Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Personal Loans Best Home Improvement Loans Updated Feb 08, 2024   |   12-min read   |   This article has been reviewed by a Certified Financial Planner™ for accuracy. Written by Jackie Lam, AFC® Written by Jackie Lam, AFC® Expertise: Money management, personal loans, banking, insurance, credit, taxes Jackie is a Los Angeles-based freelance writer specializing in various personal finance topics from money management to credit and insurance. An accredited financial counselor (AFC®), she works with artists and freelance creatives. When not writing, you can find her swimming, hiking, or playing the drums. Learn more about Jackie Lam, AFC® Reviewed by Josh St. Laurent, CFP® Reviewed by Josh St. Laurent, CFP® Expertise: Financial planning, sustainable investing, college planning, retirement planning Josh St. Laurent, CFP®, entered finance with a passion for helping others better understand their relationship with money. He earned a real estate license and insurance licenses before securing a position with a large international broker. He has moved around the United States helping others manage their money. Learn more about Josh St. Laurent, CFP® Getting the right home improvement loan depends on the size of the project and your personal credit score. If you have excellent credit, we recommend LightStream. Top picks for home improvement loans Best overall: LightStreamBest for fair credit: UpgradeBest for thin or new credit: Upstart You have plenty of options to make improvements to your home. A repaved driveway can cover basic wear and tear. Others, such as an extended deck or pool, can boost your home’s value and make it more cozy, attractive, and appealing. Whatever home improvement projects are on your to-do list, you can expect to pay a pretty penny to spruce up your digs. The average kitchen makeover, for example, can cost anywhere from $12,000 to $64,000, which breaks down to $100 to $250 per square foot, according to HomeGuide. And when looking for financing options, a popular—and common—option is a personal loan for your home improvement needs. These loans are often unsecured, which means you don’t need to provide a valuable asset, such as the equity in your home, to back it up. Plus, you get a single lump sum and are responsible for payments over the life of the loan. We’ve done the work and researched the best home improvement loans for excellent, good, fair, and thin credit. Let’s take a look. In this guide: Best home improvement loansPros and cons of home improvement loansShould you take out a home improvement loan?What can I use a home improvement loan for?How to choose a home improvement loanHow to applyAlternativesFAQ Best home improvement loans Your credit score plays a role in determining the home improvement loan amount, terms, and rates you’ll likely get approved for. Credit scores range from 300 to 850 and fall into five categories: Credit scoreRatingUnder 580Poor580 to 669Fair670 to 739Good740 to 799Very Good800+Excellent The higher your score, the more attractive you’ll be in lenders’ eyes. Best for excellent credit: LightStream View Rates Editorial rating: 4.8 out of 5 Unique satisfaction guarantee: Borrowers who are not satisfied with their loan experience can get a $100 refundSame-day funding availableWill beat competitor rates LightStream offers unsecured home improvement loans with a simple, quick online application process. And with personal loan amounts up to $100,000 and repayment terms between 24 months and 144 months, you can use the money for a wide range of projects for your abode. Tap into the funds to install a hot tub, build a swimming pool, install solar panels, or give your kitchen a complete do-over. If you sign up for autopay, Lightstream offers a generous 0.50% discount. It also boasts competitive rates, no fees, no prepayment penalties, and a program that will beat any competitor’s rate as long as you meet certain conditions. LightStream is a terrific choice for homeowners with excellent or good credit. Credit score category: Excellent, goodSoft credit pull to check rates? Not availableDeposit time: As soon as the same dayOrigination fee: 0%Late fee: NoneInterest rates (APR): Starting at 8.99%Repayment terms: 24 – 144 months, depending on the loan purpose Best for good credit: SoFi View Rates Editorial rating: 5 out of 5 Personal loans with autopayUnemployment protection Same-day funding available SoFi is our top choice for borrowers with good credit who are in the market for a home improvement loan. With loan amounts ranging from $5,000 to $100,000, you can use the money for minor repairs or large undertakings. Having strong credit and signing up for autopay, which gets you a 0.25% discount, offers a one-two punch and can help you get the best rates and terms. SoFi also gives you the option to prequalify. If you’re pressed for time, you might be able to get approved for your loan and get same-day funding. Another unique perk? Should you get laid off, SoFi offers unemployment protection to its customers. You might qualify to get a helping hand landing your next job. Same-day funding may also be available. Credit score category: Good Soft credit pull to check rates? YesDeposit time: As soon as the next dayOrigination fee: 0% to 6%Late fee: NoneInterest rates (APR): Starting at 8.99%Repayment terms: 24 – 84 months Best for fair credit: Upgrade View Rates Editorial rating: 4.9 out of 5 Credit health tool to monitor your credit score and get personalized recommendationsMultiple loan options to choose from Loan amounts start at $1,000 For borrowers with bad or fair credit, look no further than Upgrade for a home improvement loan for bad credit. You can get a loan for as little as $1,000, which could be useful if you need a minor repair or update. Upgrade is our top pick for personal loans if you have fair credit for a handful of reasons: the option to check your rate with no strings attached or credit score impact, several repayment options, and speedy funding. And if you pay off your loan ahead of schedule, you can save money on interest fees and won’t pay prepayment penalties. What else do we love about Upgrade? If you’re late on a payment one month, Upgrade offers a 15-day grace period before you have to pay a late fee. As a customer, you’ll have access to free credit monitoring, which can help you improve your credit score. Credit score category: Fair, poorSoft credit pull to check rates? YesDeposit time: As soon as the next dayOrigination fee: 1.85% – 9.99%Late fee: $10Interest rates (APR): Starting at 8.49% Repayment terms: 24 – 84 months Best for thin credit: Upstart View Rates Editorial rating: 4.8 out of 5 Uses artificial intelligence to provide competitive rates based on unique creditworthinessMinimum credit score of 300May consider borrowers with thin or no credit profile Upstart takes our top spot for borrowers looking to finance their home improvement projects and have thin credit or are new to credit. According to Upstart’s website, the minimum credit score to qualify for a personal loan is 300—the lowest possible. And if you don’t have a credit history, Upstart might still consider you. Upstart will look toward lending criteria beyond your credit and income—considering your educational background and employment—when reviewing your application. Other standout features: You can get prequalified in just a few minutes without a hard pull of your credit. Plus, you can get the funds via direct deposit into your account as soon as the next business day. Credit score category: Thin, new to creditSoft credit pull to check rates? YesDeposit time: As soon as the next day Origination fee: 0% – 10% of the loan amountLate fee: 5% of monthly payment amount or $15, whichever is greater Interest rates (APR): Starting at 6.7% Repayment terms: 36, 60, or 84 months Pros and cons of home improvement loans Consider the following before taking out a personal loan for home improvements. Pros Fixed interest rate. Predictable payments each month. No need to offer collateral. Single lump sum upfront. Flexibility, versatility. Longer, sometimes flexible repayment terms. Simple application. Speedy access to funding. Cons Interest rates might be higher than other types of financing. No tax break for using it for home improvements. You may borrow more than you need. Eligibility requirements might be more stringent. Might pay fees and penalties if you fall behind on payments. Higher monthly payments than credit cards. Should you take out a home improvement loan? A home improvement loan might be a solid fit if you know what you’ll use the funds for and have a good idea of your project’s cost. It could also be a strong choice if you have a steady cash flow and feel confident you’ll be able to keep up with the payments. Further, if you’re a homeowner and prefer not to give up the equity in your home to back up the loan, a home improvement loan might be a better fit. To decide, ask yourself these questions: Do you have a good idea of the home repairs or remodels you’d like to use the money for? Have you gotten estimates from contractors for these projects? Do you feel confident you’ll stay on top of payments? Have you shopped around, and do you understand the rates, terms, loan amounts, and fees? What can I use a home improvement loan for? Home improvement loans are like Swiss Army knives in their versatility and flexibility. You can use them for projects from minor repairs to complete renovations. The following are ways you can put the funds from a home improvement loan to use: Basement finishHome improvement loan usesKitchen remodelSwimming poolHot tubDeck and patioSolar panelsAC unitBathroom remodelPaving or repaving drivewayHome additionSeptic tankPlumbing repairsNew roofOutdoor shedNew fence How to choose a home improvement loan As you shop for financing options for your home improvement projects, here’s how to go about deciding whether a loan makes sense: Check qualifications and lender criteria. Lenders have unique financial and credit criteria, but many will look at your credit, debt-to-income ratio, and income. Check the minimum credit and financial requirements. Compare rates. If possible, get prequalified for a loan. You can check what loan amounts, rates, and terms you’re likely to get approved for. Lenders will do a soft credit check, which won’t harm your credit. Among the lenders we reviewed, the following three offer prequalification: SoFiUpstart Upgrade LightStream doesn’t offer prequalification. Review loan amounts, terms, and fees. Rates are just one of the factors you should consider when researching financing options and lenders. Your loan amount, repayment terms, and fees are also significant. Plus, what will your monthly payment be? And can you afford payments? Look at online reviews. Online reviews from trusted sites such as Trustpilot and the Better Business Bureau (BBB) can help you get a better idea of the borrowing experience. How responsive is customer support? And is the application process and funding time as speedy as the company advertises? How to apply for a home improvement loan Once you’ve landed on a lender, here’s a step-by-step guide to the next steps: Gather documentation. Standard information and documentation you’ll provide include your address, desired loan amount, and financial details. To back up your application, you must provide documentation such as your recent pay stubs, bank statements, 1099s or W2s, and tax returns. Other pieces of documentation might include a utility bill and government-issued ID. Prequalify. If this is an option, get prequalified for a loan. Compare rates between several lenders. Apply for a loan. Go through the steps to fill out an online application.Wait for the lender to review your application. The lender will look at your details, and factors such as your income, credit history, and debt-to-income ratio to determine your creditworthiness. You might get word on your loan status as soon as the same day.Get the funds. This might be as soon as the same day, but it could take several days. Alternatives to a home improvement loan If you’re unsure whether a personal loan is the best fit, consider the following options for home improvements. Credit cards If you’re using a credit card, you won’t need to apply for financing. Plus, you can rack up reward points. However, credit cards often have higher interest rates than personal loans. And if you make just the minimum payments, you’ll pay much more in interest until you knock your balance down to zero. Late fees can also be hefty. Home equity loans Like personal loans, most home equity loans have fixed interest rates, so you can expect steady, predictable monthly payments. Plus, you’ll get the funds in a single lump sum upfront. However, to qualify for a home equity loan, you must offer the equity in your home as collateral. This secures the loan. And because home equity loans are secured, they’re often easier to get than personal loans. Plus, many come with lower interest rates. A perk of home equity loans is if you use the money toward home improvements, you could qualify for a tax deduction. A downside? The application process and funding times can take longer than a personal loan. Home equity line of credit (HELOC) Similar to a home equity loan, HELOCs are backed by your home. However, they work like credit cards in that you have a credit limit, can borrow up to the limit during the draw period, repay what you owe, and borrow as you go. While you can borrow funds as you need with a HELOC, they often have variable rates. In turn, your monthly payments are more unpredictable. And it can take longer to process and get the funds in your bank account than a home improvement loan. FAQ What can I use a home improvement loan for? A personal loan for home improvement projects is versatile and flexible. You can use the money you get from the loan for more minor repairs, such as a plumbing issue or repaved driveway, complete home additions and kitchen remodels, and much more. Are there any benefits to using a home improvement loan? The main perks of using a home improvement loan include the following: Flexibility: Use it for a wide range of projects, repairs, and upgrades. No need to offer your home as collateral. They are often easier to get. Most have a fixed interest rate, predictable monthly payment, and several repayment options. What’s better: a home equity loan or a home improvement loan? This depends on your needs, situation, and preferences. Both have fixed interest rates, the same monthly payment, and you’ll get a single lump sum. However, a home improvement loan doesn’t require collateral, and you can get faster financing. A home equity loan often features lower interest rates. Can you take out a home improvement loan with no equity? Unsecured personal loans don’t require you to have equity in your home. Other home improvement loans, such as home equity loans and HELOCs, often require a 15% to 20% loan-to-value (LTV) ratio, i.e., the value of your property against the balance of your mortgage. What are the best home improvement loans for bad credit? The best home improvement loans for borrowers with bad credit are the ones with lower minimum credit score requirements. Sometimes, the lender will consider factors such as your education and employment when deciding whether to offer you financing. However, these loans might have higher interest rates.