Best Home Improvement Loans in 2023

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How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Best lenders for home improvement loans

How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
LenderBest for…APR rangeLoan termLoan amountMinimum credit score
High-income earners8.99% to 35.99%36 to 60 months$2,000 to $50,000580
No origination fee 6.99% to 24.99%36 to 84 months$2,500 to $40,000Not specified
Consumers Credit UnionLong loan terms6.99% to 20.74% * with autopay 24 to 144 months$5,000 to $100,000Not specified
Navy Federal Credit UnionMilitary members7.49% to 18.00%Up to 180 months$25,000 minimumNot specified
Small loan amounts7.74% to 17.99%Up to 60 months$600 to $50,000Not specified
Good credit borrowers8.99% to 23.43%*24 to 84 months$5,000 to $100,000680
Fair credit borrowers6.70% to 35.99%36 or 60 months$1,000 to $50,000300
Large loan amounts7.49% to 23.24%12 to 84 months$3,000 to $100,000Not specified

*Rate includes autopay discount

Best Egg

  • Loan amounts: $2,000 to $50,000
  • APR: 8.99% to 35.99%
  • Terms: 36 to 60 months
  • Origination fee: 0.99% - 8.99%
  • Minimum credit requirement: 580

Why we like it: This lender offers a secured loan option for borrowers who may struggle to qualify for a low APR. Its lowest rates are reserved for those with a minimum income of $100,000 and a credit score of at least 700.

 

Overview: Best Egg offers loans ranging from $2,000 to $50,000. Keep in mind, however, you may only be able to access loans up to $35,000 depending on where you live and whether you receive a special offer code.

 

While it can take up to three days to receive funding from Best Egg, the lender states that about half of borrowers receive funds within one business day. When taking out a loan with Best Egg, you’ll also need to budget for a one-time origination fee that can range from 0.99% - 8.99%.

 

ProsCons

  No prepayment penalties

  Offers both secured and unsecured loans

  Fast funding (one to three days)

  Lowest rates require high income

  Charges origination fee (0.99% - 8.99%)

  High maximum APR (35.99%)

 

Eligibility requirements: Best Egg looks for the following criteria when considering potential customers:

 

  • Minimum credit score of 580
  • Must be a U.S. citizen or permanent resident
  • Must not live in the following areas:
    • Iowa
    • Vermont
    • West Virginia
    • District of Columbia
    • U.S. territories

Discover

  • Loan amounts: $2,500 to $40,000
  • APR: 6.99% to 24.99%
  • Terms: 36 to 84 months
  • Origination fee: None
  • Minimum credit requirement: Not specified

Why we like it: While origination fees are common among personal loan lenders, Discover customers won’t have to worry about this administrative charge.

 

Overview: While this lender’s loan amount ceiling is considerably lower than some of its competitors, Discover makes up for it in other areas, such as offering a lower APR and lengthy loan term options.

 

If your credit score is on the low side, you might have difficulty qualifying for a loan with Discover, especially since this lender doesn’t allow you to apply with a second person.

 

ProsCons

  No origination fees

  Long loan terms available

  Competitive interest rates

  Low maximum loan amounts

  No options for co-applicants

  Borrowers with low credit scores may not qualify

 

Eligibility requirements: To get approved for a home improvement loan with Discover, you’ll need to fit the following criteria:

 

  • Minimum income of $25,000
  • Must be a U.S. citizen or permanent resident

LightStream

  • Loan amounts: $5,000 to $100,000
  • APR: 6.99% to 20.74% * with autopay
  • Terms: 24 to 144 months
  • Origination fee: None
  • Minimum credit requirement: Not specified

Why we like it: LightStream offers one of the longest loan repayment terms available on the market: up to 144 months.

 

Overview: LightStream offers a plethora of features that make it a competitive option for home improvement loans. Along with long loan terms and loan amounts up to $100,000, LightStream customers won’t have to pay any fees if they go with this lender.

 

Unfortunately, LightStream doesn’t offer the option for consumers to prequalify for a loan. This means that if applicants want to see the rates, amounts and terms they may be eligible for, they’ll have to submit to a hard-credit inquiry. These types of credit pulls can cause your credit score to go down, unlike prequalification.

 

ProsCons

  High loan amounts

  Long loan terms

  Doesn’t charge fees

  Borrowers with low credit may not qualify

  No option to prequalify

  High minimum loan amounts

 

Eligibility requirements: While LightStream doesn’t offer much specific criteria in what it’s looking for in potential borrowers, it does stipulate that it will only offer loans to those with good or excellent credit scores and strong credit profiles.

Navy Federal Credit Union

  • Loan amounts: $25,000 minimum
  • APR: 7.49% to 18.00%
  • Terms: Up to 180 months
  • Origination fee: None
  • Minimum credit requirement: Not specified

Why we like it: Navy Federal Credit Union focuses on serving members of the military and their families. In addition to competitive rates, NFCU allows you to repay your personal loan over an industry-leading 15 years (180 months).

 

Overview: Navy Federal Credit Union is only open to members of the U.S. military or their family members. Customers of this credit union will have access to perks such as same-day funding, no origination fees and repayment terms as long as 180 months.

 

However, beyond its military member specifications, Navy Federal Credit Union doesn’t offer much clarity on other criteria it’s looking for. It’s also unclear what this lender’s maximum loan amount is.

 

ProsCons

  Same-day funding available

  No origination fees

  Long loan terms (up to 180 months)

  Must be military member to qualify

  No maximum loan amount specified

  Unclear minimum loan terms

 

Eligibility requirements: To get a loan with Navy Federal, you’ll need to become a member of the credit union. This lender requires that you must have ties to the following (or be a family member of someone involved):

 

  • U.S. Armed Forces
  • Department of Defense
  • Army National Guard

PenFed Credit Union

  • Loan amounts: $600 to $50,000
  • APR: 7.74% to 17.99%
  • Terms: Up to 60 months
  • Origination fee: None
  • Minimum credit requirement: Not specified

Why we like it: At just $600, PenFed Credit Union offers one of the lowest minimum loan amounts on the personal loan marketplace.

 

Overview: If you’d like to finance your home improvement projects through a credit union, PenFed Credit Union comes with zero origination fees and funding that only takes one to two business days.

 

Keep in mind, however, that you’ll need to become a PenFed Credit Union member in order to receive your loan and that any late payments may come with fees as high as $29.

ProsCons

  No origination fees

  Quick funding (one to two business days)

  Competitive interest rates

  Must be member to qualify

  Unclear criteria to qualify for loan

  Charges late payment fees ($29)

 

Eligibility requirements: PenFed Credit Union requires that you become a member before you receive your loan. To become a member, you’ll need to fill out an application with your personal information and open a savings account with a $5 deposit.

SoFi Bank

  • Loan amounts: $5,000 to $100,000
  • APR: 8.99% to 23.43% (includes autopay discount)
  • Terms: 24 to 84 months
  • Origination fee: No origination fee required
  • Minimum credit requirement: 680

Why we like it: SoFi takes a fee-free approach to lending. Its personal loans don’t come with any required origination fees, late fees or prepayment penalties.

 

Overview: SoFi doesn’t require fees of any kind — this includes late fees and origination fees that typically come with personal loans. This lender also offers repayment terms up to 84 months and loan amounts as large as $100,000. On top of that, SoFi’s APR is quite competitive, only going as high as 23.43% (which includes an autopay discount).

 

Unfortunately, if you are a borrower with low credit, it may be difficult to qualify for a home improvement loan. However, SoFi does offer the option to add a cosigner to your application, which may make it easier to qualify. To get a loan with SoFi, you’ll need a credit score of at least 680, which can give you access to all kinds of features that offer flexibility and can save you money.

 

ProsCons

  Doesn’t charge any required fees

  Offers large loan amounts

  Provide options for long loan terms

  High minimum loan amount

  Borrowers with low credit may not qualify

  No option to visit physical branch

 

Eligibility requirements: If you want a home improvement loan with SoFi, you’ll want to check the following boxes:

 

  • Minimum credit score of 680
  • Must be a U.S. citizen, permanent resident or non-permanent resident with current immigration status
  • Must be employed, have employment offer to start in 90 days or have other form of consistent income

Upstart

  • Loan amounts: $1,000 to $50,000
  • APR: 6.70% to 35.99%
  • Terms: 36 or 60 months
  • Origination fee: 0.00% - 10.00%
  • Minimum credit requirement: 300

Why we like it: This lender has a low credit score requirement (300), which may make it ideal for those with fair credit scores looking for an opportunity to boost their scores.

 

Overview: With loans ranging from $1,000 to $50,000, Upstart offers borrowers flexibility when it comes to how much they want to take out. Upstart also has a lower credit score requirement, which can make a loan with this lender more accessible.

 

On the other hand, Upstart charges origination fees that can get as high as 10.00%. This lender’s loan terms are also limited to just two options — 36 or 60 months — and there isn’t an option to apply with a cosigner if you have a low credit score.

 

ProsCons

  Quick funding timeline (one business day)

  Flexible loan amounts

  Low minimum credit score

  Charges origination fee (0.00% - 10.00%)

  Limited loan terms

  No option for joint applications

 

Eligibility requirements: Upstart offers clear criteria when it comes to what it’s looking for when consumer apply for a home improvement loan:

 

  • Must have a minimum credit score of 300
  • Must be U.S. citizen or permanent resident
  • Not live in Iowa or West Virginia
  • Must be employed, have employment offer to start in six months or have another source of consistent income

Wells Fargo Bank

  • Loan amounts: $3,000 to $100,000
  • APR: 7.49% to 23.24%
  • Terms: 12 to 84 months
  • Origination fee: None
  • Minimum credit requirement: Not specified

Why we like it: With loans ranging from $3,000 to $100,000, Wells Fargo offers some of the most flexible home improvement loan amounts in the marketplace.

 

Overview: Wells Fargo allows its customers to skip most fees. That means no origination fees, closing fees or prepayment penalties, which can save you money over the life of your home improvement loan.

 

However, if you’re late on payments, Wells Fargo charges late fees. Also, if you don’t have a strong enough credit score, it may be challenging to qualify with this lender since it doesn’t allow for cosigners.

 

ProsCons

  Doesn’t charge origination fees

  Offers large loan amount options

  Flexible range of loan terms

  Must be existing customer to qualify

  Charges late fees

  Doesn’t allow for cosigners

 

Eligibility requirements: To get approved for a home improvement loan, Wells Fargo indicates that you’ll need to be an existing customer with the bank.

What is a home improvement loan?

Home improvement loans are a type of personal loan that are used to pay for home improvement costs.

Personal loans are lump-sum, fixed-rate loans that are repaid in monthly installments over a set period of time, typically two to five years.

Unsecured personal loans don’t require collateral, which makes them an alluring alternative for homeowners who don’t want to put their home on the line with a home equity loan or home equity line of credit (HELOC). However, secured personal loans do exist, and they may offer an affordable alternative for borrowers with fair or worse credit.

Since personal loans are typically unsecured, personal loan lenders rely heavily on an applicant’s financial profile — such as their credit score and debt-to-income ratio — when determining eligibility.

Home improvement loans vs. home equity financing

When deciding how to finance your home improvement projects, you may be weighing a home improvement personal loan or a home equity loan. Each loan type comes with some stark differences that may influence which option is best for you.

Home improvement loansHome equity loans
APRs
  • APRs typically run between 6.99% and 36.00%
  • Fixed interest rates
  • Interest rates as low as 5.49%
  • Fixed interest rates
Repayment
  • Fixed monthly payments
  • Repayment terms typically between two and seven years
  • Fixed monthly payments
  • Repayment terms typically between 15 and 20 years
Amounts, fees
  • Amounts can range from $1,000 to $100,000
  • Origination fees (up to 8.00%)
  • Closing cost fees ranging from 2% to 5% of your loan amount
  • Can borrow up to 80% of your home’s value
Qualification criteria
  • Recommended credit score of at least 640
  • Debt-to-income ratio below 35%
  • Credit utilization ratio below 30%
  • Recommended credit score of at least 740
  • Must own a home
  • Must have at least 15% equity in your home

Home improvement loan pros and cons

Pros

  • No collateral needed.
    Unlike home equity loans or HELOCs, unsecured personal loans don’t require you to use your home as collateral. That means you don’t risk losing your home if you fall behind on loan payments.
  • APR and monthly payments are consistent.
    With a fixed APR, personal loans offer predictable monthly payments, making it easy to account for home improvement spending in your monthly budget.
  • Fast funding that’s deposited directly into your account.
    Personal loans offer faster funding than secured alternatives like home equity loans, since they don’t require an appraisal. Personal loans are issued in a lump sum and you can use the money however you see fit.

Cons

  • Personal loans can come with high interest rates.
    Personal loan APRs can get as high as 36%, particularly for poor-credit borrowers, making them an expensive way to finance home improvements. It may not be worth the return on investment if you can only qualify for a high APR.
  • There may be better financing options available.
    Depending on the equity you have in your home, a home equity loan or HELOC might be a better option for you. Secured loans typically have lower APRs, which can reduce how much you pay over the life of the loan.
  • You can’t reap tax benefits.
    Personal loan interest isn’t tax deductible. Depending on your situation, you may be able to deduct home equity loan interest on your taxes.

How to compare home improvement lenders

Not all personal loan lenders are the same. Some lenders charge fees and prepayment penalties, but there are also no-fee personal loans. It’s important to do your research before you settle on a lender for your home improvement loan.

Low APR

The lower your APR, the less you’ll pay over the life of the loan. Shopping around for the lowest possible APR can save you money. To compare APR without impacting your credit, check to see if the lenders you’re interested in allow you to prequalify for a loan.

Few or no fees

Read the fine print before you borrow money. Some lenders charge a prepayment penalty, which means you’d be penalized for paying off your loan early, though this is rare among personal loan lenders. More commonly, lenders may charge an origination fee, a one-time administration fee that comes out of your total loan balance.

Positive reviews

It can be overwhelming to decide which lender is right for you. Read lender reviews to gather perspective from borrowers who have been in your shoes. It may also be worth checking with the Consumer Financial Protection Bureau to see if a lender has had any recent complaints or lawsuits.

Home improvement loan rates

Home improvement loan rates commonly run between 6.99% and 36.00%. The rates you qualify for on your home improvement loan will depend heavily on your credit score and credit profile, including factors like your payment history and credit utilization ratio.

Personal loan statistics by borrower credit score

Credit score rangesAverage APRAverage loan amount
720+9.81%$18,812.69
680-71916.01%$15,214.76
660-67923.54%$11,727.69
640-65928.93%$9,470.86
620-63935.98%$7,350.97
580-61954.17%$5,746.62
560-57985.24%$4,250.88
Less than 560135.83%$2,817.03

Source: LendingTree user data on closed personal loans (for all purposes) for the first quarter of 2022

How to get a home improvement loan

Financing your home remodel could be as simple as applying for a personal loan. Each lender has their own unique application process, but you’ll typically have to verify your personal information and income.

  1. Check your credit score: You can check your score for free with LendingTree. Your credit score is calculated based on your activity on your credit report. You can request a copy of your credit report from all three credit bureaus at AnnualCreditReport.com.
  2. Determine how much you need to borrow: Estimate the cost of your home improvement project, accounting for the cost of materials and contractor fees. Be careful not to overborrow or you’ll end up paying interest unnecessarily.
  3. Shop around with different lenders: Many lenders let you prequalify for a personal loan with a soft credit inquiry, which won’t affect your credit score. This can help you determine eligibility and estimate loan terms.
  4. Compare APRs: Once you have some prequalification offers in hand, compare your loan options. You’ll typically want to choose the loan with the lowest APR, since it’ll cost the least to borrow.
  5. Formally apply for the loan: When you apply for the loan through the lender, they’ll perform a hard credit inquiry, which will impact your credit score by a few points. If approved, most lenders disburse loan funds within a week, but some deposit the money the same business day as approval.

Alternative financing options for home improvement

Which type of loan is best for home improvements? The answer depends on your unique financial situation. The best way to finance home improvements may not be a personal loan, depending on your credit history and financial goals.

Home equity loans

Home equity loans, also known as second mortgages, allow you to tap into the money you’ve invested in your home. Like a personal loan, it’s a lump-sum loan that’s repaid in fixed monthly payments over a set period of time.

You can use the money however you see fit, but many homeowners use home equity loans to reinvest into their home with renovations.

ProsCons

  Low interest rates. Home equity loans typically have lower APRs than unsecured loans, such as personal loans.

  Tax deductions. Borrowers may be able to deduct the interest paid from their taxes.

  Fixed interest rates. Home equity loans typically have fixed interest rates, so your payments will be predictable.

  Your home is used as collateral. If you can’t repay the loan, you risk losing the roof over your head.

  Requires home equity. You’ll need to have 15% equity or more in your home to borrow.

  May have to pay fees. You may have to pay certain costs such as closing costs and appraisal fees.

 

Home equity lines of credit

A home equity line of credit (HELOC) is a revolving line of credit you take out with your home as collateral. The amount you can borrow depends on how much equity you have in your home, and the borrowing structure is similar to that of a credit card.

ProsCons

  Low interest rates. HELOCs typically have lower interest rates than unsecured loans, like personal loans.

  Tax deductions. Borrowers may be able to deduct the interest paid from their taxes.

  You draw what you need when you need it. This flexibility can be good for long-term projects with high budgets, like full kitchen remodels.

  Your home is used as collateral. If you can’t repay the loan, you risk losing the roof over your head.

  Balloon payments. After your interest-only draw period wraps up, you may be stuck with an expensive balloon payment.

  Fees. You may have to pay certain additional costs, such as closing costs and appraisal fees.

  Variable interest rates. Your APR may increase, making it difficult to manage payments.

 

0% APR credit cards

You may be able to avoid paying interest on your home improvements by taking advantage of a credit card with an introductory 0% APR offer.

It seems too good to be true, but here’s how it works: To entice consumers to open a new account, some credit card issuers offer introductory periods during which they don’t charge interest.

Pay the entire balance before the 0% APR ends and you won’t owe anything in interest, making this a potentially inexpensive way to borrow.

ProsCons

  No collateral required. Unlike a HELOC, you don’t risk losing your property if you can’t make payments on the credit card.

  No interest. Assuming you pay off the card within the introductory rate period, you won’t pay anything in interest on the balance.

  Fast funding. If approved, you may be able to start using your new credit card immediately.

  May offer a small credit line. If you’re looking to take on a project with a high budget, this route might not offer as much financing as you need.

  Not all borrowers will qualify. These introductory 0% APR offers are typically reserved for borrowers with good credit.

  You risk paying high interest rates. If you can’t pay off the balance before the introductory period ends, you’ll end up paying credit card interest on the remaining balance.

 

FHA Title 1 loans

FHA Title 1 loans are home improvement loans for low- to moderate-income borrowers without home equity.

These loans are offered by private lenders, but insured through the Federal Housing Administration (FHA). The money from these loans must be used to improve upon certain types of property, such as single-family homes.

ProsCons

  Low, fixed interest rates. The FHA requires lenders to charge the market rate and nothing more.

  No equity needed. Homeowners who don’t have equity in their home may seek an FHA Title 1 loan.

  No credit score requirements. Unlike other types of financing, FHA Title 1 loans don’t require a minimum credit score.

  Limited to certain borrowers. FHA Title 1 loan borrowers need to meet eligibility requirements to qualify.

  Project scope is limited. The funds must be used to make a home “more liveable and useful,” according to the FHA.

  May require collateral. Loans greater than $7,500 are typically secured.

  Insurance premium. Borrowers have to pay a 1% annual insurance premium.

How we chose the best home improvement loans

We looked at 16 lenders that offer home improvement loans to determine the eight best lenders for this type of funding. By offering a detailed and objective account of each lender’s rates and terms, LendingTree’s goal is to provide you with all the information you need to make a financially sound decision specific to your situation.

Here’s the criteria we assessed to choose the best home improvement loan lenders:

  • Flexible loan use
  • Transparent rates and repayment terms
  • Wide range of loan amounts
  • Low fees

Frequently asked questions

Home improvement loans are unsecured and are funded with a lump sum of money. Home improvement loan interest rates are typically fixed, so your monthly payment will be the same each month. Because these loans are unsecured, lenders rely heavily on your credit score and credit history.

The credit score needed to qualify for a home improvement loan depends on the lender. The higher your credit score, the lower the interest rates you may qualify for.

Home improvement loan APRs commonly range anywhere from 6.99% to 36.00%. Keep in mind that you’ll need to have a high credit score and a robust credit profile in order for the lowest rates. In some cases, you may also have to earn above a certain income threshold.

The level of difficulty you’ll encounter when qualifying for a home improvement loan depends on the lender. For instance, LightStream only accepts consumers with good to excellent credit scores and a solid credit history. Others, like Upstart, have lower minimum credit score requirements.