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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.
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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.
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.
Avant makes it possible to buy a reasonable home improvement loan even if you have bad credit. If you have bad credit, Avant offers a reasonable solution to your home improvement loan without adversely impacting your credit situation. Avant allows you to perform a soft credit inquiry without risk to your credit score, and there’s no home equity required. An extra administrative fee can tack on up to an additional 4.75% to your total loan, but you can receive funding as soon as the next day, which can be a lifesaver when you find yourself in a jam during the home improvement process.
The actual loan amount, term, and APR amount of loan that a customer qualifies for may vary based on credit determination and state law. Minimum loan amounts vary by state. Avant branded credit products are issued by WebBank, member FDIC.
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.
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
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.
Use your employment and education along with your credit score to receive a home improvement loan of up to $35,000. 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. However, $30,000 may not be enough for a full home remodel, but could get you a bathroom renovation and a new kitchen.
* 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.
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.
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.
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.
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 10.68% 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 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.
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.
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.
Shoddy Service It’s essential that you choose the right partners to help you with your home improvement loan. This includes everyone, like the perfect lender who offers an affordable rate and the professional contractors you choose to perform and guarantee your renovations.
How to find the right home improvement loan?
Before you apply for a home improvement loan, it is important to first know where you stand. Be sure to check your credit score so you don’t waste time applying to banks and online lenders who will be unable to help 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 were asking for the appropriate amount. Asking for more than you actually need can end you in financial trouble or a lender denying your loan amount.
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.
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.
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 wonders will offer a $100,000 loan, others may limit their borrowing amounts to just $35,000.
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 interest you will pay on the total loan over time.
Too long, didn’t read?
No matter what kind of home improvement loan you need, there is likely a provider out there for you. Even borrowers with poor or new credit can find a loan that works for both their needs and their income. It’s important to consider not only the APR on your loan but also the loan terms and how much money is available to borrow.
We welcome your feedback on this article and would love to hear about your experience with the home improvement loans we recommend. Contact us at firstname.lastname@example.org with comments or questions.
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).
We looked at the maximum APR for each lender — the lower their maximum rate, the higher their score.
We awarded higher scores to lenders with more generous loan sizes.
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.)
We awarded higher scores to lenders with the most channels for customer support.
We looked at the three most common fees — origination, late payment, and pre-payment — and penalized lenders for each fee charged.
Courtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for Interest.com, PersonalLoans.org, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.