Tiny House Financing: Personal Loans for Your Tiny Home

» MORE: Best home improvement loans

Personal loans for tiny homes

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 ^[1].

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.

Use a home improvement loan calculator to determine your potential monthly payment and total interest on a tiny house loan.

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).

» MORE: Compare bank loans

Credit unions

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.

» MORE: Learn about the benefits of credit union personal loans

Loans through a tiny house builder

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:

» MORE: What to know about buying a tiny house

How we chose the best personal loans

Our team of consumer lending experts follows an objective and robust methodology to rate lenders and pick the best.

30+

Lenders reviewed

We review over 35 lenders, including major banks, top credit unions, leading digital platforms, and high interest installment lenders operating across multiple states.

25+

Categories assessed

Each lender is evaluated across five weighted categories and 27 subcategories, covering affordability, eligibility, consumer experience, flexibility, and application process.

60+

Data points analyzed

Our team tracks and reassesses hundreds of data points annually, including APR ranges, fees, credit requirements, and borrower tools, ensuring up to date, accurate comparisons.

Star rating categories

We evaluate more categories than competitors and carefully weigh how each factor impacts your experience.

Affordability

25%

We review lenders’ annual percentage rate offerings and the competitiveness of each lenders’ APR range. We also assess whether a lender charges an origination fee and any opportunity for borrowers to receive a rate discount.

Customer experience

20%

We consider the experience of the consumer trying to manage a personal loan, which means accessibility of customer service representatives, whether borrowers can choose and change their payment due date, and the ability to track their loan on a mobile app.

Underwriting and eligibility

20%

We consider the rigorousness of each lender’s underwriting practices and how widely available their loans are. This category includes whether a lender does a hard credit check before providing a loan, the range of credit profiles they accept and how many states their loans are offered in.

Loan flexibility

20%

We assess how flexible lenders can be with borrowers, including whether they offer multiple loan types, personal loan amounts and repayment term options and whether they offer direct payment to creditors on debt consolidation loans.

Application process

15%

We consider the lender’s full application process, including a borrower’s ability to preview their loan offer via pre-qualification, whether basic loan information such as APR range and repayment terms are available and easy to find online and how quickly a loan can be funded after approval.

5.0

Overall score

NerdWallet’s review process evaluates and rates personal loan products from more than 30 financial technology companies and financial institutions. We collect over 60 data points and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.

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