Whether you're finally doing that kitchen remodel or replacing an aging roof, a home improvement loan can get you funded fast, without tapping your home equity.
More homeowners are choosing to renovate than move — 67% say they’d rather improve their current home than relocate, according to Angi’s 2024 State of Home Spending Report, and that shift is only deepening. Angi’s 2025 report found 74% of Millennials say mortgage rates are pushing them to improve their current home instead of buying a new one.
We’ve reviewed more than 120 lenders to bring you five of the best options available right now, from the lowest rates to the most flexible qualification requirements.
50+ personal loan lenders reviewed and rated by our team of experts
6+ types of personal loans analyzed
Evaluated under our unbiased rating system covering 9 categories
20+ years of combined experience covering financial topics
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How we chose the best home improvement loans
Our lending team reviews more than 120 lenders against 16 key metrics, including minimum and maximum APR, origination fees, loan amounts, loan terms, state availability, minimum credit score, joint application options, funding speed, prequalification options and customer service ratings (Better Business Bureau and Trustpilot). We revisit our picks regularly as lenders update their offerings.
How to compare home improvement loans
Once you’ve narrowed down your options, here’s what to focus on:
APR, not just interest rate. The APR includes fees and gives you a true picture of what the loan will cost per year. Always compare APRs, not just the advertised interest rate, especially when one lender charges an origination fee and another doesn’t.
Loan amount. Make sure the lender can actually cover your project. A $20,000 kitchen remodel rules out some lenders at the lower end, while a full addition could run $150,000+, where most personal loans fall short.
Loan term. A longer term means lower monthly payments but more total interest paid. Shorter terms cost less overall but require higher payments. Use a loan calculator to run the numbers on a few scenarios before committing.
Fees. Origination fees (typically 1%–12%) reduce the amount you actually receive. A loan with a slightly higher APR but no origination fee can end up cheaper than one with a lower rate and a hefty fee.
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.
Prequalification. Most lenders now offer a soft-pull rate check that won’t affect your credit score. Use this wherever possible before submitting a full application.
Funding speed. If your project is time-sensitive — say, a roof that needs replacing before winter — look for lenders offering same-day or next-business-day funding.
What is a home improvement loan, and how does it work?
A home improvement loan is typically an unsecured personal loan used to fund repairs, renovations or upgrades to your home. Because it’s unsecured, you don’t put your house up as collateral — unlike a home equity loan or home equity line of credit (HELOC). You may find home improvement loans from banks, online marketplaces and even from home improvement stores like project loans offered through Home Depot.
You apply based on your creditworthiness, income and other financial factors. If approved, you receive a lump sum deposited into your bank account and repay it in fixed monthly installments over a set term.
What to use a home improvement loan for
Home improvement loans are flexible, and there’s no approved project list. That said, here are the most common reasons people borrow:
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.
Kitchen and bathroom remodels. Two of the highest-ROI projects you can do. Even a minor kitchen refresh — new cabinet fronts, countertops and appliances — tends to return more than 100% of its cost at resale.
Curb appeal upgrades. Garage door replacement, new entry doors, stone veneer and siding replacement all rank among the highest-returning projects nationally. These are often more affordable than interior remodels too.
Property value improvements. These might include installing high-end features like marble countertops or wood floors or adding a new deck, adding a hot tub or financing a new swimming pool.
Energy-efficient improvements. Solar panels, upgraded insulation, new windows and HVAC replacements reduce monthly utility costs and can add resale appeal — though ROI on solar specifically varies significantly by region.
Additions and extra space. Finishing a basement, adding a bedroom or building a deck all expand your usable square footage.
Comfort and lifestyle upgrades. Pools, home offices, smart home features and similar improvements may not maximize resale value, but they’re legitimate uses if you’re staying in the home long-term.
Eligibility requirements for a home improvement loan
Lenders vary, but most will look at these factors when you apply:
Credit score. This is the biggest factor. Most lenders want a score of 660 or above for competitive rates. Upstart is the exception, accepting scores as low as 300 — though lower scores mean higher rates.
Income. You’ll need to show you can afford the monthly payments. Lenders typically look at gross income and will ask for proof via pay stubs, bank statements or tax returns if self-employed.
Debt-to-income (DTI) ratio. This is your total monthly debt divided by your gross monthly income. Most lenders prefer a DTI below 43%, though some will go higher depending on your overall profile.
Employment history. Stable, consistent employment improves your chances. Some lenders, like Upstart, factor in employment history directly in their underwriting model.
Credit history. Beyond your score, lenders look at how long you’ve had credit, whether you’ve missed payments and how many different types of credit you carry. LightStream, in particular, wants to see several years of varied credit history.
Documentation. This typically includes a government-issued ID, proof of income and sometimes bank statements. Most online lenders have streamlined this to a quick upload process.
How to get a home improvement loan
Getting approved is usually faster than people expect, especially with online lenders. Here’s the general process:
Nail down your project budget. Get at least one contractor quote before you apply, so you know exactly how much you need. Borrowing too little can stall your project, while borrowing more than you need costs you in interest.
Check your credit score. You can check your score for free through many banks and credit card issuers. If your score is lower than you’d like, even a month or two of paying down balances can help before you apply.
Prequalify with multiple lenders. Most lenders, including SoFi and Upstart, offer soft-pull prequalification that shows you estimated rates and terms without affecting your credit. LightStream is the exception and requires a hard pull. Use prequalification to compare real offers before committing.
Compare APRs, not just monthly payments. A lower monthly payment can come with a much longer term and far more total interest paid. Always look at the APR and the loan’s total cost.
Gather your documents. Most online lenders ask for ID, proof of income and sometimes bank statements. Having these ready speeds things up considerably.
Submit your full application. This triggers a hard credit pull, which can temporarily ding your score by a few points. With most online lenders, you’ll get a decision quickly — often the same day.
Review and accept your offer. Read the loan agreement before signing. Check the APR, total repayment amount, any fees and your monthly payment. You’re not obligated to accept.
Receive your funds. Most online lenders deposit funds within one to two business days of signing. LightStream and SoFi both offer same-day funding if you complete the process early enough in the day.
Can I get a home improvement loan with bad credit?
Yes, but expect higher rates and likely an origination fee. Upstart is your best option among our picks for lower credit scores. You can also consider:
Improving your credit before applying — even 60–90 days of paying down balances can move your score meaningfully
Adding a co-borrower (SoFi accepts this)
Looking into government programs like HUD’s Title I loans, designed for lower-income homeowners
An FHA 203(k) loan if you’re purchasing and renovating simultaneously
How much do home improvement loans cost?
APRs typically range from about 6% to 36%, depending on your credit and the lender. Here’s a quick example of how term length affects total cost on a $25,000 loan at 7.99% APR:
Over 5 years: roughly $507/month, ~$5,400 in total interest
Over 10 years: roughly $304/month, ~$11,500 in total interest
Borrowing the same amount over twice as long roughly doubles your interest cost — so it’s worth choosing the shortest term your monthly budget can handle.
Home improvement loan pros and cons
Pros
No collateral required — your home isn't at risk
Fixed monthly payments make budgeting straightforward
Can fund projects that increase your home's value
Fast funding compared to equity-based options
Cons
Higher rates than secured loans for lower-credit borrowers
Monthly payments can be substantial on large loans with shorter terms
Not all renovations add dollar-for-dollar value to your home
Home improvement loan vs. home equity financing
Both can fund renovations, but they work very differently:
Personal loan (unsecured): No collateral required. Faster application and funding, often 24 hours. Lower maximum amounts (typically $100,000 or less). Works best for borrowers with good credit who want speed and simplicity.
Home equity loan or HELOC (secured): Uses your home as collateral. Potentially lower rates, especially for large amounts. Longer application process that typically requires an appraisal. If you miss payments, you risk foreclosure. Better suited for very large projects when you have significant equity.
One thing worth noting: if you have excellent credit, a personal loan can sometimes be cheaper than a home equity loan once you factor in closing costs and fees on the secured product.
How to get the most out of your remodel
Not all renovations pay off equally at resale. According to Zonda’s 2025 Cost vs. Value report — the industry benchmark for renovation ROI (return on investment) — exterior projects dominate the top returns, with several recouping more than double their cost. Interior projects like kitchen and bathroom remodels still deliver solid returns, but the bigger and more personalised the project, the lower the ROI tends to be.
Project
Job cost
Value at resale
Cost recouped
Garage door replacement
$4,672
$12,507
267.7%
Steel entry door replacement
$2,435
$5,270
216.4%
Manufactured stone veneer
$11,702
$24,328
207.9%
Fiber-cement siding replacement
$21,485
$24,420
113.7%
Minor kitchen remodel
$28,458
$32,141
112.9%
Vinyl siding replacement
$17,950
$17,313
96.5%
Backup power generator
$13,534
$12,902
95.3%
Wood deck addition
$18,263
$17,323
94.9%
Composite deck addition
$25,096
$22,199
88.5%
Fiberglass grand entrance
$11,754
$9,959
84.7%
Source: Zonda 2025 Cost vs. Value Report (costvsvalue.com), national averages
The takeaway: if resale value is your primary goal, curb appeal projects — doors, siding, stone veneer — offer the strongest returns. If you’re staying in the home long-term, interior remodels and additions still make sense for comfort and livability, even if the ROI percentage is lower. A new basement, for example, returned 71% nationally in 2025 — not as flashy as a new garage door, but it adds meaningful usable square footage.
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 I 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
It depends on the lender. LightStream requires good to excellent credit (generally 660+). SoFi does not publish a specific minimum credit score, and eligibility depends on your full financial profile. Upstart accepts scores as low as 300, though lower scores will typically mean higher rates and possible origination fees.
Most personal loans offer two to seven years. LightStream stands out with terms up to 20 years specifically for home improvement loans, which can significantly lower monthly payments on large projects.
If you need funds quickly, have good credit and your project costs under $100,000, a personal loan is often simpler and faster. A HELOC may offer lower rates if you have significant equity, but the application process takes longer and your home is on the line.
Generally, yes — repairs, remodels, energy upgrades, structural work, landscaping, pools and most other residential improvements are eligible uses. Most lenders just require that the funds go toward the purpose stated in your application.
Applying with a full application will trigger a hard credit pull, which can temporarily lower your score by a few points. Most lenders offer soft-pull prequalification that doesn't affect your score. Use that first.
Kat Aoki was a personal finance writer at Finder, specializing in consumer and business lending. She’s written thousands of articles to help consumers make better decisions on their home loans, bank accounts, credit cards, cryptocurrency and more. Kat is well versed in working with leading brands in the real estate, mortgage and personal finance industries, and her expertise has been featured on Lifewire and financial comparison sites like iSelect and realestate.com.au. She holds a BS in business administration from California State University, Sacramento and enjoys hiking and yoga in her spare time.
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Megan B. Shepherd is a personal finance expert and editor for loans and insurance at Finder.
Her personal finance expertise has been featured on Forbes, Nasdaq, MediaFeed, Fox News, Time, Reviews.com, and carinsurance.com, adding invaluable information related to personal loans, financial strategies and smart borrowing tactics.
Megan graduated from the University of Texas at Dallas with a BS in Business Administration with an entrepreneurial focus. She's worked as a certified financial adviser and has earned certificates of completion from A.D. Banker & Company.
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