If you know how much your home improvement project will cost — and the amount of the home improvement loan you need, your next questions might be: What will the monthly loan payments be? And how much interest will I pay?
Use this personal loan calculator to estimate different results based on loan term and interest rate.
Understanding your home improvement loan results
Monthly payment: What you can expect to pay each month, based on the loan amount, repayment term and your interest rate. A longer term can lower your monthly payments, but it will also increase the total interest.
Amount financed: The amount of money you receive when the loan closes, minus any origination fee. Borrowers with excellent credit may be able to secure a higher loan amount.
Estimated total interest: The estimated total amount of all interest payments you’ll make on the loan. The longer your repayment term, the more interest you can expect to pay.
Financing your home improvement project
Personal loans are one way to finance home improvements. If you choose an online lender, the application-to-approval process can be quick — some lenders fund loans the same day you apply. You’ll need good to excellent credit to qualify for the lowest rates.
A shorter time frame to repay (one to 12 years) compared to home equity financing (typically up to 20 years) means your monthly payments may be larger. Keep this in mind when estimating your home improvement project costs and working loan payments into your budget.
Here are some home improvement financing alternatives.
Home equity loans
Interest rates on home equity loans are typically lower than personal loans since your home is used as collateral. You can typically borrow between 80% to 85% of your home’s value, minus what’s owed on mortgages, and make payments over five to 20 years.
A home equity loan may work if you have at least 20% equity in your home and if you need all the money at once to cover your project. Like a personal loan, it provides money to your bank account at closing.
» MORE: How a home equity loan works
Home equity lines of credit
A home equity line of credit, or HELOC, lets you tap into your home’s equity when you need it. A HELOC may be an option if you’re unsure how much your home improvement project will cost, or if you plan to pay for it in stages.
You can typically get a line of credit worth up to 85% of your home’s value, minus what’s owed on mortgages.
» MORE: Understanding how HELOCs work
A cash-out refinance may work if you have equity in your home and you can lock in a lower rate on a new mortgage. The new home loan is for a larger amount than the existing one, and you net the difference in cash.
» MORE: Cash-out refinance pros and cons
0% introductory APR credit card
A 0% introductory APR credit card, which waives interest charges for a period of about 12 to 18 months, may be a low-cost way to fund smaller home improvements, but only if you know you can pay off the card’s balance in full before the introductory offer expires.
How to pre-qualify for a personal loan
Most online lenders let you pre-qualify to see your estimated interest rates and potential loan terms, without affecting your credit score.
NerdWallet recommends comparing loans to find the best rate for you. Click the button below to fill out a pre-qualification form and receive personalized rates from multiple lenders that partner with us.
Other loan calculators
Personal loan calculator: See estimated interest rates and payments for a personal loan, based on your credit score range.
Home equity loan calculator: Determine whether you’re eligible for a home equity loan and how much you may be able to borrow, and get matched with lenders.
HELOC calculator: Estimate how much you may be able to borrow from a HELOC based on your home equity, and explore HELOC lenders.