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 loans and credit opportunities with lower interest rates or access to bonus offers.

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

Home Depot project loan at a glance

Product APR Rewards Repayment Term Draw Period Max. Amount
Home Depot Project Loan 7.99% fixed None 7 years 6 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. 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. The process is quick and easy, and it will not impact your credit score.

The bottom line

When your finances provide you with the flexibility to research a variety of loan types, you may still find yourself circling back to the Home Depot project loan option. A fixed 7.99% APR on an unsecured loan is a fair offer, and the range of loan sizes makes it possible to finance a smaller project or a major renovation. If tapping into your home equity for a quick upgrade seems unnecessary and you have plans to pay off the loan on an accelerated schedule, the Home Depot project loan is worth considering. As you review other loan types while making your decision, always reach out to local banks and credit unions to see if you can secure more favorable terms for the project you have in mind. If not, you can complete the project loan application online or in-store to find out how much credit you can access.

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