Home improvement loans allow you to finance home repairs and updates, which can improve your home’s retail value and aesthetic appeal. You might use a home improvement loan to finance a kitchen remodel or finish your basement, for example. Unlike home equity loans, which are secured by your home, unsecured personal loans for home improvement don’t require collateral.
The best home improvement loans offer quick and easy access to the funds, come with low APRs and no prepayment penalties, and have flexible repayment terms. When choosing a lender, it’s important to look at the features of each loan product in addition to comparing rates. The goal should be to get the best loan you can qualify for based on your credit score.
Best Home Improvement Loans of December 2022
Best Overall : SoFi
- APR Range: 7.99% - 23.43%
- Time To Receive Loan: 0 Days
- Loan Amount: $5,000 - $100,000
Funding as soon as the same day
No origination fees or prepayment penalties
High borrowing limits
650 minimum credit score required
$5,000 minimum loan amount
Not available in Mississippi
SoFi takes the title for Best Home Improvement Lender because it offers flexible repayment terms without fees, fast funding, and high borrowing amounts for pricey projects. SoFi also has low APRs relative to the industry, although they’re not the lowest we’ve seen.
SoFi was founded in 2011 by Stanford Business School students and began offering personal loans in 2015. Since then, the company has also launched investment and banking products. In 2020, SoFi celebrated having one million members.
Loans from SoFi are available in amounts ranging from $5,000 to $100,000 in most states. Rates start at 7.99% and go up to 23.43%, depending on your creditworthiness and the discounts you take advantage of (you can get a 0.25% discount for using automatic payments, and existing borrowers/co-signers may be able to save an additional 0.125%).
You can choose a repayment term of 24 to 84 months. There are no origination fees or prepayment penalties, so you’ll get the full loan amount, and it’s OK to make extra payments at any time. SoFi also doesn’t charge late payment fees on new loans and won’t report to the credit bureaus until you’re 30+ days past due.
One of the best features of SoFi lending is that you can get the funds as quickly as the same day. To be eligible for a home improvement loan from SoFi, you must:
- Be the age of majority in your state
- Not live in Mississippi
- Be a U.S. citizen, permanent resident, or visa holder
- Be employed or have a job offer starting within 90 days, or have enough money from other sources
- Have a credit score of at least 650
SoFi also has customer support available seven days a week. Customer service reviews on third-party websites are mixed, but that’s common in the industry. Some people report an easy application process and friendly customer service, while others had complaints about the quality of SoFi’s service. SoFi has a 2.8 out of 5-star average rating at Trustpilot and a 3.7/5 star average rating from ConsumerAffairs.
SoFi’s personal loans are also eligible for unemployment protection if your loan has been in good standing for at least nine months at the time you become unemployed. It just takes a minute to check your rate (without hurting your credit score), and you can apply online or by phone for a SoFi home improvement loan.
Best for Emergency Repairs : Discover
- APR Range: 6.99% - 24.99%
- Time To Receive Loan: 1 Days
- Loan Amount: $2,500 - $35,000
No fees if you pay on time
Flexible repayment terms
$2,500 minimum loan amount
No joint applications or co-signing allowed
Higher average APR than some competitors
Discover takes the cake for the emergency repair lender because it’s quick and easy to apply online, and you can receive your funds as soon as the next business day. Founded in 1985, Discover is a financial services company offering credit cards, online banking, personal loans, student loans, and home loans. Discover has a 100% U.S.-based customer service team and is dedicated to giving back to the community.
You can apply for loans from $2,500 to $35,000 from Discover, which you’ll pay back in fixed monthly payments over 36 to 84 months. Discover even lets you take 84 months for its smaller loan amounts, while other companies can be more restrictive with their terms. The APR range is 6.99% to 24.99%, which isn’t as high as many other lenders, but it’s also not the lowest of the lenders we reviewed. Discover doesn’t offer an autopay discount or other savings opportunities.
You’ll get a decision as soon as the same day with funding as soon as the next business day, and you won’t need to pay an origination fee. There’s also no prepayment penalty—in fact, if you repay the loan in 30 days, you won’t even pay interest. And you can always make extra payments to reduce the total amount of interest you owe. The only fee Discover charges is a $39 late fee.
Discover offers personal loans in all 50 states, and you can choose to apply online or by phone. You can also pre-qualify without hurting your credit score. To be eligible for a loan from Discover, you’ll need a household income of at least $25,000, to be at least 18 years old, and to be a U.S. citizen. Discover doesn’t specify a minimum credit score, but the lender will review information such as your credit history when making a decision.
Like most lenders in the industry, Discover receives mixed customer service reports on third-party review sites. But most complaints on Trustpilot are regarding the lender’s credit card products. And reviews on ConsumerAffairs are more favorable. Overall, we’re impressed with Discover’s unsecured personal loan offering.
Best for Small Loans and Flexible Repayment Options : Upgrade
- APR Range: 7.96% - 35.97%
- Time To Receive Loan: 1 Day
- Loan Amount: $1,000 - $50,000
Minimum loan amount of only $1,000
Flexible repayment terms
Available to fair-credit borrowers with or without a co-signer
Upper limit APR is relatively high
Origination fee of 2.9% to 8%
Late payment fee of up to $10
Few lenders offer a minimum loan amount of less than $1,000, and Upgrade is one of the most reputable. Upgrade’s founders were pioneers in the fintech (financial technology) space for years before launching the company in 2017. Since then, the lender has extended more than $10 billion in credit to its customers. In addition to personal loans, Upgrade offers a rewards checking account and a credit card. The company is headquartered in San Francisco.
Upgrade offers home improvement loans from $1,000 to $50,000, so you can tackle a project of any size. They come with APRs as low as 7.46% when you choose automatic payments, but the upper range is 35.97%, which is relatively high. For reference, the average APR on a 24-month personal loan is 9.09%, according to the Federal Reserve. Upgrade loans come with an origination fee of 2.9% to 8% of the loan amount, which will be deducted from your loan proceeds. There’s also a late payment fee of up to $10.
You can apply online or by phone for an Upgrade home improvement loan. Once approved, you can receive your funds as quickly as the next business day. Repayment terms range from 24 to 84 months, which offers a lot of flexibility. And there are no prepayment penalties, so it’s OK to pay off your loan early.
To be approved for an Upgrade loan, you must:
- Not live in Iowa, West Virginia, or Washington D.C.
- Be a U.S. citizen, permanent resident, or have a visa
- Be the age of majority in your state
- Have a bank account
- Have a valid email address
- Have a credit score of at least 550 or apply with a co-signer
You can reach a customer service representative at Upgrade seven days a week. Upgrade is a reputable lender with outstanding customer service reviews on third-party websites relative to the industry. The lender receives mostly favorable reviews on Trustpilot, with an average rating of 4.7/5 stars. Many people said the process was fast and easy and the customer service was excellent. Upgrade only has a few reviews on ConsumerAffairs.
Best for Bad Credit : Rocket Loans
- APR Range: 8.42% - 29.99%
- Time To Receive Loan: 1 Day
- Loan Amount: $2,000 - $45,000
Minimum credit score of 580
Same-day funding possible
Fast pre-approval with a soft credit check
No co-signer option
Only 2 repayment choices
Why We Chose It
Rocket Loans is an online lender offering personal loans to residents of 47 states (excluding Nevada, Iowa, and West Virginia). Funds can be used for a variety of expenses including medical, debt consolidation, and home improvements. All of Rocket Loans' loan products are unsecured.
Unlike many other lenders, Rocket Loans will disburse loans to those with bad credit, requiring a minimum credit score of only 580, and borrowers can find out the loan options available to them with just a soft credit check. No co-signers are permitted, but interest rates are comparable to competitors and loans are available for up to $45,000 (minimum loan amount is $2,000).
Rocket Loans does have quick approval and same-day funding, but borrowers should be aware that there are only two repayment options -36 months or 60 months - and there are high fees, including an origination fee that can go up to 6% of the borrowed amount and a $15 late fee.
Read the full Rocket Loans personal loans review.
Best for Large Expenses : LightStream
- Time To Receive Loan: 0 Days*
- Loan Amount: $5,000 - $100,000
Loans available up to $100,000
Long repayment terms
Minimum credit score of 680 required
No pre-qualification option
Why We Chose It
For borrowers looking to pay for a large expense like a pool or kitchen renovation, Lightstream, the online lending arm of Truist Bank, offers loans ranging from $5,000-$100,000. There are no loan fees, loan repayment terms of up to 144 months*, and funds can often be received in one day. Loans are available to borrowers in all 50 states. Home improvement APRs range from 6.99% - 19.24%* with autopay.
Lightstream loans require a 680 minimum credit score, but joint applicants are permitted. This means that if you have poor credit, you could still qualify for a loan if you have a co-borrower with a good or excellent credit score. Interest rates for these loans are competitive, although better rates are available to borrowers with better credit.
Although there is no prequalification option, Lightstream loans do come with a rate match and autopay discount and refinancing loans are also available. All Lightstream personal loans are unsecured.
Read the full Lightstream personal loans review.
Best for Military Members : Navy Federal Credit Union
- APR Range: 7.49% - 18.00%
- Time To Receive Loan: 1 Day
- Loan Amount: $250 - $50,000
Wide range of loan amount options
Joint applications allowed
No prequalification option
Membership required to get a loan
Why We Chose It
Navy Federal Credit Union (NFCU) loans, available only to members of the military and their families, can be used for a variety of purposes, including home improvements, relocation expenses, and debt consolidation. NFCU loan amounts range from $250-$50,000 and are offered to members in all 50 states.
Borrowers cannot prequalify for a loan, but there is an option for co-signers and same-day funding is available. Unsecured and secured loans are offered, and loan rates range between 7.49%-18.00%. Borrowers can select from a range of repayment terms, with a maximum repayment term of 180 months. There are no origination fees, although there is a $29 late payment fee.
NFCU members can apply for loans online, over the phone, or at a branch, and may receive a small interest rate decrease (0.25%) for applying by phone or in person.
Read the full Navy Federal Credit Union personal loans review.
Compare the Best Home Improvement Loans of December 2022*APR ranges for some companies include a discount for automatic payments or existing bank customers.
When choosing a home improvement loan, consider your borrowing needs. Some lenders, such as Upgrade, offer smaller minimum loan amounts, while others, like Discover, provide an easy and fast application process. But overall, the best home improvement lender we reviewed was SoFi.
SoFi offers benefits like fast funding, flexible repayment terms, and zero fees. On top of that, the lender also offers low rates, high loan amounts, and unemployment protection. Unless you have bad credit or need a smaller loan, SoFi is going to be the best option for your home improvement needs. And you can always compare rates with SoFi’s pre-qualification option.
Guide for Choosing the Best Home Improvement Loans
Determine Your Need for a Home Improvement Loan
The first step is to decide whether you need a home improvement loan. If you’d rather borrow against the equity in your home, you can look into a home equity loan or a home equity line of credit. One advantage of personal loans from the lenders above? They’re unsecured, so you won’t risk losing your home, and don’t require a closing process, so you can get your money fast.
The next step is to estimate how much you’ll need to borrow. Websites like HomeAdvisor can provide you with a range based on typical project costs in your city, but you may want to get a few quotes from contractors to get a more accurate estimate. Keep in mind that some contractors offer their own financing programs, but you should always compare the rates and terms offered with a traditional personal loan.
Comparing Home Improvement Lenders
There’s a lot to consider when looking at your options for home improvement loans. For example, you’ll want to evaluate each potential lender based on the following:
- APR: Evaluate how much you’ll pay to borrow the money.
- Fees: Determine whether the lender charges an origination fee that will be deducted from your loan amount, late fees, or any other charges. You should select the lender with the lowest fees you can qualify for.
- Loan amounts: Opt for a lender that can offer you the exact amount you need. If possible, avoid borrowing more than you need.
- Loan terms: Make sure the lender offers a term that will allow you to comfortably afford your fixed monthly payments.
- Penalties: Most lenders don’t charge prepayment penalties, but you should eliminate any options that will penalize you for paying your loan off early.
- Discounts: Can you get a lower rate for enrolling in automatic payments, applying with a co-signer, or anything else?
- Speed of funding: If you need the money quickly, be sure to select a lender with fast funding.
- Ease of application: This isn’t the most important factor, but lenders with complicated applications can be off-putting. The best lenders make it simple to apply.
- Customer service: Hopefully, you’ll never need customer service. But in case you do, make sure that the lender offers customer service hours and channels (online, phone, etc.) that are convenient for you.
- Lender reputation: Check out what other borrowers are saying about the lender. While it’s common for lenders to have mixed reviews, an abundance of horror stories is a bad sign.
- Eligibility: You may not qualify for our top pick if you have fair credit. When comparing lenders, go through the prequalification process each time to see if you’re eligible, especially if you have less-than-perfect credit.
Applying for a Home Improvement Loan
Once you’ve selected a lender and prequalified for a loan, gather the necessary information and documents. You’ll likely need to provide information such as your Social Security number and proof of income. Decide whether you’d like to apply online or by phone with help from customer service, and then go through the approval process.
The lender you choose may offer you multiple loan options. Choose the amount and term that best suit your needs. From there, build out a new budget that includes loan repayment. This way, you can set up automatic payments and feel confident that you’ll always have the funds available to cover your monthly installment.
Keep in mind that some lenders will allow you to choose and change your due date, which can be helpful if an emergency pops up and you need extra time to make your payment. Most lenders allow you to manage your account online or by mobile app, so you can make changes without contacting customer service.
Frequently Asked Questions
What Is a Home Improvement Loan?
The term “home improvement loan” usually refers to an unsecured personal loan used for home improvement or repairs, but it may also indicate any type of loan used for home improvements. For example, home equity loans and home equity lines of credit (HELOCs) are secured forms of financing that can be used to fund home improvement projects.
How Do Home Improvement Loans Work?
Home improvement projects can be costly, so many families need to borrow money to afford the work. When you apply for a home improvement loan and are approved, you’ll receive the money you need in a lump sum, minus the origination fee, if there is one.
From there, you pay back the loan in fixed monthly installments. Those payments will include a portion of the principal (the amount you borrowed) and interest (the extra amount you owe the lender for letting you borrow the money). You’ll end up paying more than you borrowed over time, but you’ll get the funding you need now. This can be especially helpful if an emergency prompts the home improvement project.
What Are the Different Types of Home Improvement Loans?
There are a few different ways to fund a home improvement project with a loan:
- Unsecured personal loans: These provide a lump sum of money typically paid back in fixed installments and do not require collateral
- Home equity loans: These are secured by your home and allow you to borrow a lump sum from the equity you’ve built in your house.
- Home equity lines of credit (HELOC): These are revolving lines of credit with a maximum limit that allows you to borrow only what you need and pay it back later. They’re helpful for ongoing projects.
- Cash-out refinancing: This involves replacing your current mortgage with a mortgage for a larger amount and keeping the difference as cash.
- FHA 204(k) loan: This is a federal loan program you can use to buy and renovate a home with one loan.
- Credit cards: These are payment cards that allow you to make purchases that draw from a line of credit.
- Contractor financing: Some contractors offer financing programs through partner lenders. The lender typically pays the contractor directly for the work.
What Are the Pros and Cons of Getting a Home Improvement Loan?
- Get your loan proceeds more quickly than with some secured forms of financing
- Repay in predictable fixed monthly payments
- No need for collateral, such as your home or vehicle
- Home improvement loan rates can be higher than secured forms of financing
- Risk of default if your financial situation changes
- Paid as a lump sum (drawing from a line may be preferable if you don’t know how much you’ll need)
How We Chose the Best Home Improvement Loans
Our team evaluated 38 lenders and collected 1,520 data points before selecting our top choices. We weighed more than 20 criteria and gave a higher weight to those with a more significant impact to potential borrowers.
The top picks were selected based on factors like membership requirements (weighted 15%), average fixed APR (weighted 15%), and average origination fees (weighted 10%).
We also took into account the flexibility of repayment terms, helpful features like pre-qualification, and whether a co-signer or joint applications are permitted to ensure borrowers get the best possible experience. For further information about our selection criteria and process, our complete methodology is available.
*Lightstream Disclosure: 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 are 0.50% points 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 $300.00.