Ally Bank Home Equity Loan

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Ally can offer zero-interest financing to qualified borrowers. It’s important to weigh this option against others if a contractor provides it.

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NerdWallet rating NerdWallets ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices. NerdWallet rating NerdWallets ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices.
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Est. APR


Est. APR


Loan term

2 to 7 years

Loan term

2 to 7 years

Loan amount


Loan amount


Min. credit score


Min. credit score


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Full Review of Ally Home Improvement Loan

NerdWallet interviewed company executives, gathered more than 40 data points from Allys, and compared Allys with other lenders that target the same market or provide a comparable personal loan product to review Allys’ home improvement loan. Loan terms and fees may vary by state.

Ally Bank offers financing for home improvements via general contractors or suppliers of home remodeling or repair services. According to Greg Cicatelli, who is in charge of Ally’s home improvement sales, the online bank started providing this financing in May 2020 through its lending division, Ally Lending, in each of the 50 states.

Unlike other loans for home improvements, funds from an Ally loan don’t go to a borrower directly. Instead, the bank collaborates with contractors who are given the money to finish your home improvement project. You then repay the loan to Ally in monthly installments.

Compared to some personal loans, Ally home improvement financing can be less flexible; for instance, you cannot change the date on which payments are due. However, the repayment period is lengthy, and some borrowers might be eligible for financing with no interest

How Ally’s home improvement loan works

Consider the scenario where you want a new swimming pool and the installer offers financing through Ally Bank. The contractor will open the Ally app on their tablet once you’ve agreed on a price, and you’ll enter information like your income and employment to qualify for offers.

Ally sends the money to the contractor if you accept a loan offer, and you send Ally your monthly payments. You can manage the loan through Ally’s website.

Ally home improvement loan pros and cons

Low rates: With annual percentage rates between 0% and 26. In comparison to some personal loans, which can have rates as high as 36%, Ally’s home improvement loan rates can be as low as 99%. Rates offered by Greensky, which offers a comparable form of financing, are comparable to Ally’s.

Quick funding: After you’ve been given the go-ahead, Ally can send the money to a contractor in 24 to 48 hours.

Soft credit check: The bank runs a soft credit check when you pre-qualify for Ally financing. You can reject the loan offer without it harming your credit score if you don’t like the offers you receive. A hard credit pull will be performed by the bank if you accept the offer.


You cannot apply for an Ally home improvement loan jointly with another person or as their co-signer. When applying for a personal loan, including a cosigner with better credit or higher income may increase your chances of approval or result in a lower interest rate.

The due date is assigned by Ally and is fixed for the duration of the loan; the borrower cannot choose or change it. It offers hardship plans for things like job losses, but the options are different depending on your circumstances.

Ally only reports to one of the three major credit bureaus, Experian, regarding payments made for its home improvement loans. This means that even if you have made on-time payments for several years, a creditor who checks TransUnion or Equifax won’t be able to see your stellar payment history.

Ally home improvement loan rates, terms and qualifications

Like most personal loans, Ally’s home improvement financing has fixed interest rates. Here are rate options Ally may offer you:

  • 0% APR financing on loans with two- or three-year terms.
  • An APR up to 26.99%.
  • An APR up to 26.99% and a chance to be refunded the interest if you pay the loan off within a certain period.
  • With the promotion, you begin by paying interest on the loan, but if you pay it off within the time frame you specify—which can be anywhere between six months and two years—you are reimbursed for any interest you have already paid during that period. If you don’t pay off the loan within that time frame, you’ll just have to keep making interest-only payments on it. The regular APR for that option is typically higher than the APR for a loan without the promotion would be.

    Ally doesn’t charge origination or prepayment fees. If the payment is more than three days past due, the lender only assesses a $35 late fee.


    A loan term of two to 15 years is available to borrowers, which is a little longer than the typical range for personal loans. When it comes to home improvement loans, some lenders, like LightStream and Navy Federal, offer longer terms than the typical two to seven-year repayment period for personal loans.


    The lender doesn’t provide much information about the requirements for borrowers, but according to Cicatelli, it’s crucial for them to see that you have the resources to repay this additional loan as well as your current debts.

    Like other personal loan providers, Ally determines your loan rate by taking into account your credit score and history, current debts, income, and employment.

    Alternatives to Ally

    Ally is one option for financing home improvement costs. Here are a few alternatives to consider before deciding:

    Federal programs: Energy-efficient mortgages and Title I loans from the Federal Housing Administration can be used to finance home improvements.

    Home equity loans and HELOCs: If you have enough equity in your home, you may qualify for a home equity loan or line of credit These options have low rates and long repayment terms.

    Personal loans: If you don’t have enough equity to cover the project or don’t want to use your home as collateral for the loan, think about taking out a personal loan for a home improvement. You can compare rates and payments from various lenders after pre-qualifying for a personal loan without risking your credit score.

    Credit cards: Generally speaking, DIY projects are the best candidates for using credit cards for renovations. If you intend to buy supplies for your remodel from a specific retailer, a store card may allow you to receive cash back on your purchases.

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    Annie Millerbernd is a personal loans writer. Her articles have appeared in USA Today and The Associated Press. Read more.


    What type of loans does Ally offer?

    You should anticipate paying about $4,000 per month at 5% interest over 15 years.

    What is the monthly payment on a $500 000 home equity loan?

    Cons of Home Equity Loans Home equity loans have some disadvantages, just like any other type of debt. Receiving a large sum of money all at once can be risky for those who lack discipline, and even though the interest rates are low in comparison to other types of debt, they are higher than those on first mortgages.

    What is the downside of a home equity loan?

    Credit score: 620 or higher In many instances, lenders will require a minimum credit score of 620 to be eligible for a home equity loan, though the maximum score may occasionally be as high as 660 or 680. There might still be choices for home equity loans with bad credit, though.