8 Best Home Improvement Loans

Compare home improvement loans to finance your renovations and repairs

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Making upgrades or the right repairs to your home can often be a wise investment, adding considerably to its resale value (not to mention its comfort, style, and looks). Unfortunately, people often can’t afford big property projects without taking out a home improvement loan.

Whatever sort of task you want to tackle, it probably won’t be cheap: The average kitchen remodel in the United States costs more than $23,000. Bathroom remodels average $21,000. Even a simple 16 x 20-foot wood deck could set you back more than $14,000.

If you’re looking for financing to cover a home renovation or home repair costs, you’re in luck. We’ve done a lot of the legwork for you—comparing interest rates, fees, terms, and other factors you should consider. Here are our picks for the best home improvement loans currently available.

Best Home Improvement Loans of March 2021

Best Overall : SoFi

SoFi

Online lender SoFi offers personal loans for home improvement (among other financial products). With fixed rates starting at 5.99% and a maximum loan amount of $100,000, SoFi's financing could fit a variety of renovation jobs—even extensive ones. In addition to its attractive interest rates and generous sums, SoFi offers borrowers the option to pre-qualify in advance, checking terms without incurring a hard credit inquiry. And, it does not charge late fees, pre-payment fees or origination fees.

Pros
  • No home equity or collateral requirements to borrow

  • Option to pause your payments temporarily if you lose your job

  • Soft credit check displays potential rates and terms before you officially apply

Cons
  • It takes considerable time to receive funds–loans typically fund within a week

  • Good credit recommended to qualify

  • Better interest rates may be available elsewhere if you have excellent credit

Other important information:

  • Maximum/minimum amount you can borrow: $5,000 (in most states) to $100,000
  • APR range: 5.99%–20.69% (with AutoPay discount—invoicing option 0.25% higher)
  • Fees: None
  • Minimum recommended credit score: Reported to be 680, but not disclosed on website
  • Other qualification requirements: SoFi will consider your credit history, income, and employment status in your loan application.
  • Repayment terms: 2 to 7 years
  • Time to receive funds: Typical funding can take up to a week, from loan approval to the receipt of funds.
  • Restrictions: You must be 18 or older and a U.S. citizen (or Permanent Resident or visa holder) to qualify for a personal loan. Mississippi residents are ineligible for a SoFi loan.
  • Notes: While SoFi allows multiple personal loans for individuals, Michigan residents can only have one SoFi personal loan at a time.

Read the full review: SoFi Personal Loans

Best for Bad Credit : Avant

Avant

If you need a personal loan for home improvement but your credit rating is less than stellar, Avant may be worth considering. With APRs starting at 9.95% and an administrative fee of up to 4.75%, this online lender "for middle-income borrowers" doesn’t offer the most affordable financing option for home improvements. Yet when you compare its terms to those offered by others open to subprime borrowers, Avant starts to look a lot more attractive.

Pros
  • No home equity required to qualify

  • Funding as soon as the next business day

  • A soft credit inquiry (with no credit score impact) tells you if you prequalify

Cons
  • An administrative fee of up to 4.75% could increase the cost of your loan

  • Lower interest rates may be available through other lenders

  • Relatively low maximum loan amount

Other important information:

  • Maximum/minimum amount you can borrow: $2,000 to $35,000
  • APR range: 9.95%–35.99%
  • Fees: Administration fee may be as high as 4.75%. Late fee of $25 charged when a payment is 10 days past due. A $15 fee is assessed for returned payments.
  • Minimum recommended credit score: Reported to be 580, but Avant states that most customers have a credit score between 600–700.
  • Other qualification requirements: In addition to your creditworthiness, Avant will consider your income and employment status when you apply for financing. You must submit proof an active personal checking or savings account. If self-employed, you’ll also need to submit your 2 most recent tax returns with your loan application.
  • Repayment terms: 24 to 60 months
  • Time to receive funds: You’ll typically receive a direct deposit of your loan funds by the next business day (if your application is approved by 4:30 p.m. CT on a weekday)
  • Notes: The actual loan amount, term, and APR amount of loan a customer qualifies for may vary based on credit determination and state law. Minimum loan amounts vary by state. The minimum loan amount in MA is $6,400.

Read the full review: Avant Personal Loans

Best Rates : LightStream

LightStream logo

LightStream is an online lending division of Truist (the result of a merger between SunTrust Bank and BB&T). For borrowers with good to excellent credit, annual percentage rates on home improvement loans start at 3.99% and the lender charges no fees. Well-qualified applicants may be able to borrow as much as $100,000 with no home equity requirements.

Pros
  • Low rates starting at 3.99% (with AutoPay)

  • Funding potentially as soon as same day

  • No home equity requirements or appraisals needed

Cons
  • No pre-approval option (with soft credit pull) available

  • Tough to qualify without several years of good-to-excellent credit history

  • 3.99% APR only applies to loans of $10,000 to $24,999

Other important information:

  • Maximum/minimum amount you can borrow: $5,000 to $100,000
  • APR range: 3.99%–16.99% (with AutoPay discount—invoicing option 0.50% higher)
  • Fees: None (Note: For Florida residents, a documentary stamp tax may apply.)
  • Minimum recommended credit score: Reported to be 680 (though not confirmed on LightStream’s website)
  • Other qualification requirements: LightStream caters to borrowers with good to excellent credit. If you have several years of credit history and a mixture of account types on your credit report (credit cards, installment loans, mortgage, etc.), you may be in luck. LightStream will also consider your ability to save, your income, and your current debts. 
  • Repayment terms: 2 to 12 years 
  • Time to receive funds: Funds may be deposited into your bank account the same day you apply for a loan.
  • Restrictions: LightStream won’t issue loans to cover education costs, to refinance existing LightStream loans, or to be used by a business.
  • Notes: The loan terms, including APR, may differ based on loan purpose and credit profile. The maximum APR for a LightStream loan is 20.49%. Rates and terms are subject to change without notice. As part of its Rate Beat Program, Lightstream will offer a rate that is 0.10% lower than that of a competing lender if you provide proof that you have been approved for a loan at a lower rate from another lender by 2 p.m. ET 1 business day prior to your loan funding.

Read the full review: LightStream Personal Loans

Best Brick-and-Mortar Lender : Wells Fargo

Wells Fargo Logo

Wells Fargo offers multiple ways to finance home improvement projects, including unsecured personal loans. If you choose an unsecured loan, you won’t need to put up any collateral, like the equity in your home, to secure financing. Wells Fargo is also a brick-and-mortar bank, with thousands of branches around the U.S, which might appeal to those who like to discuss financing options in person, with a human.

Existing Wells Fargo customers may be able to secure a lower interest rate on their home loans. If you already have a qualified personal Wells Fargo checking account (and you use it to make automatic payments), you may score a 0.25% relationship discount off your interest rate. The lender’s APR for an unsecured personal loan starts at a low 5.74% and there are no origination or prepayment fees.

Pros
  • Unsecured personal loans for home improvement available

  • Loan amounts as small as $3,000 available

  • Three application options: online, over the phone, or at a branch

Cons
  • Application process could take some time if the bank wants more documents

  • Hard credit inquiry may be required to learn if you qualify and discover your rate

  • Must already be a Wells Fargo customer to apply online or via phone

Other important information:

  • Maximum/minimum amount you can borrow: $3,000 to $100,000
  • APR range: 5.74%–24.49% (with 0.25% relationship discount)
  • Fees: No origination fees or pre-payment penalties. Late fees or returned payment fees may be assessed.
  • Minimum recommended credit score: Not disclosed, but the Wells Fargo Rate and Payment Calculator indicates that you might qualify for a loan with a credit score as low as 620.
  • Other qualification requirements: Your credit, income, and expenses (aka your debt-to-income ratio) will all be assessed to determine if you’re eligible for a loan.
  • Repayment terms: 12 to 84 months (12 to 36 months for loans under $5,000)
  • Time to receive funds: Once your application is approved, personal loan funds may be available by the next business day.
  • Restrictions: You must either be a U.S. Citizen or Permanent Resident to qualify.

Read the full review: Wells Fargo Personal Loans

Best for Lack of Credit History : Upstart

Upstart Logo

Upstart takes a unique approach to lending that may help borrowers qualify for a more affordable loan, particularly borrowers without much credit history. The lending platform, founded by a group of former Google employees, has created an application process that considers not just your credit, but also your education and job history in determining how risky a prospect you are, and thus what sort of rate you qualify for.

The average home improvement loan from Upstart is a manageable $11,700. Unfortunately, Upstart credit may come with an origination fee of up to 8%, and this fee comes directly out of your proceeds before you receive the funds. On a $10,000 loan, the origination fee could be as high as $800.

Pros
  • You might qualify for a lower interest rate based on your education or job history.

  • Initial soft credit pull can help you check your rate without hurting your credit. 

  • Borrowing flexibility with loan amounts from $5,000 to $50,000 in most states

Cons
  • Origination fee as high as 8%

  • Average APR is 25.79% on a 3-year loan

Other important information:

  • Maximum/minimum amount you can borrow: $1,000 to $50,000, based on credit, income, and other information considered in your application.
  • Typical APR range: 8.27%–35.99%
  • Fees: Possible origination fee of 0% to 8%. Late fees are 5% of the past due balance or $15, whichever is greater. Returned check and ACH fees are $15. There is no pre-payment penalty.
  • Minimum recommended credit score: 600
  • Other qualification requirements: You must be at least 18 years old, with a valid Social Security number and valid email address. Your credit report cannot show any bankruptcies, currently past-due accounts, or more than 6 inquiries in the last 6 months. Even if you lack credit history to produce a FICO score, your debt-to-income ratio must fall within an acceptable range. Finally, you must have be employed full-time or enlisted in the military.
  • Repayment terms: 3 or 5 years
  • Time to receive funds: Funds may be available as soon as the next business day, once you accept your offer, or 2 days if you accept after 5 p.m. ET.
  • Restrictions: Loans unavailable to residents of Iowa or West Virginia, or anyone without a U.S. residential street address (outside of the military.)
  • Notes: Minimum loan amounts vary by state. The minimum loan amount in MA is $7,000. The minimum in Ohio is $6,000. The minimum in NM is $5,100. The minimum loan amount in GA is $3,100.
    Proceeds used to fund education-related expenses are subject to a wait period of 3 business days between acceptance and funding in accordance with federal law.
    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 25.16% and 36 monthly payments of $37 per $1,000 borrowed.
    When you check your rate, the initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, there will be 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.

Read the full review: Upstart Personal Loans

Best for Veterans : USAA

USAA

USAA was founded in 1922 and is a bank that serves the military community. The bank offers many benefits to their members, including personal loans at competitive rates. Loan amounts start at $2,500 and rates starting at 7.24%—requirements include restrictive membership requirements and the fact that you need a USAA Bank account.

Pros
  • Has one of the longest repayment terms compared to other lenders

  • Funding as soon as the next day

  • Rate discount for those who opt to autopay

Cons
  • Membership and USAA Bank account required for a personal loan

  • Relatively low maximum loan amount

  • No prequalification option

Other important information:

  • Maximum/minimum amount you can borrow: $2,500 to $20,000
  • APR range: 7.24%–12.99%
  • Fees: No application fees or pre-payment penalties
  • Minimum recommended credit score: It is reported that USAA accepts subprime borrowers with scores as low as 600, but no minimum credit score is disclosed on the website.
  • Other qualification requirements: USAA membership
  • Repayment terms: 12 to 84 months
  • Time to receive funds: Within 24 hours to your USAA Bank account
  • Restrictions: Open to residents in all 50 states. Only those who are USAA members with a USAA Bank account can receive a personal loan.
  • Notes: Financing for 12- to 36-month term requires a loan amount of $2,500 or greater. Financing for 48-month term requires a loan amount of $5,000 or greater. Financing for 60-month term requires a loan amount of $10,000 or greater. Financing for 72-month term requires a loan amount of $15,000 or greater. Financing for 84-month term requires a loan amount of $20,000 or greater.

Read the full review: USAA Personal Loans

Best for Small Loans : PenFed Credit Union

PFCU

PenFed Credit Union offers personal loans as low as $600. Rates start at 6.49% with no origination fees. Applicants need to be a member of the credit union—joining the National Military Family Organization or the Voices for America's Troops for $17 each will suffice.

Pros
  • Offers competitive rates for those who don’t have stellar credit

  • Applicants can take out lower personal loan amounts

  • No origination fees or pre-payment penalties

Cons
  • Borrowers need to meet membership requirements to apply for a loan

  • No prequalification option available

  • Relatively low maximum loan amount

Other important information:

  • Maximum/minimum amount you can borrow: $600 to $20,000
  • APR range: 6.49%–17.99%
  • Fees: No origination fee or early repayment fee. There is a $30 charge for a returned payment and a $20-25 charge for late payments.
  • Minimum recommended credit score: Not disclosed. Those with excellent credit history will be eligible for the best rates.
  • Other qualification requirements: PenFed will take your income, debts and credit history into consideration, including your co-borrower’s if submitting a joint application.   
  • Repayment terms: 6 to 60 months
  • Time to receive funds: Could be as fast as the next business day
  • Restrictions: Borrowers need to become a member of the credit union

Read the full review: PenFed Federal Credit Union Personal Loans

Best for Fair Credit : Peerform

PF

Peerform is a peer-to-peer lending platform offering competitive loan rates for those with credit scores as low as 600. Origination fees range from 1% to 5% and loan amounts start at $4,000.

Pros
  • Peerform doesn’t charge a prepayment penalty

  • Borrowers with a short credit history may qualify for a loan

  • Prequalification option available

Cons
  • The lender charges a minimum 1% origination fee

  • Minimum loan amount is high compared to other lenders; maximum loan amount is relatively low

  • No cosigner option available

Other important information:

  • Maximum/minimum amount you can borrow: $4,000 to $25,000
  • APR range: 5.99%–29.99%
  • Fees: Origination fee of 1% to 5%. Late fees are 5% of the payment or $15, whichever is greater (after 15 days past due). Returned check and ACH fees are $15. There is no pre-payment penalty.
  • Minimum recommended credit score: 600
  • Other qualification requirements: Need to have at least one year of credit history without any current delinquencies or recent bankruptcies and reflecting at least one open account and a minimum of one revolving account ever opened. Your debt-to-income ratio must be below 40% as calculated by Peerform.
  • Repayment terms: 36 to 60 months
  • Time to receive funds: Within 3 business days once application is finalized

Read the full review: Peerform Personal Loans

FAQs

How Do Home Improvement Loans Work?

The term home improvement loan can describe a few different financial products. Personal loans for home improvement (secured and unsecured), home equity loans, and home equity lines of credit are 3 popular options.

Though all 3 of these loans have different features, they also have something in common. If you qualify for financing, a lender will lend you the money you can use toward a home improvement or repair project. In exchange, you’ll repay the money you borrowed, along with interest and possibly fees, over time.

Many home improvement loans are reported to the 3 credit bureaus. It’s important that you consistently make your payments on time if you want to protect your credit scores. And doing so can help them, of course.

Once you decide to borrow money for home improvements, there are numerous lenders who may be able to help you: online lenders, banks, and credit unions.

Are Home Improvement Loans Tax Deductible?

The Tax Cuts and Jobs Act changed many of the deductions that were once available to taxpayers. Yet, according to the IRS, the interest paid on home equity loans, home equity lines of credit, and second mortgages may still be deducted from your taxes in many cases.

To deduct loan interest from your taxes, the funds you borrowed must have been used to “build or substantially improve” the home that secures the loan. All the loans described above are secured loans.

Therefore, if you use an unsecured loan to fund your home renovation, you might not be able to deduct the interest you pay. Confirm your situation with an accountant, tax attorney, or other tax advisor.

Can I Borrow More On My Mortgage for Home Improvement?

A mortgage is a type of installment loan. Unlike revolving credit cards and credit lines that let you borrow money, pay it back, and borrow again, an installment loan is issued in a lump sum. You can’t go back to your lender and ask for more money on your existing mortgage—for home improvements or for anything else.

You can, however, consider a cash-out refinance. With a cash-out refinance, you apply for and (if approved) take out a new loan to pay off your existing mortgage. Assuming the equity in your home has increased, you may walk away from the closing table with some extra funds in your pocket.

Imagine you owe $150,000 on a home that’s worth $250,000. If you have good credit and can satisfy a lender’s other requirements (income, employment, debt, etc.), you might be able to borrow $200,000 in a cash-out refinance. Once your existing mortgage of $150,000 is paid off, you could use the extra $50,000 toward your home improvement project.

Note: Refinancing your mortgage isn’t always a great idea, so weigh the pros and cons before taking this step.

The Bottom Line

Terms and conditions of home improvement loans vary a great deal, depending not only on the lender, but on the borrower's credit score and history, and the sums of money involved. No matter what sort of financial shape you're in, there's probably financing available to you. But, regardless of which type of loan you’re considering and what type of lender you want to work with, shopping around will help you make sure that you’re getting the best rate and terms on your home improvement loan.

How We Chose the Best Home Improvement Loans

Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of personal loan lenders for all borrowing needs. We collected over 25 data points, including interest rates, fees, loan amounts and repayment terms, across more than 50 lenders to ensure that our content helps users make the right borrowing decision for their needs.

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Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Remodeling.hw.net. "2020 Cost vs. Value Report." Accessed Feb. 21, 2020.

  2. IRS. "Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses)." Accessed February 22, 2020.