A home improvement loan can help you pay for repairs, renovations and additions to your home. Compare offers from multiple lenders to find the best rates and terms.
Banks, online lenders and credit unions all offer home improvement loans. For most borrowers, they're the fastest way to get cash for your project. This kind of personal loan is among a handful of options for financing home renovations. Consider a home improvement loan if you don’t have a lot of equity in your home or don’t want to use it as collateral. Always compare offers from multiple lenders to find a loan that suits the size of your project and your budget.
A home improvement loan can help you pay for repairs, renovations and additions to your home. Compare offers from multiple lenders to find the best rates and terms.
Banks, online lenders and credit unions all offer home improvement loans. For most borrowers, they're the fastest way to get cash for your project. This kind of personal loan is among a handful of options for financing home renovations. Consider a home improvement loan if you don’t have a lot of equity in your home or don’t want to use it as collateral. Always compare offers from multiple lenders to find a loan that suits the size of your project and your budget.
Lender | NerdWallet rating | Est. APR | Loan amount | Min. credit score | Learn more |
---|---|---|---|---|---|
SoFi Personal Loan Get rate on SoFi's website | Excellent for Personal loans for good to excellent credit | 8.99- | $5,000- | None | Get rate on SoFi's website |
Upstart Get rate on Upstart's website | Excellent for Personal loans for bad, fair, or good credit + Personal loans for fast funding | 7.80- | $1,000- | None | Get rate on Upstart's website |
LightStream Get rate on LightStream's website | Excellent for Personal loans for good to excellent credit | 7.99- | $5,000- | 660 | Get rate on LightStream's website |
Upgrade Get rate on Upgrade's website | Excellent for Personal loans for fair credit + Co-signed and joint loans | 8.49- | $1,000- | 560 | Get rate on Upgrade's website |
Excellent for
Personal loans for good to excellent credit
Excellent for
Personal loans for bad, fair, or good credit + Personal loans for fast funding
A home improvement loan is an unsecured personal loan that you use to cover the costs of upgrades or repairs. Lenders provide these loans for up to $100,000. A home improvement loan comes in a lump sum, and you repay it in monthly installments, usually over one to 12 years.
Because you don’t use the house as collateral for this type of loan, the interest rate is based on information like your credit and income. If you can’t repay a home improvement loan, your credit will take a hit.
A home improvement loan makes sense if you don’t have enough equity in the home or don’t want to use it as collateral. Equity is the difference between the home’s value and the amount owed on your mortgage.
If you have equity, you could get a lower monthly payment on a home equity loan or line of credit, but the lender may require an appraisal before approval.
Home equity loans come in lump sums and have fixed interest rates, so monthly payments never change. You repay this loan in monthly installments on a term of up to 15 years.
Compare to personal loans: Home equity loans work similarly to personal loans, but they often have lower rates and longer repayment terms.
A HELOC is an open credit line that you draw on as needed during a renovation and only pay interest on what you borrow. This is a variable-rate option that works best if you don’t mind a fluctuating monthly payment and need more borrowing flexibility.
Compare to personal loans: A HELOC lets you borrow at any time over a period of about 10 years, which can be ideal for long-term projects or unexpected expenses. A personal loan offers a one-time cash influx.
» MORE: NerdWallet’s best HELOC lenders
Here are the pros and cons of using personal loans for home improvement projects.
Payments are fixed. Personal loans have fixed monthly payments, so you can reliably budget for them.
Funding is fast. Online applications typically take a few minutes, and funds are available within a day or two at some lenders, while funds from a HELOC or home equity loan can take a few weeks.
No collateral required. Unlike an auto or home loan, personal loans don’t require collateral, so the lender can’t take your possessions if you don’t make the payments.
They can have high rates. Since the loan is unsecured, the interest rate may be higher than on a home equity loan or home equity line of credit, which typically have rates in the single digits.
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.
Shopping around and pre-qualifying can help you find the loan with the best rate and features. These are a few important features to compare among home improvement loans:
Annual percentage rates: APRs represent the entire cost of the loan, including any fees the lender may charge. If you’re a member of a credit union, that may be the best place to start. The maximum APR at federal credit unions is 18%.
Loan amount: Some lenders cap amounts at $35,000 or $40,000. If you think your project will cost more than that, look for a lender that offers higher loan amounts.
Loan term: A loan with a long repayment term may have low monthly payments, but you’ll pay more interest over the life of that loan than one with a shorter repayment term. You can use a home improvement loan calculator to see estimated payments on loans with different terms.
Ability to add a co-signer or co-borrower: Some lenders will let you add a co-signer or co-borrower to your loan application. Adding someone with better credit or higher income to the loan application may help reduce your APR or increase the amount you can borrow.
Current home improvement loan rates are between 4.49% and 35.99%. Lenders decide your rate on a home improvement loan primarily by using your credit score, credit history and debt-to-income ratio.
Here's what personal loan rates look like, on average:
Borrower credit rating | Score range | Estimated APR |
Excellent | 720-850. | 12.64% |
Good | 690-719. | 14.84% |
Fair | 630-689. | 18.69%. |
Bad | 300-629. | 21.74%. |
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified through NerdWallet from March 1, 2024, through March 31, 2024. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below 500 — are unlikely to qualify. Information in this table applies only to lenders with maximum APRs below 36%.
Unsecured loans can cover almost any purchase. How much you’ll need will vary based on your location, home size and how extensive your plans are.
Here are some common projects and how much you could pay for each, based on the most recent cost estimates available.
Project type | Estimated cost |
---|---|
$77,939. | |
$24,606. | |
$17,051. | |
$22,022. | |
$29,136. | |
$55,000. | |
$3,503. | |
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 search for a “Title I Property Improvement” lender in your state on the HUD website.
When it’s best: Consider applying if your project and finances meet the criteria outlined by these programs. They can help make upgrades more affordable.
You can refinance your existing mortgage into a higher loan amount and use the difference to pay for your renovation.
When it’s best: Consider this option if current mortgage rates are lower than the one you're paying now.
You can strategically use a credit card to cover the cost of your upgrades. Rewards cards can get you paid as you upgrade, while a card with a 0% introductory APR can cover short-term home renovations.
When it’s best: Use a credit card for projects small enough that you won’t max it out. You should typically aim to pay your full balance every month. You’ll need good or excellent credit (690 or higher) to qualify for a zero-interest or rewards card.
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