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Best Home Improvement Loans May 2024

A home improvement loan is a type of loan specifically created to help you finance renovations, repairs, or other additions to your home. Compare offers from multiple lenders to find the best rates and terms available to help you achieve your dream home.

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Key Facts

  • Free-to-use marketplace with a choice of vetted lending partners.
  • Borrowers are in control and can compare competitive loan options.
  • No prepayment fees and origination fees as low as 0%
  • Max Loan Amount: $100K

Pros

pros iconGreat for Comparing Lenders

pros icon Fast and Easy

pros iconSecure 256-bit encryption

Cons

cons iconFees Vary

cons iconOther Variable Info

cons iconTerms are Limited

Personal Loans Rate and Terms Disclosure: Rates for personal loans provided by lenders on the Credible platform range between 6.99% – 35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 3, 2022, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties..

Prequalified rates are based on the information you provide and a soft credit inquiry. Receiving prequalified rates does not guarantee that the Lender will extend you an offer of credit. You are not yet approved for a loan or a specific rate. All credit decisions, including loan approval, if any, are determined by Lenders, in their sole discretion. Lenders will conduct a hard credit pull when you submit your application. Hard credit pulls will have an impact on your credit score. Lowest rate advertised is not available for all loan sizes, types, or purposes, and assumes a very well qualified borrower with an excellent credit profile. Loan Example: A $10,000 loan with a 5-year term at 13% Annual Percentage Rate (APR) would be repayable in 60 monthly installments of $228 each. The actual payment amount and year-end balance will vary based on the APR, loan amount, and term selected. In this case the total amount expected to pay by the borrower will be $13,680.

Bonus disclosure:
“All bonus payments are by gift card.”

*Not all available financial products and offers from all financial institutions have been reviewed by this website

  • $600-$100K Loan Amount
  • 550 Min Credit
  • 6.99-35.99% APR
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Key Facts

  • Competitive rates available for good credit scores and income source
  • Access to financial advisors, private networking events, & unemployment protection
  • Flexible terms & payment options with no fees whatsoever
  • Max Loan Amount: $100K

Pros

pros iconPersonal loan application process is easy and only takes a few minutes to complete

pros iconSoft credit check that doesn’t affect your credit score and gives you personalized rates

pros iconFixed and variable rate loans available ranging from $5,000 to $100,000

pros iconNo late or origination fees required

pros iconExcellent customer support team

pros iconOnline autopay comes with a discount on interest

pros iconExclusive benefits for members (ex. networking events and access to financial advisors)

pros iconUnemployment Protection feature comes with a temporary payment pause (up to 12 months)

pros iconNo prepayment penalties

Cons

cons iconMay take up to 4 days to receive funds after approval (longer than other online lenders)

cons iconHigh eligibility requirements (ex. good credit and sufficient income)

“SoFi” is a registered trademark of Social Finance, Inc. SoFi is not affiliated with colleges and universities listed on SoFi.com. Colleges and universities listed on SoFi.com do not endorse, promote or recommend SoFi loan products.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status and and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, years of professional experience, income, and a variety of other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Financial Protection and Innovation under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp. or an affiliate, NMLS # 1121636. (www.nmlsconsumeraccess.org)

Loan Example: A $10,000 loan with a 5-year term at 13% Annual Percentage Rate (APR) would be repayable in 60 monthly installments of $228 each. The actual payment amount and year-end balance will vary based on the APR, loan amount, and term selected. In this case the total amount expected to pay by the borrower will be $13,680

✝︎ To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

©2022 Social Finance, Inc. All rights reserved.”

Fixed rates from 3.99% APR to 9.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 01/16/24 and are subject to change without notice. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors.Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-6%, which will be deducted from any loan proceeds you receive.Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.

  • $5K-$100K Loan Amount
  • 680 Min Credit
  • 8.99-29.99% APR
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Key Facts

  • Useful mobile app to manage your loan
  • Accepts co-signer and joint applications
  • Wide range of term lengths and amounts

Pros

pros iconFast funding time

pros iconGreat reputation

pros iconLow-fee loans

pros iconWide range of term lengths

Cons

cons iconYou need to be a PenFed Credit Union member to get a loan

cons iconDoesn’t disclose all eligibility requirements

This website is an informative comparison site that aims to offer its users find helpful information regarding the products and offers that will suit their needs. We are able to maintain a free, high-quality service by receiving advertising fees from the brands and service providers we review on this website (though we may also assess brands we are not engaged with).

These advertising fees, combined with our criteria and methodology, such as the conversion rates, our team of reviewers’ findings and subjective experience, and product popularity, impact the placement and position of the brands within the comparison table. In the event that we assign ratings or scoring, they are based on the standing in the comparison table or according to the other formula in the event detailed explicitly by us. See our How we Rate page and Terms of Use for information.

The reviews, ratings, and scoring are provided “as is” without guarantees or warranties regarding the information contained on our website, which shall not be considered as endorsement. We do our best to keep the information up-to-date. However, an offer’s terms might change at any time. We do not compare or include all service providers, brands, and offers available in the market. Loan Payment Example: A $35,000 personal loan financed at 4.99% APR would amount to 60 monthly payments of approximately $676.49 each.

  • $600-$50K Loan Amount
  • 690 Min Credit
  • 8.49-17.99% APR
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Key Facts

  • Discounts for Upgrade account owners
  • No prepayment fees
  • Fast funding in 1-4 days

Pros

pros iconOffers a small minimum loan amount

pros iconDeals with credit scores of at least 580

pros iconNo early prepayment fee

pros iconQuick time to funding

pros iconSolid mobile app to manage loans

Cons

cons iconCharges origination fee

cons iconLate fees in place

Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 8.49%-35.99%. All personal loans have a 1.85% to 9.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.59% APR (which includes a 13.94% yearly interest rate and a 1.85% to 9.99% origination fee), you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the life of the loan, your payments would total $12,293.46. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade’s bank partners. Information on Upgrade’s lending partners can be found at https://www.upgrade.com/lending-partners/.

Fast Funding Disclosure: *Accept your loan offer and your funds will be sent to your bank or designated account within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes the transaction. From the time of approval, funds sent directly to you should be available within one (1) business day. Funds sent directly to pay off your creditors may take up to 2 weeks to clear, depending on the creditor.

  • $1K-$50K Loan Amount
  • 580 Min Credit
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Key Facts

  • Wide range of loan term lengths.
  • No prepayment penalties.
  • Enjoy additional services Axos offer.

Pros

pros iconNo prepayment penalties

pros icon1-year loan terms available

pros iconFast, 2-day funding

pros iconWide range of loan terms

Cons

cons iconHigh credit score requirements

cons iconOrigination fee

cons iconShorter loan terms

Axos Bank® offers bank products and services. All deposit accounts through Axos Bank brands are FDIC insured through Axos Bank. All deposit accounts of the same ownership and vesting held at Axos Bank are combined and insured under the same FDIC Certificate 35546. All deposit accounts through Axos Bank brands are not separately insured by the FDIC from other deposit accounts held with the same ownership and vesting at Axos Bank. For more information, read our FDIC Notice. Axos Bank NMLS# 524995. For example, if you get approved for a $15,000 loan at 6.99% APR for a term of 72 months, you’ll pay just $256 per month for a total amount of $18,432.

 

  • $5K-$50K Loan Amount
  • 690 Min Credit
Powered by Credible
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Key Facts

  • Good credit gets low rates and zero fees
  • Fast and easy online process
  • $100 Loan Experience Guarantee¹
  • Max Loan Amount: $100K
  • Powered by Credible

Pros

pros iconGet a loan for practically anything

pros iconAutopay discount available

pros iconDedicated app to manage your loan

pros iconLightStream doesn’t charge any fees

Cons

cons iconPersonal loan up to $100K

cons iconRequires steady income

cons icon1-3 Days till funding

LightStream is a part of Truist Bank. While most correspondence will come from LightStream, you might notice the name Truist on certain communications from us. We continue to serve customers across all 50 states, and you do not need to be an existing customer to qualify for a LightStream loan.

Your loan terms, including APR, may differ based on loan purpose, amount, term length, and credit profile. The lowest rates require excellent credit. At least 22% of approved applicants applying for the lowest rate qualified for the lowest rate available based on data from 07/01/2022 to 09/30/2022.

Rate is quoted with an AutoPay discount. AutoPay discount is only available before loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66.

  • $5K-$100K Loan Amount
  • 660 Min Credit
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Key Facts

  • Flexible repayment options
  • Great for customers with bad credit score
  • Safe and secure

Pros

pros iconEasy, fast application process

pros iconFunds are disbursed quickly

pros iconBuilds personal credit

Cons

cons iconHigh fees and interest charges

cons iconNo co-signed, joint, or secured loan option

cons iconNo rate discount for automatic payments

Loan Example: A $10,000 loan with a 5-year term at 13% Annual Percentage Rate (APR) would be repayable in 60 monthly installments of $228 each. The actual payment amount and year-end balance will vary based on the APR, loan amount, and term selected. In this case the total amount expected to pay by the borrower will be $13,680

  • $2K-$35K Loan Amount
  • 580 Min Credit
  • 9.95-35.99% APR

Best Home Improvement Lenders

Credible

Get Personalized Prequalified Rates

550

Min Credit Score

6.99-35.99%

APR. Fixed Rate

6.99-35.99%

APR. Variable Rate

$600-$100K

Loan Amount

1-7 years

Repayment terms

Yes

Soft Credit Pull

Marketplace

Lender Type

Yes

Other Fees

Varies

Origination Fee

Varies

Prepayment Fee

Within 5 working days

Funding Time

Pros & Cons

drop-down-btn
  • con-icon Great for Comparing Lenders
  • con-icon Fast and Easy
  • con-icon Secure 256-bit encryption
  • con-icon Fees Vary
  • con-icon Other Variable Info
  • con-icon Terms are Limited

Loan Purpose

drop-down-btn
  • Credit Card Refinance
  • Debt Consolidation
  • Home Improvement
  • Medical Expenses
  • Relocation
  • Vacation
  • Wedding

Loan Type

drop-down-btn
  • Unsecured Personal Loans
  • Fixed-Rate Personal Loans
  • Variable-Rate Personal Loans
  • Co-singer / Joint loans
sofi logo
SoFi

Low Rates. No Fees are Required.

680

Min Credit Score

8.99-29.99%

APR. Fixed Rate

8.99-29.99%

APR. Variable Rate

$5K-$100K

Loan Amount

24 to 84 months

Repayment terms

Yes

Soft Credit Pull

Direct

Lender Type

None

Other Fees

None

Origination Fee

None

Prepayment Fee

Same-day funding if approved before 7:00 PM ET days

Funding Time

Pros & Cons

drop-down-btn
  • con-icon Personal loan application process is easy and only takes a few minutes to complete
  • con-icon Soft credit check that doesn’t affect your credit score and gives you personalized rates
  • con-icon Fixed and variable rate loans available ranging from $5,000 to $100,000
  • con-icon No late or origination fees required
  • con-icon Excellent customer support team
  • con-icon Online autopay comes with a discount on interest
  • con-icon Exclusive benefits for members (ex. networking events and access to financial advisors)
  • con-icon Unemployment Protection feature comes with a temporary payment pause (up to 12 months)
  • con-icon No prepayment penalties
  • con-icon May take up to 4 days to receive funds after approval (longer than other online lenders)
  • con-icon High eligibility requirements (ex. good credit and sufficient income)

Loan Purpose

drop-down-btn
  • Credit Card Refinance
  • Debt Consolidation
  • Home Improvement
  • Major Purchase
  • Medical Expenses
  • Relocation
  • Vacation
  • Wedding

Loan Type

drop-down-btn
  • Unsecured Personal Loans

690

Min Credit Score

8.49-17.99%

APR. Fixed Rate

8.49-17.99%

APR. Variable Rate

$600-$50K

Loan Amount

1 to 5 years

Repayment terms

Yes

Soft Credit Pull

Direct

Lender Type

Yes

Other Fees

None

Origination Fee

None

Prepayment Fee

1-2 days

Funding Time

Pros & Cons

drop-down-btn
  • con-icon Fast funding time
  • con-icon Great reputation
  • con-icon Low-fee loans
  • con-icon Wide range of term lengths
  • con-icon You need to be a PenFed Credit Union member to get a loan
  • con-icon Doesn’t disclose all eligibility requirements

Loan Purpose

drop-down-btn
  • Debt Consolidation
  • Home Improvement
  • Medical Expenses
  • Other

Loan Type

drop-down-btn
  • Unsecured Personal Loans

What Is A Renovation Loan

A renovation loan, also known as a home improvement loan, is a type of financing specifically designed for funding the renovation or improvement of a home. This loan can cover a wide range of home upgrades, from basic repairs to major remodeling projects. Here are some key aspects of renovation loans:

  1. Purpose: Renovation loans are used for home improvements such as kitchen remodels, bathroom updates, extensions, landscaping, or even installing new systems like heating or plumbing.
  2. Types of Renovation Loans:
    1. Personal Loans: Unsecured loans that can be used for home improvements. They usually have higher interest rates but don’t require collateral.
    2. Home Equity Loans: Secured loans that use your home’s equity as collateral. They often have lower interest rates but come with the risk of losing your home if you default.
    3. Home Equity Line of Credit (HELOC): Similar to home equity loans but works like a credit card with a limit based on your home’s equity.
    4. FHA 203(k) Loans: Government-backed loans that allow you to finance the purchase of a home and its renovations with a single loan.
    5. Cash-Out Refinance: This involves refinancing your existing mortgage for more than you owe and using the difference for home improvements.
  3. Loan Terms: The terms, including interest rates and repayment periods, can vary widely depending on the type of loan, the lender, your credit score, and the amount of equity you have in your home.
  4. Benefits: The main benefit is the ability to finance home improvements, which can increase the value of your home and enhance your living space. Some renovation loans also offer tax benefits.
  5. Considerations: It’s important to consider the total cost of the loan, including interest and fees. Additionally, for secured loans, there’s the risk of foreclosure if you can’t make the payments.
  6. Application Process: Typically involves a credit check, and you may need to provide details about your renovation project, including estimates for the work to be done.
  7. Disbursement of Funds: Depending on the loan type, funds may be disbursed in a lump sum or paid directly to contractors as the work progresses.

Loan Coverage For Renovations:

Home improvement loans can cover many projects to enhance, repair, or expand your home. Here's a list of common home projects that are typically covered by these loans:

  • Kitchen Remodeling: Upgrading countertops, cabinets, appliances, flooring, and lighting.
  • Bathroom Renovation: Installing new fixtures, tiles, showers, and baths.
  • Room Additions: Add or expand new rooms, like a sunroom or an extra bedroom.
  • Roof Repairs or Replacement: Fixing or replacing old or damaged roofs.
  • Basement Finishing: Converting an unfinished basement into a livable space.
  • Plumbing and Electrical Upgrades: Modernizing old plumbing or electrical systems.
  • Window Replacement: Installing new, energy-efficient windows.
  • Landscaping: Improving outdoor spaces with new lawns, gardens, decks, patios, or fences.
  • HVAC Systems: Installing or upgrading heating, ventilation, and air conditioning systems.
  • Energy-Efficient Upgrades: Adding solar panels, insulation, or energy-efficient lighting.
  • Painting and Wallpapering: Interior and exterior painting or wallpapering.
  • Flooring: Installing new flooring such as hardwood, laminate, or tile.
  • Accessibility Improvements: Adding features to enhance accessibility, like wheelchair ramps or stairlifts.
  • Home Security Systems: Installing or upgrading home security systems.
  • Swimming Pool Installation: Building a new swimming pool or renovating an existing one.
  • Disaster Recovery: Repairing damage from natural disasters like floods or storms.
  • Home Automation: Integrating smart home technology for lighting, temperature control, and home entertainment.
  • Exterior Siding: Repairing or replacing exterior siding.
  • Garage Renovations: Converting or enhancing garage spaces.
  • Attic Conversion: Turning an attic into a usable living space.

Make Improvements to Your Home With Flexible Financing

To get a home improvement loan, you will need to provide the lender with some information, such as your income, your credit score, and the purpose of the loan. The lender will then decide whether to approve your loan and what interest rate to offer you. Once your loan is approved, you will receive a lump sum. You will then use the money to pay for your home improvement project and start making monthly payments to the lender once the loan funds are disbursed. The terms of your home improvement loan will vary depending on the lender and the type of loan you choose. However, most home improvement loans have 5 to 15 years of repayment.

Home Improvement Loan APRs

APRs on home improvement can range from 4.60% up to 35.99%. The interest rate depends on many factors, and different home improvement loan providers charge different rates. Bear in mind that the following items will be key in determining what APR you are charged:

  • Credit history – high credit scores mean lower APRs
  • Income history – higher income means lower APRs
  • The amount borrowed – a lower amount means lower APRs

Home improvement loans tend to be short to medium-term in length. A different loan type may be more suitable if you want to borrow a large amount of money. The average kitchen and bathroom remodel costs about $20,000, so it’s best to consider all your options before settling on a home improvement loan.

Home Improvement Loans Pros and Cons

Pros  Cons
No collateral required: You don't have to put up your home or other assets as security for the loan. Higher interest rates: Personal loans typically have higher interest rates than other types of home improvement loans, such as home equity loans or HELOCs.
Fast funding: You can typically get the money you need faster than other home improvement loans within a few days. No tax benefits: You cannot deduct the interest you pay on a personal loan for home improvement on your taxes.
Fixed monthly payments: This makes it easier to budget for the loan and ensure you can afford the payments.

Short repayment terms: Home improvement loans have relatively short repayment terms compared to other financing options.

Before Getting a Renovation Loan, Here Are Some Things to Consider

Before getting a renovation loan, it's important to carefully evaluate several factors to ensure the loan and the improvement project align with your financial goals and circumstances. Here are things to consider:

  • Impact on Home's Value: Assess whether the renovation will significantly increase your home's market value. Some projects offer a higher return on investment than others, so choosing renovations that enhance your property's worth is important.
  • Cost Savings: Consider if the renovations will lead to long-term savings. For example, energy-efficient upgrades can reduce utility bills, and certain repairs might prevent more costly issues in the future.
  • Profitability: If you plan to sell your home, calculate whether the increased value post-renovation will exceed the cost of the loan and the renovations, ensuring you still make a profit.
  • The urgency of Renovations: Determine the urgency of the project. If the renovations are essential repairs (like fixing a leaky roof), they might be more urgent than cosmetic upgrades.
  • Loan Terms and Interest Rates: Understand the loan terms, including the interest rate, repayment period, and any fees. Ensure that the loan is affordable and aligns with your financial plan.
  • Your Financial Stability: Evaluate your current financial situation. Consider whether you can comfortably manage the additional loan payments and your financial obligations.
  • Duration of the Project: Consider the timeline of the renovation. Longer projects might lead to higher costs and more inconvenience, so plan accordingly.
  • Living Arrangements During Renovation: If the renovation is extensive, you might need to live elsewhere temporarily. Consider the cost and feasibility of alternative living arrangements.
  • Contractor Selection: The success of your renovation largely depends on the contractor you choose. Ensure you hire a reputable, experienced contractor who can complete the project within budget and on time.
  • Potential Overcapitalization: Avoid overcapitalization, which occurs when the cost of the renovation exceeds the value it adds to your property. This is especially important in neighborhoods with a ceiling on property values.
  • Permits and Regulations: Ensure your renovation project complies with local building codes and regulations. Factor in the cost and time required to obtain necessary permits.
  • Future Plans: Consider your long-term plans. If you intend to stay in your home for many years, personal preferences might take precedence over return on investment.
  • Market Conditions: Understand the current real estate market. You might recoup your investment quicker in a booming market, but in a slow market, it might take longer.

How to Get a Home Improvement Loan?

Getting a home improvement loan typically involves several steps. It is easy to apply for a home improvement loan. If you think getting a home improvement loan is the best choice, just follow the process outlined below.

  1. Determine your home improvement needs: Assess the project's scope and calculate the estimated cost. This will give you a better idea of the loan amount you'll need.
  2. Check your credit score: You are more likely to be approved for a loan with a good credit score. You can request a free credit report and review it for errors or issues that could negatively affect your credit score. If necessary, take steps to improve your credit score.
  3. Establish your budget: Work out how much money you need for your home improvement project and how much you can repay each month.
  4. Research the market for the best home improvement loans available: We have compared the top ones available, so you may want to consider the home improvement loans shown on this page. Look for competitive interest rates, flexible repayment terms, and favorable loan terms.
  5. Identify your preferred lender and prepare to apply: Gather the necessary documents, such as proof of ID, address, and income, and details about your home improvement project before you start the application. Check with the lender to confirm the specific documents they require.
  6. Complete the application form and hit submit. Most home improvement loan applications are decided upon instantly, so there shouldn’t be a wait to see if your application is successful.
  7. Start your home improvement project: Once you've completed all the paperwork, you'll receive the loan funds. Begin your home improvement project as planned, using the funds to cover the costs.

Home Improvement Loan Alternatives

Home improvement loans are a great way to generate finance if you are looking to borrow a small amount of money for a short to medium-term period. However, there are other different methods to raise funds for home improvements that you can consider.

  1. FHA 203(k) Loans:
    1. This government-backed loan combines the cost of home improvements and the home purchase price into one loan.
    2. Ideal for buying and renovating a fixer-upper.
    3. Offers low down payments and is accessible to those with lower credit scores.
    4. Requires the renovations to be completed by a licensed contractor and approved by an FHA appraiser or a HUD consultant.
  2. Home Equity Loans:
    1. A home equity loan is a second mortgage that allows you to borrow against the equity you've built up in your home.
    2. Provides a lump-sum amount with a fixed interest rate.
    3. Good for homeowners with significant equity and those needing a specific amount for a one-time project.
  3. Home Equity Line of Credit (HELOC):
    1. HELOCs work like a credit card, giving you a line of credit based on your home's equity.
    2. Offers flexibility to borrow as needed over a draw period, usually with variable interest rates.
    3. Suitable for ongoing or multiple home improvement projects.
  4. Cash-Out Refinance:
    1. Involves refinancing your existing mortgage for more than you owe and taking the difference in cash.
    2. Can be a good option if you can secure a lower interest rate on your new mortgage.
    3. Useful for large-scale renovations.
  5. Personal Loans:
    1. Unsecured loans that don’t require your home as collateral.
    2. Typically, they have higher interest rates than home equity products but are a good option if you have good credit and need funds quickly.
    3. Suitable for smaller projects or when you don’t have enough equity in your home.
  6. Credit Cards:
    1. Can be used for smaller home improvement projects or short-term financing needs.
    2. Offers the convenience of easy access to funds, but typically comes with higher interest rates.
    3. Best if you can take advantage of a card with a 0% introductory APR and pay off the balance before the promotional period ends.
  7. Government Grants and Programs:
    1. Some government programs offer grants or loans for home improvements, especially for energy-efficient upgrades or renovations that improve accessibility.
    2. Programs like the Energy Efficient Mortgage program can be used for energy-saving improvements.

Each of these alternatives has its pros and cons, and the best choice depends on factors like your financial situation, the amount of equity in your home, the size and scope of your project, and your long-term financial goals. Consider the total cost of borrowing and the impact on your overall financial health before deciding.

Conclusion

When considering financing for home improvements, evaluating all available options is essential to finding the one that best suits your financial situation and renovation needs. Before making a decision, consider factors such as the scale of your project, the amount of equity in your home, your credit score, and your long-term financial plans. It's also crucial to consider the potential return on investment that your home improvement might bring, especially if you plan to sell your home.

Remember, while some options may offer lower interest rates, they might also require your home as collateral, adding a layer of risk. Unsecured options like personal loans or credit cards might be more expensive in terms of interest but could be preferable if you're undertaking smaller projects or want to avoid putting your home at risk.

If you want to improve an area of your home but lack funds, a home improvement loan is worth your consideration. Our comprehensive guide outlines the key factors to consider and highlights some of the best home improvement loans available. We’ve also outlined other options to ensure you make the most informed choice.