The Best Home Improvement Loans of 2021

With about half of U.S. homes built before 1980, home improvement is a common practice among homeowners looking to increase the value of their property. As homeowners put more money into projects like bathroom remodels, kitchen counter replacements and even tearing up the carpet to rejuvenate original hardwood floors, home improvement loans have become more popular. Home improvement loans help homeowners invest in their home by expanding for new family members or even getting more money back on their equity.

We reviewed the best home improvement loans in line with our SimpleScore methodology, which compares rates, loan amounts, fees, customer satisfaction and customer support.

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

Refreshing data.
We found results in California.
    In this article

      The 6 best home improvement loans of 2021

      Why trust The Simple Dollar?

      Why trust The Simple Dollar with your personal loan needs? Our reviews are trustworthy and evidence-based thanks to our proprietary SimpleScore methodology. The SimpleScore is used to assess each brand’s products and services to determine how consumer-worthy they are. The methodology takes five key metrics into account when determining the brand’s SimpleScore:

      • Fees assessed
      • Level of customer satisfaction
      • Customer support
      • Interest rates charged
      • Loan size

      Each category is assigned a score out five and then averaged to provide the final SimpleScore. To receive a 5 out of 5 score, the company would have:

      • Excellent customer satisfaction
      • Multiple channels of customer support
      • Little or no fees assessed
      • Low interest rate
      • Generous loan amounts

      [ Read: Best Personal Loans for Good Credit ]

      The best home improvement loans at a glance

      ProviderMinimum Credit ScoreAPRTermsLoan Amount
      SoFi670 or better5.99%–18.85%24–84 months$5,000K – $100K
      LightStreamUndisclosed2.49%–19.99% w/ Autopay24-144 months$5K–$100K
      Wells Fargo670 or better5.99%–24.49%12–84 months$3K–$100K
      Upstart580 or better8.94%–35.99%36–60 months$1K–$50K
      Marcus by Goldman Sachs660 or better6.99%–19.99%36–72 months$3.5K–$40K
      LendingClub600 or better8.05%–35.89%36–60 months$1K–$40K

      *Rates accurate as of April 2021

      Best overall – SoFi

      SoFi helps borrowers invest in their homes, but only credit score royalty may receive the best rates or even qualify.

      APR Range
      5.99%–18.28%
      Loan Amount
      $5,000-$100,000
      Term
      24–84 months
      SimpleScore
      4.8 / 5.0
      close
      SimpleScore SoFi 4.8
      Max APR 4
      Loan Size 5
      Terms 5
      Support 5
      Fees 5

      If you have average credit, SoFi is a great fit for your home improvement loan with large borrowing amounts and flexible terms. SoFi offers loan amounts up to $100,000, so it’s a great fit for more extensive projects, especially given its reasonable fixed rates. This is an online lender, so there are no physical locations to visit while closing your loan. While SoFi recommends a minimum credit score of 600, you can pre-qualify before you apply. There is no collateral or equity needed, and if you lose your job, SoFi will even pause your payments while you get back on your feet — a very important consideration since the arrival of COVID-19.

      SoFi Disclosure

      Fixed rates from 5.99% APR to 18.28% APR (with AutoPay). SoFi rate ranges are current as of October 5, 2020 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. 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.

      Best for good credit – LightStream

      LightStream offers competitive home improvement loan rates for customers who want to modernize, update and, well, streamline their homes.

      APR Range
      2.49%–19.99% w/Autopay
      Loan Amount
      $5K–$100K
      Term
      24–84 months
      SimpleScore
      4.8 / 5.0
      close
      SimpleScore LightStream 4.8
      Rates 5
      Loan Size 5
      Customer Satisfaction 4
      Support 5
      Fees 5

      Use a cosigner when applying with LightStream to benefit from low rates on your home improvement loan. LightStream is the online lender from SunTrust (soon to be Truist), so it comes with powerful backing. We love that there are no fees — you won’t suffer from late fees if you run a little late on your payment one month, and there are no origination fees, either. LightStream also offers the ability to add a co-signer, so if you have new or poor credit, you can still get the loan you need to repair your home.

      LightStream Disclosure

      Disclaimer: Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

      Payment example: Monthly payments for a $10,000 loan at 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66

      © 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.

      Best for existing customers – Wells Fargo

      Wells Fargo’s home improvement loans can help the investment in your home go far.

      APR Range
      5.99%–24.49%
      Loan Amount
      $3K–$100K
      Term
      12–84 months
      SimpleScore
      4 / 5.0
      close
      SimpleScore Wells Fargo 4
      Rates 5
      Loan Size 5
      Customer Satisfaction 3
      Support 4
      Fees 3

      Enjoy personalized care with an established bank that offers flexible loans. Wells Fargo offers plenty of loan options, including unsecured personal loans that do not require collateral and have no origination fees. This is fantastic for existing Wells Fargo customers since there’s an extra 0.25% loyalty discount. If you are not already a customer, you will need to apply in-person at one of its branches, but it won’t be a challenge since Wells Fargo is all over the U.S.

      Best for new credit – Upstart

      If having new credit is in the way of making your new house a home, try Upstart’s forgiving credit eligibility on home improvement loans.

      APR Range
      8.94%–35.99%
      Loan Amount
      $1K–$50K
      Term
      36–60 months
      SimpleScore
      3.4 / 5.0
      close
      SimpleScore Upstart 3.4
      Rates 2
      Loan Size 5
      Customer Satisfaction 4
      Support 3
      Fees 3

      Use your employment and education along with your credit score to receive a home improvement loan of up to $50,000. Funding is fast, sometimes as soon as the next day, when you qualify for Upstart’s loans. Its home improvement rates are about average, but they can climb pretty high if you don’t have good credit. You will face percentage-based origination fees, and you have the option to pay your loan off early without penalty. Borrowers with fair credit or limited credit history are encouraged to apply; the AI-based modeling by Upstart means it approves more loans with better interest rates than the traditional scoring method, which can allow those with bad credit to get a fair interest rate on their home improvement loan.

      Upstart Disclosure

      * The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart Platform will have an APR of 19% and 36 monthly payments of $35 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved. ** Estimated savings are calculated based on the credit profiles of all loans originated by Upstart-powered lenders using the Upstart Platform as of April 1, 2019 in which the funds were used for credit card refinancing. Estimated savings are calculated by deriving current credit card APR using minimum monthly payment and 1% of the principal balance. The estimated credit card APR is then compared to the accepted loan to determine median savings per borrower. To evaluate savings on a loan you are considering, it is important to compare your actual APR from your existing debt to the APR offered on the Upstart Platform. More than 303,000 loans have been originated on the Upstart platform as of July 1, 2019. Images are not actual customers, but their stories are real. † If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and in accordance with federal law. ‡ While most of our borrowers opt for automated recurring payment for ease of use, we also accept payments by check or one time electronic payments. Borrowers have the flexibility to choose the repayment method that works best for them. 9 out of 10 Upstart users surveyed internally reported that they would recommend Upstart. †† When you check your rate, we check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, we do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information will be reported to the credit bureaus. § Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5,100. The minimum loan amount in GA is $3,100.

      Best for no fees, ever – Marcus by Goldman Sachs

      We love that there are no fees and a great mobile app. However, to get a loan from Marcus, your credit can’t miss the mark.

      APR Range
      6.99%–19.99%
      Loan Amount
      $3.5K–$40K
      Term
      36–72 months
      SimpleScore
      5 / 5.0
      close
      SimpleScore Marcus by Goldman Sachs 5
      Rates 5
      Loan Size 5
      Customer Satisfaction 5
      Support 5
      Fees 5

      Enjoy the benefits of Goldman Sachs lending with no membership required. Marcus by Goldman Sachs offers impressively low APRs for your home improvement loan. Unlike Wells Fargo, you don’t have to be a Goldman Sachs customer to apply, and loans start as low as $3,500. The bank offers solid options if you need a small or medium-sized loan, but you will need a higher credit score to apply — a minimum credit score of 660 is recommended. You even receive access to the convenient mobile app for efficient lending.

      Marcus by Goldman Sachs Disclosure

      Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. The availability of a loan offer and the terms of your actual offer will vary due to a number of factors, including your loan purpose and our evaluation of your creditworthiness. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans). Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions.

      Best for average credit – LendingClub

      As one of the first peer-to-peer lenders in the industry, LendingClub created a pretty decent club of funding and borrowing, but the club fees can be steep.

      APR Range
      8.05%–35.89%
      Loan Amount
      $1K–$40K
      Term
      36–60 months
      SimpleScore
      3.2 / 5.0
      close
      SimpleScore LendingClub 3.2
      Rates 2
      Loan Size 5
      Customer Satisfaction 3
      Support 3
      Fees 3

      LendingClub’s network of investors funds your loans from multiple investors, making it easier to get the money you need. LendingClub really makes it easy to get a loan. With loan amounts starting at low as $1,000, you can apply on your own or with a cosigner to qualify. You can even perform a soft credit check, so you know your options before your credit is affected by the application process. Unfortunately, you pay for that flexibility, because LendingClub has the highest APR on our list and includes origination fees.

      LendingClub Disclosure

      All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage and history. The APR ranges from 8.05% to 35.89%. For example, you could receive a loan of $5,700 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. *The origination fee ranges from 1% to 6%; the average origination fee is 5.2% (as of 12/5/18 YTD).* There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.

      What is a home improvement loan?

      The life of a homeowner isn’t always easy, and it’s important to invest in your home — not only for quality of life, but also for the return on your investment. Home improvement loans can be used to make much-needed repairs not covered by insurance or to remodel outdated portions of your home.

      A home improvement loan is much like other kinds of loans. You borrow a set amount according to the lender’s terms and make payments in installments over time to repay both the original amount and the interest that accrues.

      There are some key things to look for, such as the minimum credit score that is required, any fees that your lender may charge and how quickly you can expect to receive funding.

      Are home improvement loans tax deductible?

      You may be able to take advantage of handsome tax benefits from the IRS if you used a home equity loan as a home improvement loan, leveraging the interest you pay on your home equity loan or home equity line of credit, claiming these payments as deductions on your annual tax filing. The IRS allows you to claim tax-deductible home improvement loans up to $375,000.

      Not all loans apply here, however. Specifically, personal loans used for home improvement are not tax-deductible.

      [Read: 4 Eco-Friendly Home Modifications That Can Lower Your Home Insurance Premium ]

      Types of home improvement loans

      • 203k rehab loans: This loan type is used when purchasing a home. Part of the loan amount is used to pay the purchase price while the rest is used to rehab the home. The work is completed using the 203k rehab loan and then once the home has been inspected, the loan can go to closing and the homeowners can begin the process of moving in.
      • Home equity loan: With a home equity loan, the homeowner uses the equity in their existing home to get a secured loan to use for whatever they wish. 
      • Cash-out refinance: With this loan type, the homeowner refinances their existing mortgage, taking out a portion of the equity as a “cash-out” option, increasing the total loan amount financed.
      • Personal loan: A personal loan is the same as a home improvement loan, the difference is the usage of the loan. Depending on the lender, one may have stricter criteria to meet, making one a better choice.
      • Construction loan: This loan type is used to finance the building of a new home or extension/renovation of an existing home. These loan types tend to have variable rates, so might not be a better deal than the best personal or home improvement loan.

      Home improvement loan uses 

      A home improvement loan is different from a personal loan because it’s earmarked for home-related expenses only. Here is a list of the possible home expenses people can use home improvement loans for:

      • Adding a pool or replacing an existing pool
      • Installing solar panels
      • Remodeling the kitchen, bathroom or another room in the house
      • Adding an addition onto the existing home
      • Upgrading appliances (hot water heater, kitchen appliances, furnace, etc.)
      • Replace or repair your roof, siding, or other exterior elements of the home

      Home improvement loans have strict guidelines for usage and cannot be used for:

      • Paying off debt
      • Financing college classes
      • Purchasing a car
      • Buying a second home or vacation home
      • To pay normal monthly bills

      When filling out an application for a home improvement loan, you will be asked to note on the application what the proceeds will be used for. Depending on the lender, they may ask for verification in the form of work orders, pictures, or receipts to prove the funds were used for qualifying expenses related to home improvements.

      [ Next: Homeowners Insurance Discounts Through Home Improvement ]

      What are the options for financing a home improvement project? 

      When financing a home improvement project, there are other options besides a home improvement loan. We outline a few of them above, but here are more details on financing your next home improvement project:

      • Cash: This is the easiest, quickest, and cheapest way to pay for your next home improvement project. However, depending on the expense of the project, it might not be feasible to pay in cash. Plus, it could deplete your savings, making you vulnerable during an emergency.
      • Credit card: A credit card is another easy way to finance a project, but with high variable interest rates compared to a fixed-rate loan, it’s probably the most costly. With revolving debt like credit cards, it can be hard to pay back the amount owed, and if your project is expensive, you may have to take out a loan down the road to pay it back, costing you even more.

      If you don’t have the cash lying around, it’s best to go the route of a fixed-rate loan over a credit card for home improvement projects. The payments are predictable and you can’t keep spending the available credit down like you can with a credit card.

      Pros and cons of home improvement loans

      Pros

      • Flexible financing. Home improvement loans can be used for almost anything in improving your home. New cabinets, new countertops, roofing, pool installments, patio renovation, bathroom remodeling and more all fall under home improvement. This makes home improvement loans a great option for making your house a home.
      • Fast cash. When your home needs emergency repairs, every minute counts. A home improvement loan gets you the cash you need quickly before the damaged property is ruined beyond repair.
      • Increase property value. Your home improvements can boost the value of your home, so your home improvement loan could act as an investment that could even help you pay off your loan over time.

      Cons

      • Watch the timing. Poor market timing could end up costing you significantly, so try to avoid taking out a home improvement during a recession or other times of economic trouble.
      • Your home is at risk. Depending on the type of home improvement loan that you decide to buy, your home may end up as collateral backing the loan. This means that if you miss or fall behind on payments, your house is at risk of foreclosure.

      How to find the best home improvement loan

      Before you apply for a home improvement loan, it is important to check your credit score so you don’t waste time applying to banks and online lenders unwilling to lend to you. When you have multiple inquiries on your credit report, it could damage your credit score and decrease your chances of a loan from other providers. Your home may also provide equity that you can use toward your home improvement loan application.

      When you apply, be sure to specify the purpose of your application; the more information the lender has about your project, the more likely it is that they will approve your application and do so quickly. Furthermore, do your research to ensure that you are asking for the appropriate amount. Asking for more than you actually need can end you in financial trouble or a lender denying your loan application.

      [ Related: Consider These 3 Things Before Getting a Home Equity Loan ]

      When you choose the right loan for you, your lender will provide you with a detailed list of terms and conditions for your loan. This will include the length of your loan, so you know when and how to pay it back.

      What is the best loan for financing home improvements?

      The best home improvement loan for you is going to depend on a number of factors, most notably how much do you intend to borrow. Your desired loan amount may narrow the field and limit the number of lenders that are available to provide the kind of loan that you need. While some lenders will offer a $100,000 loan, others may limit borrowing amounts to just $35,000.

      [ More: How Home Construction Loans Work ]

      You will also need to consider factors like the minimum credit score needed for each lender, the loan terms that determine how long you have to pay your loan back and, of course, the APR, so you know how much you will pay in interest over the life of the loan.

      How to apply for a home improvement loan

      1. Determine the best type of loan for you. With multiple options available, you’ll have to decide which type of financing best fits your needs and financial situation.
      2. Shop around for the best rates. The terms and interest rates on home improvement loans can vary widely depending on the type of loan. You can check your rates with multiple lenders, which will typically only result in a soft credit check. Once you have offers and pre-approvals, you can compare the best rates.
      3. Gather all of the necessary information. As with any other type of loan, applying for a home improvement loan requires you to present information such as your proof of income and credit score. For HELOCs, cash-out refinance and home equity loans, you will have to provide information on your mortgage, home value and more.
      4. Make a plan to pay it off. Regardless of the type of loan that you end up taking out, make a plan to pay it off as quickly as possible. Almost all types of lending will have interest attached, so it’s important to mitigate your financial loss in paying interest on your loan.

      [ Read: How to Get a Personal Loan with Fair Credit ]

      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

      Home improvement loan FAQs

      Depending on the type of loan you borrow, you may have some tax deductions coming your way. On loans against your home equity — so home equity loans, lines of credit, and cash-out refinances — you can deduct the interest on borrowed money used to renovate your home. To qualify, renovations must substantially improve your home. Repairs and cosmetic improvements usually aren’t eligible.

      Home improvement loans are best for those who plan to use the money to increase the value of their home. In these situations, the loan is an investment. You’re borrowing money now, and expect to see a return down the road when you sell your house. If your renovations or repairs won’t increase the value of the home, you might be better off waiting until you can pay cash.

      A home improvement loan is a broad term that describes any type of financing a homeowner might use to make improvements to their home. A home equity loan is a specific type of loan where a homeowner borrowers against the equity in their home. You put your home up as collateral in exchange for the money you’re borrowing.

      There are pros and cons to each of the different home improvement loan options. Some, like the home equity loan, home equity line of credit, and cash-out refinance, come with lower interest rates. But these also require you to put your home up as collateral. If you can’t pay back the loan, you could lose your house. While personal loans don’t require any collateral, they come with a much higher interest rate in return. Borrowers will have to decide for themselves which type of loan best fits their financial situation.

      We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

      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.

      Saundra Latham

      Contributing Writer

      Saundra Latham is a personal finance writer and editor. Her work has appeared in The Simple Dollar, Business Insider, USA Today, The Motley Fool, Livestrong and elsewhere.

      Reviewed by

      • Courtney Mihocik
        Courtney Mihocik
        Loans Editor

        Courtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to Interest.com, PersonalLoans.org, and elsewhere.