/images/2018/01/23/navina-side-hustle-mid_MPfEDfV.jpg)
/images/2019/12/06/smart_strategies_to_save_money_on_car_insurance.jpg)
/authors/miranda_marquit_updated.png)
/authors/jess_ullrich.jpg)
As a homeowner, I know firsthand that there’s always something to fix or, ideally, upgrade on your property. In our first years of homeownership, my partner and I did everything from installing a new metal roof to panic-dialing plumbers after water leaks. Each time, we considered home improvement loans from banks, credit unions, and online lenders. Fortunately, our desired renovations weren’t time-sensitive, and the sometimes-surprise fixes were within our budget.
But you may be seeking a faster financing option. My past research on unsecured personal loans showed me that no two products or lenders are equal. To find the best home improvement loan for you, I suggest you compare key characteristics, such as interest rates and fees, repayment term options and flexibility, and companies’ customer support and track records.
How we evaluate products
The companies we chose for our list of the best home improvement loans are current or past FinanceBuzz partners. We did not review all companies in the market. We used editorial judgment to determine what use or user each home improvement loan would be best for.
FinanceBuzz evaluation criteria include:
- Loan amounts: Loan size options, including higher amounts and lower amounts to provide a range of choices.
- Loan types: We considered both unsecured personal loans and secured loans that use your home as collateral in our research and included options for both.
- Fees: A variety of fees were considered when creating this list, including origination fees and late fees. Most lenders do not charge prepayment penalties.
- Loan term lengths: We evaluated home improvement loans based on how long you could repay your loan, as well as the ability to choose loan terms that fit your needs. Lenders with a wider range of terms and the option for shorter and longer loans than the market average were favored over others.
The best home improvement loans
Home improvement loans compared
| Lender | Minimum credit score | APRs | Loan amounts |
| LightStream | Good to excellent | From 7.49%–21.44% (as of 12/23/24) | $5,000 to $100,000 |
| SoFi | 680 | From 8.99%-29.99% (as of 09/05/24) | $5,000 to $100,000 |
| Upgrade | 580 | From 9.99%-35.99% (as of 8/19/24) | $1,000 to $50,000 |
| Prosper | 600 | From 8.99%-35.99% (as of 12/04/24) | $2,000 to $50,000 |
| Figure | 640 | 6.55% - 15.95% (as of Dec. 17, 2024) (rate with Autopay) | $15,000 to $400,000 |
What is a home improvement loan?
Types of home improvement loans
Personal loans
APRs: ~6.94% to 35.99%
Terms: One to seven years (up to 10)
Loan amounts: $1,000 to $50,000 or more
When they’re best: If you have excellent credit and healthy cash flow
When to avoid: You can’t qualify for a lower interest rate than you could get on alternative financing options
Personal loans are a form of unsecured debt that can be used to borrow as little as $1,000 up to $50,000 or more. Because the personal loan is unsecured, you won’t need to offer collateral (such as equity in your home) to qualify.
Although it’s possible to find an unsecured personal loan if you have poor credit, you’ll likely pay a higher interest rate without good to excellent credit.
Our advice
Consider a cosigner or co-borrower to improve your personal loan approval odds. You can also investigate secured loans, which require collateral and place less emphasis on your credit strength. However, you have to be comfortable with the possibility of losing the asset you pledge if something prevents you from repaying.Home equity loans and home equity lines of credit (HELOCs)
APRs: ~7% to 18%
Terms: Five to 30 years
Loan amounts: $10,000 to $500,000 or more
When they’re best: If you have sufficient home equity and a dependable budget
When to avoid: Your finances aren’t rock solid (since failing to repay this debt has dire consequences)
Home equity loans — and home equity lines of credit or HELOCs, which allow you to draw funds as needed rather than getting a lump sum — are secured forms of financing. If you have enough equity in your property, you can effectively borrow against it.
Home equity financing often carries lower rates than other home improvement loan options. However, I want to stress the added risk. You’re putting your home on the line when you secure a loan with it, and you risk losing it to foreclosure if you can’t repay. This isn’t something to take lightly or do without a solid repayment plan. Also, applying is typically a lengthier, more involved process for a home equity loan vs. a personal loan.
What about government-backed home improvement loans?
Some homeowners might qualify for an FHA Title I property improvement loan for repairs to make the home livable or useful. Plus, many state and local programs provide financial assistance to homeowners for repairs and improvements. Research all of your options, including FHA 203(k) rehabilitation loans, if you’re buying or refinancing a loan for a fixer-upper.The best home improvement loans
Lightstream
APRs: From 7.49%–21.44% (as of 12/23/24)
Terms: Two to seven years (up to 20 for home improvement)
Loan amounts: $5,000 to $100,000
We chose Lightstream as the best option for borrowers who want to spread their repayment out as long as possible. Lightstream is known for its low annual percentage rates (APRs) and no-fee loans. But it primarily stands out to us for having longer repayment terms than you’ll find with most competitors, making it the best option we’ve found for renovations and projects that take a long time to complete.
You need good credit to qualify for Lightstream, as the company looks closely at your credit history and available assets. And Lightstream offers a maximum loan amount of $100,000 and a minimum loan amount of $5,000, which is important to keep in mind when calculating project costs. If your project costs won’t fit within this range, choose another lender.
- Large loan amounts
- Long repayment terms
- Competitive rates for well-qualified borrowers
- Same-day funding
- Good-to-excellent credit required
- No prequalification tool (which is uncommon)
Read our Lightstream loans review.
/images/2022/11/02/lightstream_logo_new.png){kind=logo}
LightStream Benefits
- Finally, a loan that rewards your good credit
- Apply in minutes. Have funds in your account as soon as today1 <p>You can fund your loan today if today is a banking business day, your application is approved, and you complete the following steps by 2:30 p.m. Eastern time: (1) review and electronically sign your loan agreement; (2) provide us with your funding preferences and relevant banking information; and (3) complete the final verification process.</p>
SoFi
APRs: From 8.99%-29.99% (as of 09/05/24)
Terms: Two to seven years
Loan amounts: $5,000 to $100,000
SoFi offers an easy loan application process, a wide range of terms, and you can borrow between $5,000 and $100,000 for home improvements, which all make it one of the best lenders we’ve researched. But one of our favorite things about this lender is that you aren’t required to pay origination fees for personal loans. These can range from 1% to 12% of your loan and are deducted from your loan upfront. With SoFi, you can choose whether to pay them, with not paying translating to a higher APR and paying bringing your rate down. We’ve never seen optional origination fees with another lender. You’ll also never pay late fees, which is rare.
SoFi is known for offering rate discounts with AutoPay and a slew of membership benefits, too. But although it is one of the few lenders that offer up to $100,000, its rates are higher than those of a lender like Lightstream.
- Large loan amounts
- Long repayment terms
- APR discounts
- Optional origination fees and no late fees
- Good (or better) credit required
- Lowest rates require an origination fee
Read our SoFi loans review.
/images/2022/11/02/sofi.png)
SoFi Personal Loans Benefits
- No hidden fees, no catch
- Products and services designed to put members first
- Live customer support 7 days a week
Upgrade
APRs: From 9.99%-35.99% (as of 8/19/24)
Terms: Two to seven years
Loan amounts: $1,000 to $50,000
Upgrade offers home improvement loans of between $1,000 and $50,000 for those with less-than-perfect credit. Although the company doesn’t provide a strict minimum credit score in its marketing materials, you might be able to qualify for a loan with a credit score of less than 600. This is unusual for a personal loan lender, which we often see asking for good credit or better. Just keep in mind you won’t qualify for the lowest rates with a low credit score.
Like SoFi, Upgrade offers loan terms spanning two to seven years. If you have limited credit and need a loan for home improvements, we recommend checking out Upgrade first before looking at the others on this list. You can check to see if you prequalify without hurting your credit. Upgrade is also one of a handful of lenders that accept joint applications.
- May be able to qualify without good credit
- Accepts co-borrowers
- Long repayment terms
- High APRs
- High origination fees (1.85% to 9.99%)
Read our Upgrade loans review.
/images/2023/12/29/logo2.png){kind=logo}
Upgrade Benefits
- Quick Online Pre-Approval
- No fees for prepayment
- Free credit monitoring and educational resources
Prosper
APRs: From 8.99%-35.99% (as of 12/04/24)
Terms: Two to five years
Loan amounts: $2,000 to $50,000
Prosper might be a good fit for you if you don’t want to take out a home improvement loan from a traditional lender. Prosper provides peer-to-peer lending, which means you borrow money from investors rather than a bank or credit union, with relatively fast funding. We recommend peer-to-peer loans for people who’ve had trouble qualifying to borrow money in the past, because investors might decide to be more lenient with you about your credit than a traditional lender might be (though you’re not guaranteed to qualify).
You can expect an origination fee with Prosper, though, and a potentially steep one at that — up to 9.99%. Prosper also offers secured home equity lines of credit with low rates if you qualify.
- Potential to compare multiple offers
- Might offer more flexible credit requirements
- Secured HELOC option
- Relatively high APRs
- No guarantee to be matched with an investor
Read our Prosper loan review.
/images/2022/11/02/prosper-logo-2018.png){kind=logo}
Prosper Benefits
- Get a loan with a low, fixed rate that never goes up
- Your loan, tailored to you
- Checking your rate will not affect your credit score
Figure
APRs: 6.55% - 15.95% (as of Dec. 17, 2024) (rate with Autopay)
If you’re interested in a home equity line of credit (HELOC) instead of a lump-sum home improvement loan, Figure2 <p>Figure Lending LLC is an equal opportunity lender. NMLS #1717824</p> could be a good option for your upcoming home project. This lender offers up to $250,000 for renovations, and borrowers can choose terms of between five and 30 years.
Figure could be a good option for ongoing renovations because it’s a line of credit, not a loan that disburses all the funds upfront, so you could borrow as you go, only tapping into your credit line when you need to. This might offer more flexibility if you aren’t sure how much your project will cost or how long it’ll take.
Read our Figure loan review.
Another option we recommend
Hometap is another option we often suggest for accessing the equity in your home to pay for ongoing improvements. Its model is a little different than a traditional HELOC. Instead of taking on debt, you get money upfront from investors, who essentially invest in the future equity of your home. There are no monthly payments; you can repay the investors anytime within a 10-year term. An investment through Hometap could work well if you want to sell your house soon. Just keep in mind that Hometap investors will get a share of your home’s future value.
/images/2024/12/06/home_tap-nmls2467867_1.png)
Hometap Benefits
- No monthly payments, no debt, up to ten years to pay off
- Get up to $600,000 in as little as 3 weeks3 <p>The timeline to funding may vary, and begins from the time the homeowner submits a completed Application and all supplemental documents are received and verified. The three-week timeframe excludes weekends and assumes the homeowner doesn’t have any undisclosed liens, uses an automated valuation model (AVM)-based virtual appraisal instead of a physical appraisal, and is current on their mortgage and property tax obligations for the previous 90 days.</p>
- 4.94/5 rating on Trustpilot and 8,000+ happily funded homeowners
The best online marketplaces to compare home improvement loans
If you want to compare multiple offers for the best home improvement loans, using an aggregation website might be a good way to move forward. Loan comparison sites ask you to fill out one form with your information and then provide you with several loan options from various lenders that you might qualify for. Comparing loans typically doesn’t impact your credit score, though you’ll likely see a hard inquiry on your credit report once you apply for a loan.
The comparison site will typically earn a commission if you get approved for a loan, but it doesn’t usually cost you extra, and you can easily compare different offers before choosing one. We recommend comparing loans this way if you aren’t sure what lenders might be available to you or what rates you might qualify for and want multiple options in one place.
AmONE
Loan amounts: $1,000 to $50,000
With AmONE, you simply fill out a form with some basic information, and you’re matched with loan offers you’re likely to qualify for. AmONE offers you the ability to talk to a human to help you find the right match for you. AmONE has partners that offer secured, unsecured, and peer-to-peer loans.
Read our AmONE review.
/images/2021/06/09/screen_shot_2021-06-09_at_2.26.36_pm.png)
AmONE Personal Loans Benefits
- Loans up to $50,000
- Min. Credit Score: 600
- APR: 3.99%-35.99% (as of May 31, 2023)
- No Collateral Needed
Fiona
Loan amounts: $1,000 to $250,000
Fiona offers to match you with an appropriate loan from its network of lenders when you fill out its simple form. Fiona also has educational articles on its site that can help you use your loan more effectively. We recommend this
Read our Fiona review.
LoansUnder36
Loan amounts: $100 to $35,000
LoansUnder364 <p>Rate quotes on LoansUnder36 are no greater than 35.99% APR with terms from 61 days to 72 months.</p> offers access to a network of lenders offering small-dollar loans (starting at $100), which can make it one of the best home improvement loans if you need money for a small project or emergency home repair. If you have fair to poor credit, LoansUnder36 could potentially help you find a loan that works for your situation, and it won’t result in a hard inquiry on your credit report unless you apply for a loan.
Read our LoansUnder36 review.
How to choose the right home improvement loan
Now that you know your options, how do you choose the best home improvement loan for you? Here are the main factors to consider.
- How much you need to borrow: Once you know how much you need, you can compare that amount to the loan limits of different lenders and loan types. If you’re unsure how much you might need to borrow or have ongoing financing needs, a home equity line of credit can be a good fit.
- How much home equity you have: This determines whether you can get a home equity loan or a HELOC rather than a personal loan and how much you can borrow. Just be sure to weigh the risks and rewards of using your house as collateral.
- How fast you need funds: A personal loan offers a much faster approval and funding process than a home equity loan, line of credit, or government-backed loan.
- How good your credit is: Most home improvement loans require a decent credit score to qualify, though some government-backed loans might provide more flexibility. Your credit score also affects the interest rate and potential fees you will face. If you have poor credit, we recommend looking for a lender that lets you add a co-signer or co-borrower to your loan application.
- How much you’ll pay: Home equity loans and HELOCs often provide lower interest rates than personal loans but can come with additional closing fees. Get rate quotes for different credit options to compare costs and terms. A fixed interest rate might be a better option than a variable rate loan because your payments will stay consistent.
- How long you want to spend repaying your loan: Personal loans often come with shorter terms than loans secured with your house. Generally, the longer the term, the smaller your monthly payments. However, keep in mind that you'll generally pay more interest over the life of the loan if you choose a longer term.
Don’t forget to shop around with federal credit unions
Tip
While applying for home improvement loans with online personal loan companies is simple, include credit unions in your search. Federal credit unions cap their APRs at 18.00% because the Federal Credit Union Act legally requires them to do so. Every percentage point matters, especially if you’ve got imperfect credit.Should you consider a co-applicant?
If you have trouble qualifying for a personal loan for home improvement — or you’re up against double-digit APRs — consider a cosigner or co-borrower. This creditworthy individual (perhaps a spouse, parent, or other family member) could fortify your application and possibly unlock lower interest rates.
If you go this route, keep in mind:
- Co-borrowers share equal access to loan funds.
- Co-borrowers and cosigners could suffer credit consequences if you struggle to repay your loan.
- Not all lenders allow both (or either) types of co-applicants.
FAQs
What is the best place to get a home improvement loan?
The best place to get a home improvement loan is one where you can get the best terms and rates for your situation. Banks, credit unions, online lenders, and loan marketplaces all offer access to home improvement loans. Shop around and compare terms to find the best option for you.
Are home improvement loans tax-deductible?
The interest paid on home loans secured by your property’s value is often tax-deductible, including home equity loans or HELOCs. The IRS requires that loan funds must be used to buy, build, or improve the home they secure for interest to be deductible. You can write off interest on up to $750,000 in qualifying residential loans.
Interest paid on personal loans is not tax-deductible.
What is the interest rate on a home improvement loan?
The rate you’ll pay depends on a few factors. The type of loan you choose plays a big role, with home equity loans and HELOCs offering lower rates. Your creditworthiness and debt-to-income ratio will also likely factor into your home improvement loan rate; the better your credit, the lower your rates.
Are there fees associated with home improvement loans?
Depending on the lender or loan that you get, there may be fees associated with a home improvement loan. For instance, you might pay a loan origination fee or a late fee if you miss a monthly payment. If you have concerns about fees, it's a good idea to talk with potential lenders before you sign on the dotted line.
Is it possible to do a cash-out refinance for home improvements?
Yes, if you have enough equity in your home, you can refinance your mortgage for more than you owe and then receive a portion of the difference in cash. However, the refinancing process can often take much longer and be more involved than getting a home improvement loan because you’re getting a new mortgage. Additionally, you’ll likely need to pay closing costs, which could make a cash-out refinance more expensive. Still, this might be a good option if you want to make home improvements and are already planning to refinance an existing mortgage, perhaps to lower your mortgage rate.
Bottom line
If you’re ready to get home repairs or improvements underway, start looking for the right financing option. Choosing the best home improvement loan is the first and one of the most important decisions you’ll make in your home improvement process.
Make sure you pick the type of home improvement loan that best meets your needs. Once you know what you want, shop around to find the best lender, terms, and competitive rates available to you.
Disclaimer: All rates and fees are accurate as of November 2024.