Home Depot Project Loan Review

A Home Depot project loan provides customers with a line of credit up to a $55,000 maximum for financing a home improvement project. If you want a kitchen remodel or to upgrade a bathroom, the loan makes it possible to swipe a card at Home Depot to purchase the items needed to complete your project. A fixed 7.99% annual percentage rate may match your other interest rate options in the unsecured loan category, particularly if you have average or good credit. For consumers with exemplary credit or traditional credit cards with low APRs and high limits, there are other personal loans and credit opportunities with lower interest rates or access to bonus offers.

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In this article

    Home Depot project loan at a glance

    ProductAPRRewardsRepayment TermDraw PeriodMax. Amount
    Home Depot Project Loan7.99% fixedNone7 years6 months$55,000

    What we like about it

    The Home Depot project loan provides convenient access to a line of credit with a fixed interest rate. This makes it easy to review what future monthly payments would be if the line of credit is tapped out or if you opt to use only a portion of the available credit. The fixed 7.99% APR is a competitive rate for qualifying buyers with a good credit score in the 630 to 739 range. Even if you have a higher credit score, the ability to borrow up to $55,000 without collateral could be of benefit. The project loan does not charge prepayment penalties, meaning you can pay off the loan faster and reduce the total amount of interest charged.

    Things to consider

    For home remodel enthusiasts with better credit, there are likely better loan options. These can include obtaining a home equity loan to finance improvements. While the 7.99% APR is competitive, the cost of interest still adds up over the life span of a seven-year loan. Borrowing only $2,500 leaves you spending $776 on interest while a maximum loan of $55,000 would require paying $16,988 in interest — not counting the cost of interest-only payments during the initial six-month period.

    A high-limit credit card with a promotional or introductory offer could finance many projects with a lower interest rate or no interest rate. This reduces your overall cost of borrowing but would require repayment within the promotional period, such as two years. Unlike a credit card, the project loan features no promotional offers and no potential to earn cash back or other rewards on your purchase.

    Another potential downside is the six-month window for purchases. Unlike many credit lines, this one shuts down purchases after the window passes. This means additional improvements to your home will require additional applications for credit.

    Home Depot project loan features

    If you have a firm grasp on your remodel needs when you apply for the loan, the initial six-month window should be sufficient to see a project through to completion. The window lets you buy all the fixtures, tools and hardware you need for the upgrades and then the goods you didn’t know you needed. For the introductory period, interest-only payments are allowed. After six months, you start attacking the balance. The loan features a fixed 7.99% APR as of December 2019 and finances your balance for seven years no matter the size. Loans can reach $55,000 based on your credit score, credit utilization and other factors. Loans are provided through GreenSky LLC.

    By comparison, a Wells Fargo unsecured loan for $55,000 financed over 84 months would carry an APR of 8.74% to 11.74% for borrowers with an excellent credit score of 760 and above. A loan period of 48 months or less is required to start reaching comparable rates of 7.74% to 10.74%. A 5.49% APR is possible with a 36-month term.

    A home equity loan provides the best option for low interest rates. For example, U.S. Bank offers APRs ranging from 3.90% to 8.20% on a home equity line of credit. A 4.74% variable rate is most commonly quoted. It is important to note that establishing a home equity loan or line of credit can require the payment of origination fees or closing costs, but many lenders do not charge these fees.

    Home Depot project loan help and support

    Home Depot project loans are managed through a customer portal where payments can be scheduled and auto-pay options established. The loan program provides a customer support email at service@thdloan.com. A toll-free customer service number of 1-877-476-3860 is staffed from 6 a.m. to 1 a.m. EST Mondays through Saturdays and from 8 a.m. to 1 a.m. on Sundays. You can apply for the loan in-store with a Home Depot associate or online.

    Is a Home Depot project loan worth it?

    The Home Depot project loan can carry a hefty price tag if you string out payments over the full seven-year period provided by the lender. By paying off the loan early, you can reduce your overall interest costs and maximize the 7.99% fixed interest rate. For borrowers with good credit, the interest rate is competitive, making the loan a good option while those looking for a bad credit personal loan should compare other options. When you have high earnings or excellent credit, the extended line of credit to use for six months may provide more value than a traditional loan while a remodel is in progress. It limits the need to strictly to estimate costs upfront and allows room for improvisation while upgrading your kitchen or expanding a bedroom.

    Check Your Personal Loan Rates

    Answer a few questions to see which personal loans you pre-qualify for. It’s quick and easy, and it will not impact your credit score.

    Get Started

    with our trusted partners at Bankrate.com

    Methodology

    SimpleScore

    The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.

    For every review, our editorial team:

    • Identifies five measurable aspects to compare across each brand
    • Determines the rating criteria for each aspect score
    • Averages the five aspect scores to produce a single SimpleScore

    Here’s a breakdown of the five aspect scores and their rating criteria for our review of the best personal loans of 2020.

    Why do some brands have different SimpleScores on different pages?

    To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.

    However, it’s also possible for the same product from the same brand to have multiple SimpleScores. For instance, if we compare NetCredit’s personal loans according to our criteria for the best personal loans, it scores a 2.3 out of 5. But when we compare NetCredit according to the criteria for the best bad credit personal loans, it scores considerably higher, since the criteria for the latter review are more lenient (lenders who serve borrowers with bad credit will always offer higher rates, so we needed to adjust our category methodology to account for different industry standards).

    Questions about our methodology?

    Email Hayley Armstrong at hayley@thesimpledollar.com.

    Rates

    We looked at the maximum APR for each lender — the lower their maximum rate, the higher their score.

    Loan Size

    We awarded higher scores to lenders with more generous loan sizes.

    Customer Satisfaction

    We leveraged the J.D. Power 2019 Personal Loan Satisfaction Study℠ to see how customers rated their experience with each lender. (If a lender wasn’t included in J.D. Power’s study, we skipped this aspect and averaged the four remaining aspect scores.)

    Support

    We awarded higher scores to lenders with the most channels for customer support.

    Fees

    We looked at the three most common fees — origination, late payment, and pre-payment — and penalized lenders for each fee charged.

    Ashley Mott

    Contributor for The Simple Dollar

    Ashley Mott is a full-time journalist with over 10 years of experience in small business management. Her work has been featured in USA Today and at Chron.com, The Knot, Yahoo! Finance and the San Francisco Chronicle.