Home improvement loans can help you renovate, remodel or upgrade your home. According to Finder’s most recent Consumer Confidence Index survey, 36% of respondents say they’re getting a personal loan for home improvements. But in a time of relatively high interest rates, it’s important to compare your options to ensure you’re getting the best deal.
To help you, we’ve compiled a list of the top 5 lenders offering home improvement loans, with some of the lowest rates and fees available.
5 best home improvement loans
Best overall
LightStream personal loans
LightStream offers some of the highest loan amounts — up to $100,000 — as well as the lowest rates on home improvement loans, with no origination or other fees. Its Rate Beat program promises a rate .10% below any competitor's rate on an unsecured loan, as long as you meet the requirements.
LightStream also offers a 0.5% autopay discount if you set this up before funding and has a $100 satisfaction guarantee. But if you have bad to fair credit, you'll need to look elsewhere. Its loans are only available to borrowers with credit scores of 660 and up, and you must apply with a hard credit check.
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Pros
- No origination fees or prepayment penalties
- Rate beat program helps guarantee you're getting the best rate
- Same-day turnaround possible
- Repayment terms up to 144 months
Cons
- High minimum loan amount
- No prequalification process
- Requires good to excellent credit
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| Loan amount | $5,000 to $100,000 |
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| APR | 7.49% to 25.99% |
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| Interest Rate Type | Fixed |
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| Min. credit score | Good to excellent credit |
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| Turnaround Time | As soon as same day |
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| Loan Term | 24 to 144 months |
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*Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of 3 years would result in 36 monthly payments of $303.99.
Truist Bank is an Equal Housing Lender. © 2020 Truist Financial Corporation. SunTrust, Truist, LightStream, the LightStream logo, and the SunTrust logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.
| Min. credit score | Good to excellent credit |
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| APR | 7.49% to 25.99% |
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| Loan amount | $5,000 to $100,000 |
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Best for joint loans
If you're struggling to qualify for a personal loan for home improvements, applying with a creditworthy spouse or family member could help increase your chances of approval. The good news is Sofi is one of the few personal loan lenders that accepts joint loans with no mandatory origination fees.
Like LightStream, it offers loans up to $100,000 as soon as the same day you're approved — with no mandatory origination fees and a 0.25% autopay discount. SoFi borrowers can also access perks like free financial planning. These perks make it a good option for professionals who want a range of financial services under one roof.
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Pros
- Same-day funding available
- No mandatory fees or prepayment penalties
- Wide range of financial products and services
Cons
- Relatively high $5,000 minimum loan
- 0.25% autopay discount only available with Sofi checking account and direct deposit
- Paying an origination fee may be required for a lower rate
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| Loan amount | $5,000 to $100,000 |
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| APR | 8.99% to 29.99% |
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| Interest Rate Type | Fixed |
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| Min. credit score | 680 |
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| Turnaround Time | Up to 2 business days |
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| Loan Term | 2 to 7 years |
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Fixed rates from 8.99% APR to 29.99% 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 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. 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%-7%, 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.
| Min. credit score | 680 |
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| APR | 8.99% to 29.99% |
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| Loan amount | $5,000 to $100,000 |
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Best for lower credit scores
Unlike most personal loan lenders, Upstart accepts credit scores as low as 300, making it ideal for people who need to build their credit history. That's because Upstart considers more than just your credit to make a decision — your employment history and education also play a role.
However, Upstart's application asks for more information than you might otherwise give a lender for a home improvement loan — like your SAT score, in some cases. And while there is technically no credit score minimum, most Upstart borrowers have scores in the high 600s.
- Not available in: West Virginia
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Pros
- Accepts credit scores as low as 300
- Transparent eligibility criteria
- Nontraditional underwriting process
- Prequalification available
Cons
- 0% to 12% origination fee
- No joint loans or cosigners allowed
- Only two loan term options
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| Loan amount | $1,000 to $50,000 |
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| APR | 7.80% to 35.99% |
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| Interest Rate Type | Fixed |
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| Min. credit score | 300 |
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| Turnaround Time | 1 to 3 business days |
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| Loan Term | 36 or 60 months |
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| Min. credit score | 300 |
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| APR | 7.80% to 35.99% |
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| Loan amount | $1,000 to $50,000 |
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Best for comparing lenders
Fiona (formerly Even) is a free connection service that partners with 34 top lenders to help you find a home improvement loan up to $100,000 based on your credit score and income. To get matched with lenders, fill out Fiona's online form and provide your personal details.
The benefit of Fiona is getting matched with multiple lenders offering home improvement loans with just one form. But you may be inundated with marketing emails and calls from Fiona's lending partners after you apply.
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Pros
- Comparing lenders doesn't affect your credit
- Form is simple and quick to fill out
- Gets mostly positive reviews on Trustpilot
Cons
- Shares your information with third parties
- Could receive many emails and calls
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| Loan amount | $1,000 to $100,000 |
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| APR | 5.20% to 35.99% |
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| Interest Rate Type | Fixed |
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| Min. credit score | Poor |
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| Turnaround Time | Varies by lender |
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| Loan Term | 4 months to 12 years |
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| Min. credit score | Poor |
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| APR | 5.20% to 35.99% |
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| Loan amount | $1,000 to $100,000 |
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Best for low rates
American Express personal loans
American Express offers no-origination-fee personal loans to eligible card members, which can be used for home improvements. Its starting rate of 5.91% is one of the lowest rates out there — so if you're a current Amex card customer or plan on becoming one, it's probably worth checking its rates.
However, its maximum loan amount is lower than what LightStream or Sofi offer, ruling this loan option out for renovations exceeding $40,000. You also need to be a current Amex customer and log in to its website to apply for a personal loan.
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Pros
- Competitive rates
- Low starting loan amount
- No origination fees or prepayment penalties
Cons
- Relatively low maximum amount
- Must be a current Amex card customer
- Eligibility requirements not disclosed
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| Loan amount | $3,500 to $40,000 |
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| APR | 5.91% to 19.97% |
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| Interest Rate Type | Fixed |
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| Min. credit score | Not stated |
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| Loan Term | 12 to 60 months |
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| Min. credit score | Not stated |
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| APR | 5.91% to 19.97% |
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| Loan amount | $3,500 to $40,000 |
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Methodology: How we chose the best providers
Finder’s lending experts review more than 120 lenders against 16 key metrics to narrow down the best personal loans:
- Minimum APR
- Maximum APR
- Origination fees
- Minimum loan amount
- Maximum loan amount
- Minimum loan term
- Maximum loan term
- Number of states served
- Minimum credit score
- Joint application availability
- Turnaround time
- Online application availability
- Prequalification process
- BBB ratings
- Trustpilot ratings
- Other features, such as rate discounts
We weigh the lender’s minimum and maximum APR to focus on the best low-interest personal loans. And we regularly review our top selections as lenders enter and leave the market.
How to compare home improvement loans
Below are the key factors to consider when comparing home improvement loans. While a loan’s APR is probably the most important, you’ll also want to consider loan amounts, repayment terms and funding times.
- APR. Home improvement loans APRs range from 6% to 36%. Unlike the interest rate, the APR includes the loan’s interest rate plus any fees. The lower the APR, the less you’ll pay in interest over the life of the loan.
- Loan term. Shorter loan terms (two to seven years) will have higher monthly payments than longer terms (10 to 20 years), but you’ll pay far less in interest over the long term. In general, it’s best to choose the shortest term you can afford.
- Fees. Be sure to add any origination fees, closing costs and annual fees to your comparisons. These can significantly increase the cost of your loan — especially closing costs if they apply.
- Loan amount. Make sure the loan amounts the lender offers fits your project’s needs. Borrowing too little can throw a wrench into your home improvement plans. Conversely, borrowing too much increases your loan cost.
- Monthly payment. Use a loan calculator to estimate your monthly payment for each loan option and determine if it fits your monthly budget. Use our personal loan calculator to calculate monthly payments quickly.
- Credit requirements. Every lender has different eligibility criteria. But regardless of the lender, you’ll need a good to excellent credit score to qualify for the lowest rates and no origination fees.
- Secured vs. unsecured. Home equity loans and home equity lines of credit use your home as collateral, while personal loans are unsecured. Unlike personal loans, home equity loans/HELOCs come with the risk of losing your home if you miss payments.
- Funding times. If you need funds quickly, online lenders typically offer the fastest funding times — typically within 24 hours after approval. Meanwhile, bank loans can take days or even weeks to fund.
Tip: Using a spreadsheet to view each loan’s APR, terms and monthly payments can make your comparison easier.
What is a home improvement loan, and how does it work?
A home improvement loan is a type of financing that can be used toward repairing, renovating or enhancing your home or property. These loans can be unsecured or secured and can be used for projects both big and small — like replacing your roof or adding a new bedroom. You may find home improvement loans from banks, online marketplaces and even from home improvement stores like project loans offered through Home Depot.
The two main types of loans used for home improvements are personal loans or home equity loans and home equity lines of credit (HELOCs). You apply for them as you would for any other type of financing, qualifying based on your creditworthiness, income and other factors.
What to use a home improvement loan for
A home improvement loan can be used for repairing, renovating or upgrading a residential property. Here are some of the most common reasons people take out a home improvement loan:
- Repairs and maintenance. Home improvement loans are often used to pay for expensive repairs, like putting on a new roof, replacing an old HVAC system or even to finance the addition or repairs of a septic tank.
- Renovations and remodels. Home improvement loans are ideal for bigger renovations like room remodeling or upgrading an old kitchen, bathroom or patio.
- Property value improvements. These might include installing high-end features like marble counter tops or wood floors or adding a new deck, adding a hot tub or financing a new swimming pool.
- Energy-efficient improvements. This includes improvements like solar panels, upgrading insulation or replacing windows and doors to reduce energy costs.
- Structural enhancements. These are improvements that make your home safer and more livable, such as adding hurricane windows or paving a driveway.
- Upgrades for comfort. These are improvements to enhance your quality of life, such as adding smart home features or a pool enclosure.
How much do home improvement loans cost?
Home improvement loans have interest rates ranging anywhere from 6% to 36% APR. This means that the cost of a home improvement loan varies widely depending on how much you borrow, the interest rate you receive and the loan repayment term.
In general, the higher your credit score, the better your chance of receiving a rate on the lower end — saving you money on interest. Repayment terms also play a big factor in how much interest you pay. Loans with longer repayment terms have higher total interest costs than shorter-term loans.
For example, if you got a $25,000 home improvement loan at 7.99% APR with a term of five years, you’d pay around $5,407.41 in total interest over the loan’s life. If you increase the term to 10 years, your interest would more than double to $11,382.43.
Is a home improvement loan worth it?
When financing a home improvement with debt, always balance the loan’s cost against the benefits. For example, if you borrow for non-essential improvements like a hot tub or make changes for personal tastes, this can lead to high borrowing costs for improvements that may not increase your home’s value.
Eligibility requirements for a home improvement loan
While requirements for a home improvement loan vary by the lender, be prepared to meet these general criteria:
- Minimum credit score. Most lenders have a minimum credit score requirement for home improvement loans. These vary by lender but typically range from 560 to 660.
- Regular income. Lenders generally require borrowers to demonstrate a reliable income stream to ensure they can repay the loan.
- Debt-to-Income (DTI) ratio. This ratio is your monthly debt payments divided by your monthly income and should typically be below 43%.
- Proof of home ownership. Providing evidence that you own your home may be required when applying for a home improvement loan.
- Documentation. These typically include tax returns, bank statements, income verification and identification.
When comparing lenders, keep in mind that online lenders may be more flexible than banks and credit unions — and typically offer faster funding.
How to get a home improvement loan
Whether you’re after a personal loan or home equity loan or HELOC, here are the general steps to getting a home improvement loan:
- Narrow down the type of loan. The two most common types of home improvement loans are personal loans and home equity loans/HELOCs. The difference is that personal loans are unsecured and home equity loans and HELOCs use your home as collateral.
- Check your credit score. Lenders typically require a good credit score (660+) and a clean credit history to qualify. So, it’s a good idea to check your credit score before you apply — the higher your score, the better your chance of approval at a competitive rate.
- Check the lender’s requirements. Check the lender’s eligibility requirements, as you don’t want to apply for loans you don’t qualify for. Most lenders offer online prequalification with no impact on your credit score.
- Gather your documents. Having the required documents on hand can make your application smoother. At a minimum, be prepared to supply a government ID and proof of income, like bank statements.
- Apply for the loan. The majority of lenders offer streamlined online applications that let you upload documents or connect to your bank accounts, but a bank or credit union may require you to apply in person.
- Accept or decline the offer. Review the terms and conditions carefully. Check interest rates, fees, loan terms, hardship policies and payment options — and remember that you’re not obligated to accept any loan.
Can I get a home improvement loan with bad credit?
Yes, getting a home improvement loan with bad credit is possible, but you’ll likely pay a steep APR and an origination fee. Consider improving your credit score before applying for a home improvement loan, or consider alternative forms of financing like using cash or applying for a Title I loan through HUD.
Home improvement loan vs. equity financing
If you’re unsure whether to use a home improvement loan or tap into your home’s equity, here are the main factors to weigh against each other:
- Cost of borrowing. While many believe that home equity loans are a cheaper form of borrowing, this isn’t always the case. If you have excellent credit, a personal loan could actually be cheaper than borrowing against your home’s equity — with less risk.
- Risk tolerance. One major difference between a home improvement loan and equity financing is that using equity financing options like a home equity loan or HELOC puts your home at risk if you can’t keep up with the payments.
- Funding times. Applying for a home equity loan or HELOC is a time-consuming process involving a lot of paperwork. Applying for a personal loan for home improvements is generally much faster — with 24-hour funding possible in many cases.
Home improvement loan pros and cons
Pros
- Finance a large project
- Fixed monthly payments
- Increase the value of your home
- Build credit with on-time payments
Cons
- Adds to your debt
- Improvements may not add value
- Home equity loans and HELOCs carry risks
- Potentially high interest rates and fees
How to get the most out of your remodel
According to National Data by Cost vs. Value, most renovations allow you to recoup well over 50% of your investment.
| Replace your garage door | $4,302 | $4,418 | 102.7% |
| Add decorative stone veneer to your home | $10,925 | $11,177 | 102.3% |
| Minor kitchen remodel | $26,790 | $22,963 | 85.7% |
| Replace existing siding with fiber cement | $19,361 | $17,129 | 88.5% |
| Replace windows with vinyl | $20,091 | $13,766 | 68.5% |
| Add a wooden deck | $17,051 | $8,553 | 50.2% |
| Replace your roof with asphalt shingles | $29,136 | $17,807 | 61.1% |
| Mid-range bathroom remodel | $24,606 | $16,413 | 66.7% |
| Add a mid-range master suite | $157,855 | $47,343 | 30.0% |
| Add a mid-range bathroom | $57,090 | $17,237 | 30.2% |
Alternatives to a home improvement loan
If you’d rather not take out a loan to pay for home improvements — or you don’t qualify — consider these options instead:
- Credit cards with a 0% introductory APR. A 0% intro rate credit card can make sense for smaller home projects if you can pay it off before the promotional period ends.
- Financing through a contractor. You may be able to get third-party financing through a contractor. But be sure to shop around for the best rates and terms.
- Government loan options. Title 1 loans from the Department of Housing and Urban Development are designed to help lower-income homeowners pay for improvements.
- FHA 203(k) rehab loan. An FHA loan that rolls the cost of purchasing or refinancing a home with funds for renovations into one mortgage.
- Cash. Using cash to pay for home improvements will help you avoid high interest charges and added financial pressures, especially if you don’t qualify for low rates.
Frequently asked questions
What is the interest rate on a home improvement loan?
Interest rates on personal loans that can be used for home improvements range between 6% and 36% APR, depending on your creditworthiness and other factors.
What is the average repayment term on a home improvement loan?
Repayment terms on home improvement personal loans range anywhere from two to 12 years. On the other hand, repayment terms on home equity loans and HELOCs can reach up to 20 or even 30 years.
What is the minimum credit score for a home improvement loan?
This varies widely by lender. While some lenders, like LightStream like to see a minimum credit score of 660, other lenders, like Upstart, are more lenient — accepting scores as low as 300 in some cases.
