You can use home improvement loans to finance home repairs, additions, and renovations. To find the most affordable rates and terms, compare offers from various lenders.
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You may use an unsecured home improvement loan to pay for renovations and maintenance. This kind of personal loan can be used to upgrade your kitchen, put in a pool, or fix your roof.
You can finance a renovation with a loan for home improvements without putting your house up as collateral. Theyre also usually funded more quickly than other financing options. To find a loan that fits the size of your project and your budget, compare offers from various lenders.
You may use an unsecured home improvement loan to pay for renovations and maintenance. This kind of personal loan can be used to upgrade your kitchen, put in a pool, or fix your roof.
You can finance a renovation with a loan for home improvements without putting your house up as collateral. Theyre also usually funded more quickly than other financing options. To find a loan that fits the size of your project and your budget, compare offers from various lenders.
Best Home Improvement Loans
Joint loans with low rates
SoFi is a solid choice for people with good credit because it provides low rates, no fees, and flexible payment options. To increase their chances of approval, borrowers can include a co-signer or co-borrower.
2 to 7 years
Fixed rates from 7. 99% APR to 23. 43% APR reflect the 0. 25% autopay discount and a 0. 25% direct deposit discount. The SoFi rate ranges listed as of 8/22/22 are liable to change at any time without prior notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be determined by a number of variables, such as an assessment of your credit worthiness, income, and other factors, and will fall within the range of rates mentioned above. See APR examples and terms. The SoFi 0. You must consent to making monthly principal and interest payments via an automatic monthly deduction from a savings or checking account in order to receive the 25% AutoPay interest rate reduction. For periods when you do not pay by automatic deduction from a savings or checking account, the benefit will stop and be forfeited.
Low rates and long repayment terms
Home improvement loans from LightStream come with no fees, low rates, and terms of up to 12 years. A joint loan application from two borrowers may result in a lower interest rate or a larger loan amount.
2 to 7 years
Rates quoted are with AutoPay. Your loan terms are not guaranteed and could change depending on the autopay or invoice payment method, loan amount, loan term, and purpose of the loan. Discount for AutoPay only applies when chosen before loan funding. Rates without AutoPay are 0. 50% points higher. You must submit an application on LightStream in order to get a loan. com which may affect your credit score. You might need to provide proof of your income, identity, and other application-related details. Payment example: Monthly payments for a $25,000 loan at 4. 20 years at 98% APR would require 240 payments of $164 per month. 71. Some additional conditions and limitations apply. Advertised rates and terms are subject to change without notice. Truist Bank is an Equal Housing Lender. © 2022 Truist Financial Corporation. Truist Financial Corporation’s service marks include Truist, LightStream, and the LightStream logo. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.
To increase their chances of being approved for a lower rate, Upgrade allows borrowers to add a co-signer or co-borrower. It also has a mobile app to manage your loan.
2 to 7 years
Upgrade personal loans come with 7 percent annual percentage rates (APRs). 96%-35. 97%. All personal loans have a 1. 85% to 8. 99% origination fee, which is deducted from the loan proceeds. For the lowest rates, you must set up autopay and pay off a portion of your existing debt upfront. Loans feature repayment terms of 24 to 84 months. Take a $10,000 loan with a 36-month term and a 17 percent interest rate, for instance. 59% APR (which includes a 13. assuming a 94% annual interest rate and a 5% one-time origination fee, you would receive $9,500 and be required to make a $341 monthly payment. 48. Your monthly payments would total $12,293 over the loan’s term. 46. The APR on your loan could be higher or lower, and there might not be a range of term lengths available in your loan offers. Actual rate is determined by a number of factors, including loan term, credit history, and usage history. Your fixed rate loan’s cost could go up if you make late payments or incur additional charges and fees. When paying back a loan early, there are no fees or penalties. Personal loans issued by Upgrades bank partners. Information on Upgrades bank partners can be found at https://www. upgrade. com/bank-partners/.
Low rates and midsize loans
on Goldman Sachs website
Marcus by Goldman Sachs
on Goldman Sachs website
Marcus loans have low rates, no fees, and flexible terms starting at $3,500.
3 to 6 years
The terms of your loan are not guaranteed, and they depend on our ability to confirm your identity and credit history. Rates range from 6. 99% to 24. Loan terms range from 36 to 72 months, and the APR is 99%. For NY residents, rates range from 6. 99%-24. 74%. For the lowest rates and longest loan terms, only the most creditworthy applicants are considered. Rates will generally be higher for longer-term loans. You must submit additional paperwork, including an application that could impact your credit score, in order to be approved for a loan. A number of variables, such as the purpose of the loan and our assessment of your creditworthiness, will affect the availability of a loan offer and the terms of your actual offer. Your creditworthiness (including your credit score and credit history) and the term of your loan (for instance, rates for 36-month loans are typically lower than rates for 72-month loans) are a few of the many variables that will affect your rates. Depending on your loan purpose, income, and creditworthiness, your maximum loan amount may change. Your ability to repay the loan must be supported by your verifiable income. All loans are provided by Goldman Sachs Bank USA, Salt Lake City Branch, which owns the Marcus by Goldman Sachs brand. Applications are subject to additional terms and conditions. Receive a 0. 25% APR reduction when you enroll in AutoPay. If AutoPay is not active, this discount will not be applied. When enrolled, more of your monthly payment is applied to the principal of your loan and less interest is charged, which could lead to a smaller final payment. See loan agreement for details.
Discover provides benefits like a mobile app to manage your loan and a special money-back guarantee for customers with good to excellent credit.
3 to 7 years
This does not represent a loan commitment from Discover Personal Loans. Once you apply, a lender will decide whether to approve you for a loan based on the details of your application and credit history. Your APR will be between 6. 99%-24. 99% for loans with terms between 36 and 84 months, based on creditworthiness at the time of application. For instance, if you are granted a loan for $15,000 at 10 You will only pay $285 per month at 99% APR for a term of 72 months. Customers with the best credit can access our lowest rates. Your credit history, application information, and the term you choose are just a few of the many variables that go into determining your rate. Not all applications will be approved.
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Wells Fargo Personal Loan
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Customers of Wells Fargo may be qualified for large loans and personal loan rate breaks. This loan stands out for home improvement projects due to its lengthy terms and lenders’ joint loan option.
1 to 7 years
on NerdWallets secure website
on NerdWallets secure website
Online personal loans are available from Rocket Loans to customers with fair credit and a credit history longer than two years.
3 to 5 years
Cross River Bank, a commercial bank with a New Jersey state charter, member FDIC, and an equal housing lender, makes all personal loans. All loans are unsecured, fully amortizing personal loans. Eligibility for a loan is not guaranteed. For information on the disclosures, licenses, and lending restrictions that each state requires, please visit our Disclosures and Licenses page. Borrower must be a U. S. citizen or permanent U. S. resident alien at least 18 years old (borrowers must be at least 19 in Nebraska and Alabama). All loan applications are subject to credit review and approval. Your credit history, requested amount, requested loan term, credit usage, credit history, and other factors all affect the loan terms that are offered. Not all borrowers receive the lowest interest rate. If you want to get the best rate, you need to have excellent credit, fulfill certain requirements, and choose autopay. Rates and conditions may change at any time without prior notice. Please refer to RocketLoans. For additional terms and conditions, please visit our Terms of Use.
on Best Eggs website
on Best Eggs website
For borrowers who want to consolidate their debt and require quick cash, Best Egg offers personal loans.
3 to 5 years
*Trustpilot TrustScore as of June 2020. Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender, or Blue Ridge Bank, a Nationally Chartered Bank, Member FDIC, Equal Housing Lender, are the lenders of Best Egg personal loans, including the Best Egg Secured Loan. “Best Egg” is a trademark of Marlette Holdings, Inc. , a Delaware corporation. The Best Egg Personal Loan, the Best Egg Secured Loan, and/or “Best Egg on behalf of Cross River Bank or Blue Ridge Bank, as originator of the Best Egg Personal Loan,” as appropriate, are all references to “Best Egg.” Your credit score, income, debt repayment obligations, loan amount, credit history, and other factors will all be taken into consideration when determining the term, amount, and APR of any loan we offer you. Your loan agreement will contain specific terms and conditions. The majority of our clients receive their money the following day. Your money can be deposited into your bank account within 1-3 business days of successful verification. Depending on the procedures of your bank, the timing of the funds becoming available after loan approval may change. Loan amounts range from $2,000– $50,000. Massachusetts residents can borrow a minimum of $6,500, New Mexico and Ohio residents can borrow $5,000, and Georgians can borrow $3,000 Your total outstanding Best Egg loan balances cannot exceed $100,000 for a second Best Egg loan. Annual Percentage Rates (APRs) range from 8. 99%–35. 99%. The annual percentage rate, or APR, represents the cost of credit and includes both your interest rate and a 0 percent origination fee. 99%–8. 99% of the amount of your loan, which will be subtracted from any loan proceeds you receive A loan with an origination fee will have a term of at least four years. 99%. Your APR, which might be higher than our lowest advertised rate, will depend on the length of your loan. To be eligible for our lowest APR, you must have a minimum FICO® score of 700 and an individual annual income of $100,000. For example: a 5‐year $10,000 loan with 9. 99% APR has 60 scheduled monthly payments of $201. 81, and a 3‐year $5,000 loan with 7. 99% APR has 36 scheduled monthly payments of $155. 12. Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account in order to assist the government in combating the funding of terrorism and money laundering activities. What this means for you is that when you open an account, we will ask for information such as your name, address, date of birth, and other identifying characteristics. We might also request to see your driver’s license or other forms of identification. You cannot purchase Best Egg products if you reside in Iowa, Vermont, West Virginia, the District of Columbia, or the United S. Territories.
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Navy Federal Credit Union Personal Loan
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Most members might find Navy Federal personal loans to be a good fit because of their flexible amounts, user-friendly features, and quick funding times.
1 to 5 years
What is a home improvement loan?
You can use an unsecured personal loan called a “home improvement loan” to pay for improvements or repairs. Lenders provide these loans for up to $100,000. You receive a lump sum when you receive a home improvement loan, and you pay it back over two to twelve years in monthly installments.
The interest rate for this type of loan is determined by factors like your credit and income because you are not using your home as collateral. Your credit will suffer if you are unable to repay a home improvement loan.
Home improvement loans vs. equity financing
If you don’t have enough equity in your home or don’t want to use it as collateral, a home improvement loan makes sense. Equity is the amount that is owed on your mortgage compared to the value of your home.
A home equity loan or line of credit with equity could have lower monthly payments, but the lender might need to order an appraisal before approving the loan.
Home equity loan
Home equity loans have fixed interest rates and are disbursed in lump sums, so the monthly payments are constant. You have up to 15 years to repay this loan in monthly installments.
Home equity loans function similarly to personal loans in comparison, but frequently have lower rates and longer repayment terms.
Home equity line of credit
With a HELOC, you can borrow money as needed for renovations and only pay interest on what you actually borrow. If you want more borrowing flexibility and don’t mind fluctuating monthly payments, this variable-rate option is the best choice for you.
Unlike personal loans, a HELOC allows you to borrow money whenever you need it over a period of about 10 years. This makes it a good choice for long-term projects or unplanned expenses. A personal loan offers a one-time cash influx.
Home improvement loan pros and cons
The benefits and drawbacks of using personal loans for home improvement projects are listed below.
Pros
Cons
How to compare home improvement loans
Pre-qualifying and comparison shopping can help you locate the loan with the best terms and features. A few key aspects to evaluate when comparing home improvement loans are as follows:
Home improvement loan rates
Current home improvement loan rates are between 6% and 35. 99%. Your credit score, credit history, and debt-to-income ratio are the main factors that lenders consider when setting your interest rate for a home improvement loan.
Heres what personal loan rates look like, on average:
|
Hows your credit? |
Score range |
Estimated APR |
|
Excellent |
720-850. |
10.6%. |
|
Good |
690-719. |
15.7%. |
|
Fair |
630-689. |
19.4%. |
|
Bad |
300-629. |
25.2%. |
Source: From March 1, 2022, to August 31, 2022, users who pre-qualified in NerdWallet’s lender marketplace provided aggregate, anonymized offer data. 31, 2022. Rates are estimates only and not specific to any lender. Low credit scores—typically those under 500—are unlikely to be accepted. The data in this table only applies to lenders with APRs under 36%.
How to get a home improvement loan
To apply for a home improvement loan, prepare your paperwork, check your rate and monthly payments, and compare lender offers with other options.
Lets break down those steps:
How to use a home improvement loan
Unsecured loans can cover almost any purchase. Depending on your location, the size of your home, and the scope of your plans, you’ll need a different amount.
Given the most recent cost estimates available, these common projects and their potential cost are listed.
Other types of home improvement financing
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 to apply: If your project and finances meet the requirements of these programs, you should think about applying. They can help make upgrades more affordable.
Cash-out refinancing
You can increase the loan amount on your current mortgage and use the difference to pay for your renovation.
When to choose it: If current mortgage rates are lower than the one you are currently paying, think about choosing this option.
Credit cards
Strategically using a credit card can help you pay for your upgrades. Rewards cards can pay for upgrades as you make them, while a card with a 0% introductory APR period can be used to pay for quick home improvements.
When to use a credit card: For projects that are modest enough so that you won’t use the entire limit. Typically, you should strive to pay off your entire balance each month. To be eligible for a rewards or zero-interest credit card, you must have good or excellent credit (690 credit score or higher).
Last updated on December 1, 2022
More than 35 financial institutions’ personal loan products are evaluated and rated by NerdWallet. We interview company representatives, gather over 45 data points from each lender, and compare each lender to others that target the same clientele or provide a comparable personal loan product. Every year, NerdWallet’s writers and editors complete a thorough fact check and update, as well as making any necessary updates throughout the year.
Our star ratings give lenders points for providing customer-friendly features, such as soft credit checks for pre-qualification, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, quick funding times, reachable customer service, reporting of payments to credit bureaus, and financial education. Additionally, we take into account legal actions brought by organizations like the Consumer Financial Protection Bureau. Based on our evaluation of which are most significant to consumers and how significantly they affect consumers’ experiences, we weigh these factors.
This methodology only applies to lenders who cap interest rates at 36%, which is the highest amount that most financial experts and consumer advocates concur is necessary to make a loan affordable. NerdWallet does not receive compensation for our star ratings. Learn more about our editorial standards and rating methodologies for personal loans.
To recap our selections…
NerdWallet’s Best Home Improvement Loans of December 2022
A lump sum of money borrowed for home improvements is paid back over one to 12 years in fixed monthly installments. The loans, unlike home equity loans or home equity lines of credit, are not secured by your home, and your ability to repay them will largely determine whether you are approved.
Home improvement loan amounts range from $1,000 to $100,000. The loan is disbursed all at once, and you have one to twelve years to pay it back with interest.
The most advantageous method for financing home improvements depends on a number of variables, including your home equity, the amount you need to borrow, and your credit score. Compare home equity loans, home equity lines of credit, cash-out refinancing, and government programs with loans for home improvements.
Rates on loans for home improvements typically range from 6% to 36%. Borrowers with high credit scores and credit histories that demonstrate consistent on-time payments for other loans and credit cards typically receive the best personal loan rates.
Annie Millerbernd is a personal loans writer. Her articles have appeared in USA Today and The Associated Press. Read more.
FAQ
Which bank is best for renovation loan?
Asking a friend or family member for a loan is the most cost-effective way to borrow money for home improvements. There is a good chance that the terms of a loan from someone you trust will be better than those of a traditional loan or credit card.
What is the cheapest way to borrow money for home improvements?
To qualify for an FHA 203(k) rehab loan, you most likely need a credit score of at least 620. Cash-out refinancing typically requires at least 620. You need a FICO score of 680-700 or higher to use a HELOC or home equity loan for home improvements. Aim for a score in the low to mid 700s when applying for a personal loan or credit card.
What credit score is needed for a home improvement loan?
Credit score needed: 660 It’s a good idea to compare the Wells Fargo loan offer to our editors’ top picks for the best home improvement loans before applying for one.