Did you just binge-watch all of Property Brothers and Fixer Upper and now you’re thinking: “I could redo my entire bathroom, no problem!” Well, you’ll likely find that, despite your positive attitude, you’ll need to hire out your home improvement project – or at least have family and friends help out.
Construction gets expensive, and if you don’t have enough cash on hand or savings in the bank, a personal home improvement loan is one of the easiest ways to finance a project. There are loan amounts for every estimate, whether you need a quick appliance fix or you’re gearing up for a long-term renovation.
A quick start for comparing home improvement loans
Overview of the best personal loans for home improvement loans
Lender Best for Loan amounts APRs
Fiona Fair credit $1,000-$100,000 Varies by lender
LendingTree Comparison shopping $1,000-$50,000 6%-35%
Credible Personal Loans Range of funding amounts $1,000-$100,000 starting at 3.99% APR (with AutoPay)*
Figure Cash out refinancing Up to $500,000 Varies by mortgage rate
SoFi APRs $5,000-$100,000 5.99%-18.83% (with AutoPay)
- Loan amounts – $1,000-$100,000.
- Minimum credit score – 580.
- APRs – Varies by lender.
- Fees – 1%-6% origination fee.
- Repayment terms – 24 to 80 months.
Fiona is designed to give middling-credit borrowers personal loan options. Fiona has a lower credit score cutoff than most lenders offering similar APRs, and it promises quick funding as soon as the next business day.
Like Credible, Fiona provides loans in both small and large amounts. Qualifying borrowers can also score an industry-leading APR of 3.84%.
- Loan amounts – $1,000-$50,000.
- Minimum credit score – 600 (recommended, varies by lender).
- APRs – 6%-35%.
- Fees – They vary by lender.
- Repayment terms – 3 to 7 years.
LendingTree is a “matchmaker” site, not a lender itself—once you enter some basic info, the site connects you to trustworthy lenders so you can compare their terms and find the home improvement loan that works best for you.
I matched with three options from three lenders, all with different amounts, APRs, and monthly payments. You’re not obligated to accept any of LendingTree’s offers, but they work with enough partners that you’re likely to have a lot of options.
Credible Personal Loans
- Loan amounts – $1,000-$100,000.
- Minimum credit score – 600.
- APRs – starting at 3.99% APR (with AutoPay)*.
- Fees – 0% to 8% origination fee.
- Repayment terms – 2 to 8 years.
Credible is another loan marketplace that works with reputable lenders. Most sites say they can get you the best possible rates, but Credible goes a step further: they’ll give you $200 if you find a lower rate on a competitor site. And some, though not all, lenders in Credible’s wheelhouse offer loans as high as $100,000. There are a variety of smaller amounts for less intensive projects, giving lenders lots of flexibility.
- Loan amounts – up to $500,000.
- Minimum credit score – 620.
- APRs – They vary based on the current mortgage rate.
- Fees – 2% origination fee, 5% late payment fee, $65 flood monitoring fee, $65 tax monitoring fee, $45 tax status research fee, $20 overdraft fee.
- Repayment terms – 30 years fixed term.
If mortgage rates are low, you might want to explore a cash-out refinance (where you borrow a new, slightly higher mortgage and use the extra “cash out” for your home renovations) rather than a personal loan. Figure’s expertise is in mortgage and cash-out refinancing, as well as home equity lines of credit (HELOCs).
The refinancing options give you plenty of cash to work with; you can borrow up to 80% of your home’s value or up to $500,000, though you can always borrow less if you don’t need that much.
- Loan amounts – $5,000-$100,000.
- Minimum credit score – 680.
- APRs – 5.99%-18.83% (with AutoPay).
- Fees – None.
- Repayment terms – 2 to 7 years.
SoFi is a respected name in the lending business, offering loans for all kinds of purposes, including home renovations. The APRs are astonishingly low starting at 5.99%, and with fixed interest rates, a good-credit borrower can save a ton of money. The $100,000 maximum will fund more extensive projects, and you won’t accumulate fees since SoFi doesn’t charge them.
Summary of the best personal loans for home improvement loans
Lender Best for Minimum credit score Loan amounts APRs Funding speed Origination fee Repayment terms
Fiona Fair credit 580 $1,000-$100,000 Varies by lender Varies by lender 1%-6% 2 to 7 years
LendingTree Comparison shopping 600 $1,000-$50,000 6%-35% Varies by lender Varies by lender 3 to 7 years
Credible Personal Loans Range of funding amounts 600 $1,000-$100,000 starting at 3.99% APR (with AutoPay)* Next business day 0%-8% 2 to 8 years
Figure Cash out refinancing 620 Up to $500,000 Varies by mortgage rate 20 days 2% 30 years
SoFi APRs 660 $5,000-$100,000 5.99%-18.83% (with AutoPay) Within a week None 2 to 7 years
How I came up with this list
There are lots of loans on the market that can be used for home improvement, so I looked for lenders who offered certain must-haves.
Fixed interest rates
Each lender offers fixed APRs or interest rates, which stay the same over the life of the loan (as opposed to variable interest rates that go up or down based on the housing market). You don’t have to worry about fluctuating rates over the years; your monthly payments will stay consistent unless you need to make a change.
No collateral required
One of the best perks of using personal loans for home improvement is that these loans are unsecured – meaning you don’t have to use your house or other personal assets as collateral if you can’t pay.
Besides those pesky late payments or overdraft fees, these lenders are remarkably fee-light. Only a few charge origination fees and some don’t add fees at all.
Small and large loan amounts
Whether you need a quick $500 appliance fix or a $100,000 multi-room addition, it’s important to borrow only as much as you need and to make sure you have enough to get the job done. All these lenders offer a range of funding amounts.
How a home improvement loan works
Most lenders will offer personal loans that borrowers can use for various purposes, including home and property repairs. Some companies, like LightStream, have specific interest rates and terms for home improvement loans—but many other lenders put home renovations under the large umbrella of “personal loan” needs.
This means the requirements won’t be as strict as they are for other home repair funding sources. You won’t need a formal home appraisal, and you can spend the money on other necessities if your circumstances change.
Since home improvement loans are unsecured, you don’t have to “secure” the loan by promising your house as collateral (and possibly losing the house if you fail to pay). Instead, as with most personal loans, nonpayment will hurt your credit rating. Timely payments, on the other hand, will boost your credit. The one downside to unsecured loans is that APRs tend to be higher.
Other ways to finance home repairs
Home equity loans
If you have lots of home equity – the value of your home minus the amount you have left to pay on your mortgage – you might consider a “second mortgage” or home equity loan. Generally, the more equity you have, the more you’re eligible to borrow. In most cases, you can only borrow up to 80 to 90% of your property’s value.
It’s important to remember this type of loan is secured, so you’re required to put up your home as collateral. APRs are usually lower than personal loan rates, however, and home equity loans have fixed interest.
Home equity line of credit (HELOC)
Home improvement loan amounts generally don’t go higher than $100,000 or extend repayment terms beyond 12 years. For those who need larger sums, a home equity line of credit (HELOC) lets you borrow much more — up to the amount of equity you have in your home. And you can take as long as 20 years to repay.
HELOCs work best to cover the longest-term projects. Rather than borrowing a lump sum and repaying it over time, you can borrow from your HELOC as needed (and only repay the amount you borrow).
But there are a few downsides. These are secured loans, so you’ll need to pledge your house. Interest rates are variable, rising and falling with the market, which means an initially low APR won’t last for the life of the loan. The rates are still lower than most credit card lenders, though.
Title 1 loan
For borrowers without much or any equity in their home, the Federal Housing Administration (FHA) in the United States offers modest amounts (up to $25,000) as Title 1 government loans. Though the program is a federal one, private lenders furnish the funds.
You’ll have to meet income, credit, and down payment requirements to qualify for one of these loans, but they can be affordable options for new homeowners.
You can, of course, skip the loan application route and put your repair expenses on an existing credit card or two. This financing method works best for smaller projects where you have a plan to pay the full amount relatively quickly. Credit card interest rates are much higher than personal loan rates, and if you’re already paying down credit card debt, you don’t want to add more.
Cash-out refinancing or mortgage refinancing
Cash-out refinancing is a smart way to get home repair funds if you meet a few conditions:
- You’re comfortable taking on the risk of a secured loan.
- You have some equity in your home already.
- Your renovations will improve the home’s resale value.
- The mortgage rates are lower than what you’re currently paying.
A cash-out refinance is essentially a new mortgage loan. You borrow the amount left on your old mortgage plus the extra amount you need for renovations, which you get as “cash-out” in a lump sum. Generally, you can borrow up to 80% of the equity in your home.
A new loan comes with a new interest rate, which means you can lock in a lower mortgage rate than you started with. Lenders may let you adjust your mortgage loan term as well, so you can make lower interest payments over a shorter period of time.
Who should get a home improvement loan?
- Owners who plan to sell. Upgrades and repairs can make a huge difference in the price you can ask for when the house goes on the market.
- Owners without much equity in their homes. Other financing options, like HELOCs, require a decent amount of home equity. If you’re a newer homeowner without a history of mortgage payments, a personal loan will be easier.
- Borrowers with good to excellent credit. Homeowners with weaker credit can still find a flexible lender, but they’re likely to pay higher APRs – particularly since most home improvement loans don’t let you refinance.
- Borrowers who want a short repayment period. Want to get repayments out of the way as soon as possible and save on interest? Most personal loans come with potential repayment periods lasting only a few years.
Who shouldn’t get a home improvement loan?
- Owners who need more than $100,000 for renovations. If you need to drop major cash on home construction, a personal loan might not provide all you need – and you’ll have less time to repay the full amount.
- Owners who can fund repairs themselves. Don’t take on more debt if you don’t have to.
- Owners concerned about their ability to repay. You may need to build up more savings or wait a while before starting repairs; only borrow once you’re sure you can keep up with payments.
Any of these lenders will help get your home renovation off the ground – and they’re available to a variety of borrowers, not just the ones with stellar credit. If you’ve got a project in mind, take some time to shop around for the best rates.¹ For Figure Home Equity Line, APRs can be as low as 2.49% for the most qualified applicants and will be higher for other applicants, depending on credit profile and the state where the property is located. For example, for a borrower with a CLTV of 45% and a credit score of 800 who is eligible for and chooses to pay a 4.99% origination fee in exchange for a reduced APR, a five-year Figure Home Equity Line with an initial draw amount of $50,000 would have a fixed annual percentage rate (APR) of 2.49%. The total loan amount would be $52,495. Your actual rate will depend on many factors such as your credit, combined loan to value ratio, loan term, occupancy status, and whether you are eligible for and choose to pay an origination fee in exchange for a lower rate. Payment of origination fees in exchange for a reduced APR is not available in all states. In addition to paying the origination fee in exchange for a reduced rate, the advertised rates include a combined discount of 0.75% for opting into Credit Union Membership (0.50%) and enrolling in autopay (0.25%). APRs for home equity lines of credit do not include costs other than interest. Property insurance is required as a condition of the loan and flood insurance may be required if your property is located in a flood zone.