NerdWallet LogoNerdWallet Logo
  • Log inJoin
    • Best of

      Best credit cards of 2019Best rewards cardsBest cash back cardsBest travel cardsBest balance transfer cardsBest 0% APR cardsBest student cardsBest cards for bad credit
    • Compare cards

      Compare card offersSide-by-side comparisonsGet a card recommendationRewards comparison tool0% APR savings toolBalance transfer tool
    • Reviews

      Credit card reviewsRewards programsSign-up bonuses
    • Read & learn

      Credit cards 101Pick the best credit cardBoost your approval oddsBalance transfers 101Credit card debt studyRange of credit scoresHow to build creditDebt calculatorCredit Building community
    • Best of

      Best savings accountsBest checking accountsBest bonuses & promotionsBest money market accountsBest prepaid debit cardsBest banks
    • Compare accounts

      Savings accountsChecking accountsCD ratesMoney market accountsSee all interest rates
    • Reviews

      Marcus by Goldman SachsSynchrony BankAlly BankBarclaysDiscover BankSee all bank reviews
    • Read & learn

      How to open a bank accountSavings accounts 101Checking accounts 101CDs 101Overdraft fees 101
    • Best of

      Best brokers for stocksBest brokers for beginnersBest Roth IRA providersBest IRA providersBest robo-advisorsBest for active tradingBest for options trading
    • Reviews

      Ally InvestMerrill EdgeE-TradeTD AmeritradeWealthfrontWealthfront vs. BettermentE-Trade vs. TD Ameritrade
    • Popular tools

      Compare online brokeragesRetirement calculatorRoth IRA calculator401(k) savings calculatorCalculate my net worthCapital gains tax calculatorFederal tax calculator
    • Guides

      How to buy stocksHow to choose a financial advisorOpening a brokerage accountHow much to save for retirementWhat is an IRA?Roth IRA guide401(k) rollover guide
    • Best of

      Best mortgage lenders of 2019Best lenders for first-time buyersBest online lendersBest FHA lendersBest VA lendersBest for low down paymentBest refinance lendersBest low credit lenders
    • Compare

      Mortgage ratesPreapproval lendersCash-out refinance rates30-year fixed ratesRefinance rates15-year fixed rates5/1 ARM ratesFHA mortgage rates
    • Calculators

      Mortgage calculatorAmortization calculatorHow much house can I afford?How much down payment?VA loan calculatorRefinance calculatorCost of living calculatorCalculators
    • Read & learn

      Estimate your home valueFirst-time homebuyer tipsHomebuying: what to expectFHA loansGet the best mortgage rateRefinancing your mortgageVA home loans
    • Personal

      Personal loansBad credit loansDebt consolidation loansConsolidate credit card debtUpstartMarcusOneMain
    • Small business

      Small business loansBad credit business loansSmall business lendersHow to start a businessHow to get a business loanBusiness loan calculatorMerchant cash advance calculatorSBA loans
    • Student

      Refinance student loansPrivate student loansHow to pay for collegeComplete the FAFSA Student loan repayment plansStudent loan calculatorStudent loan refinance calculator
    • Auto

      Best auto loansRefinance auto loansHow to buy a carTotal car cost calculatorLease calculatorCompare new vs used carShould I refinance?
    • Auto

      Free car insurance comparisonBest car insuranceCheapest car insuranceCar insurance reviewsCar insurance discountsBest cheap car insuranceCompare the big 4 car insurersCar insurance estimates
    • Life

      Term life insurance quotesBest life insuranceLife insurance reviewsLife insurance calculatorRates for healthy vs. sickTerm vs. wholeSee all
    • Managing Money

      How to build a budgetBest budgeting & savings toolsBudget calculatorHow to track expensesShort- vs. long-term goalsChoosing a budget systemHow to fix budgeting errorsHow to handle debt
    • Ways to save

      How to save moneyTrick yourself into savingHow to cut the cable cordLower your cable billLower your cell phone billSave on electric billsHow to save on flights
    • Making money

      How to make moneyHow to find fast cashGovernment free moneyMaking money via online surveysReal work-from-home jobs
    • Life events

      How to pay for collegeCareer guideHow much does a wedding cost?Parenting money tipsFinancial guide for movingPlanning a vacationTravel smarter with rewardsAsk the community
    • Travel

      Loyalty programsReward optimizationVacations & trip planningTravel deals
    • Best of
      • Best mortgage lenders of 2019
      • Best lenders for first-time buyers
      • Best online lenders
      • Best FHA lenders
      • Best VA lenders
      • Best for low down payment
      • Best refinance lenders
      • Best low credit lenders
    • Compare
      • Mortgage rates
      • Preapproval lenders
      • Cash-out refinance rates
      • 30-year fixed rates
      • Refinance rates
      • 15-year fixed rates
      • 5/1 ARM rates
      • FHA mortgage rates
    • Calculators
      • Mortgage calculator
      • Amortization calculator
      • How much house can I afford?
      • How much down payment?
      • VA loan calculator
      • Refinance calculator
      • Cost of living calculator
      • Calculators
    • Read & learn
      • Estimate your home value
      • First-time homebuyer tips
      • Homebuying: what to expect
      • FHA loans
      • Get the best mortgage rate
      • Refinancing your mortgage
      • VA home loans
Join or log in
Join

Home Improvement Loan Options

Homeowners looking for ways to pay for a home improvement have a lot of choices, including home equity loans, cash-out refinances or getting a personal loan. We help you identify the financing choice that saves you the most money.

Homeowners looking for ways to pay for a home improvement have a lot of choices. Taking out a home equity loan, doing a cash-out refi or getting a personal loan are just some of the possibilities depending on your personal financial situation. With NerdWallet’s financing calculator, we help you identify the financing choice that saves you the most money.

Help us understand you and your financing needs by answering a few questions. Or make your own decision by reading below.

How’s your credit score?

Not sure? Check your free credit score

We ask you several questions to match you with the lowest interest rate financing possible. We’re asking your credit score because some financing types have minimum credit score requirements. For NW members, we’ve pre-populated your credit score.

Why do we ask for this?

We ask you several questions to match you with the lowest interest rate financing possible. We’re asking your credit score because some financing types have minimum credit score requirements. For NW members, we’ve pre-populated your credit score.

Your Results

We’ll use the answers you give us to show you which home improvement financing solution works best.

Recommended lenders

We’ll use the answers you give us to recommend lenders for your needs

Home improvement financing types

1. Mortgage refinance

If you financed your home a few years ago and your interest rate is higher than current market rates, a mortgage refinance could lower your rate — and your monthly payments. And that could free up cash for your dream renovation.

You might also consider a cash-out refinance to tap some of your home’s equity. Lenders will generally let you borrow enough to pay off your current mortgage and take out more cash, usually up to 80% of your home’s value.

Think carefully before you embark on this type of refinance, though: You’ll be using your home as collateral for a bigger loan, and you’ll be financing short-term costs with long-term debt, which adds interest and other fees to the price of the renovations. In most cases, a cash-out refinance is appropriate only if you’re improving your home in ways that will increase its value.

>> MORE: Refinance your mortgage and increase your home improvement budget

2. Home equity line of credit

A HELOC is another way to borrow against the the value of your home, but unlike a refinance, it doesn’t pay off the original mortgage. Instead, you get a line of credit — usually up to 80% of your home’s value, minus the amount of your home loan.

HELOCs come with a draw period and repayment period. During the draw period, which often lasts about 10 years, you can spend the money in your credit line. Your monthly payments would cover mostly the interest and a little bit of the principal on any outstanding balance. During the repayment period, which typically lasts around 15 years, your monthly payments would probably be higher because they’d include more principal.

>> MORE: Best HELOC lenders

3. Home equity loan

A home equity loan is another way to tap your equity without refinancing. Instead of getting a line of credit, as you would with a HELOC, you’d receive a lump sum of money. A home equity loan could make sense if you don’t want to refinance your first mortgage — if it has a very low interest rate, for example. But the interest rate would probably be higher with a second mortgage like a home equity loan than with a cash-out refinance.

>> MORE: Review the best home equity loan lenders or calculate how much home equity financing you can qualify for

4. Personal loan

Personal loans are an alternative to using your home’s equity for financing and putting your home up as collateral. In fact, you may not have to put up any assets for collateral, but you’ll generally need good or excellent credit to qualify for the best rates.

Interest rates are usually higher with personal loans than with home equity financing. There’s also a shorter time frame to repay the money, about five to seven years. The shorter window could mean your monthly payments are larger than they’d be with other loan options.

If you have good credit but not much equity in your home, or you’d prefer a shorter repayment period, a personal loan could be a good choice.

>> MORE: Best personal loan lenders

5. Credit card

Plastic allows you to make purchases if you don’t have the cash up front, and certain credit cards give rewards for every dollar you spend. But you’ll want to make sure you can pay off your balance over a short period of time, because credit cards generally come with higher interest rates than other types of financing.

>> MORE: Best 0% interest cards

6. Save up and pay cash

It may require time and patience, but saving your money until you’re able to pay outright for a renovation eliminates finance charges. Paying with cash can also make it easier to stay within your budget.

Must reads

Must reads

Check Your Home Value for Free
Find out how much your home is worth. See a breakdown of your home value over time and review your home equity.
See full article
Do Home Improvements Add Value?
Some home improvements projects are more likely to add value than others. Read our take on the best projects.
See full article
Should You DIY or Hire a Pro?
While there’s something rewarding about tackling a job yourself, some projects are better left to experts.
See full article
Determining Your Renovation Budget
Determining a realistic budget can be one of the most daunting aspects of embarking on a home renovation project.
See full article

Other NerdWallet resources

Tools

Mortgage calculators

Choose from over 25 mortgage tools

Calculators

Refinance calculator

Calculate your refinance savings

Calculators

Home equity loan calculator

Calculate how much you can borrow

Credit

Get your free credit score

Get your true budget and find a home with ease.

Best-Of AwardsCredit CardsBankingInvestingMortgagesInsuranceLoansShoppingUtilitiesTaxesUniversities
AboutCompanyPressCareersLeadershipHelpSecurity

NerdWallet Compare, Inc. NMLS ID# 1617539

NMLS Consumer AccessLicenses and Disclosures

Disclaimer: NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions. Pre-qualified offers are not binding. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly.

© 2019 NerdWallet, Inc. All Rights Reserved
Terms of UsePrivacy Policy
  • Text me the mobile app