loans: Best for February 2019

Jan. 31, 2019
Loans, Personal Loans
Mortgage Rates Today, Jan. 9: Little to No Change; FHA Cuts Insurance Premiums
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Whether you’re remodeling your kitchen or replacing your roof, you have many options to pay for home improvements, including a home equity loan and credit cards. But if you don’t have a lot of equity in your home or you would rather not rack up credit card debt, consider a home improvement loan.

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.

Here’s where to find home improvement loans and what to know before you take out a loan.

Loans for small home renovations: Marcus, Wells Fargo

With lower starting loan amounts, Marcus and Wells Fargo are two options for borrowers planning smaller home improvement projects. Wells Fargo offers loan terms from one to five years compared with three to six years at Marcus.

5.0 NerdWallet rating

• APR: 5.99% - 28.99%.

• Loan amount: $3,500 - $40,000.

• Loan terms: 3 to 6 years.

• Minimum credit score: 660.

• Time to funding: Usually 2 days.

• Fees: None.

Read our review.

Check rate Click to pre-qualify on NerdWallet.
Wells Fargo logo
4.0 NerdWallet rating

•APR: 7.49% - 24.49%

•Loan amount: $3,000 to $100,000

•Loan terms: 1 to 5 years

•Minimum credit score: Not provided, but generally 660 or higher

•Time to funding: Typically same day

•Fees: No origination fee, $39 late fee and returned payment fee

Read our review

Compare Rates Click to compare estimated rates on NerdWallet.

Loans for large home renovations: Earnest, LightStream, SoFi

Earnest, LightStream and SoFi work better for larger renovations, as the lenders have higher loan amounts — up to $100,000 with LightStream and SoFi. Rates, terms and minimum qualifications vary by lender.

4.5 NerdWallet rating

•APR: 6.99% - 18.24%

•Loan amount: $5,000 - $75,000

•Loan terms: 3 to 5 years

•Minimum credit score: None

•Time to funding: Up to a week

•Fees: No origination fees, late fees or prepayment fees

Read our review

Check Rate Click to pre-qualify on NerdWallet.
5.0 NerdWallet rating

• APR: 3.34% - 16.99% (with autopay).

• Loan amount: $5,000 - $100,000.

• Loan terms: 2 to 7 years.

• Minimum credit score: 660.

• Time to funding: As soon as the same day.

• Fees: None.

Read our review.

Check rate Click to pre-qualify on NerdWallet.

 

5.0 NerdWallet rating

• APR: 6.54% - 16.24% (with autopay)

• Loan amount: $5,000 - $100,000.

• Loan terms: 2 to 7 years.

• Minimum credit score: 680.

• Time to funding: Typically 7 days.

• Fees: No origination fees, late fees or overdraft fees.

Read our review.

Check rate Click to pre-qualify on NerdWallet.
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» MORE: NerdWallet’s picks for best personal loans

Home improvement loans: Summary of options

LenderTypical APR rangeLoan amountsGet started
Earnest
4.5 NerdWallet rating
6.99% - 18.24%$5,000 - $75,000
at Earnest
LightStream
5.0 NerdWallet rating
3.34% - 16.99% (with autopay)$5,000 - $100,000
at LightStream
Marcus
5.0 NerdWallet rating

5.99% - 28.99%$3,500 - $40,000
at Marcus
SoFi
5.0 NerdWallet rating
6.54% - 16.24% (with autopay)$5,000 - $100,000
at SoFi
Wells Fargo
4.0 NerdWallet rating
7.49% - 24.49%$3,000 - $100,000
on NerdWallet
Click “Check Rate” to pre-qualify on NerdWallet and receive personalized rates from multiple lenders.

How much would your loan cost?

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

Details about home improvement loans

  • Loan flexibility: You can use a personal loan for any purpose, whether it’s for a major home repair, a kitchen remodel or a smaller project. You control how you use the funds.
  • 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 4% to 36%. Current 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.

» MORE: See estimated rates for personal loans

Home improvement loan alternatives

If you don’t qualify for an online personal loan or you want to try to get a lower rate, here are some 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, you can apply for a 0% interest credit card to cover the expenses. If you qualify, you’ll pay no interest charges for a promotional period, typically 12 to 18 months.

» MORE: Should you put your home renovation on a credit card?

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.

» MORE: Home equity loan vs. line of credit

Cash-out refinancing: You can refinance your existing mortgage into a higher loan amount and use the difference to pay for your renovation. Rates vary by lender, loan amount and the equity in your home.

» MORE: Compare home improvement financing options

Recap: Personal loans for home improvement

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