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Maybe you have a home improvement project in mind, such as building a deck, remodeling your bathroom, or replacing your roof, but you need money to complete the job. A personal loan could be a good option. A personal loan is a fixed-rate sum of borrowed money, often paid off in monthly installments with a variety of term length options.
The best home improvement loan for you depends on your credit score, which determines the lowest rates you qualify for.
Best Home Improvement Loan for Low Rates: LightStream Personal Loan
LightStream has some of the lowest APRs available. However, the lender has slightly stricter eligibility requirements than some of our other top picks, including several years of credit history, stable income, and few or no payment delinquencies on your credit report.
If you're looking to borrow a large sum of money, LightStream's maximum loan amount of $100,000 is on par with SoFi and is significantly more than most other lenders on our list.
Before applying, you should know that LightStream is only available to borrowers with good credit. If your credit isn't in the best shape, you'll find it hard to qualify.
Best Home Improvement Loan for Payment Flexibility: SoFi® Personal Loan
SoFi has the highest minimum credit score requirement of any lender on our list — you'll need a credit score of at least 680 for SoFi home renovation loans. SoFi also offers a higher maximum loan amount than most other lenders, allowing you to take out up to $100,000.
To take out a loan with SoFi, you'll need to borrow at least $5,000, so it isn't the best option for smaller home improvement projects.
Best Home Improvement Loan for Easy Qualification: Avant Personal Loan
Avant may be the easiest lender to qualify with on our list. Its minimum credit is just a guideline, not a requirement, but most Avant borrowers have a credit score between 600 and 700. If your credit isn't in great shape and you aren't eligible to borrow from companies like Lightstream or SoFi, Avant may be a good choice for you.
The company funds loans for home improvements quickly — if Avant approves your loan by 4:30 p.m. CT Monday through Friday, it often deposits money into your account by the next business day. Avant has great customer service hours, with its phone line open at least 13 hours every day of the week. The lender also has a solid mobile app.
You should also be aware of Avant's low maximum loan limit. You can only borrow up to $35,000 with Avant, which is lower than many other lenders on our list.
Best Home Improvement Loan for Small Loan Amounts: First Tech Fixed Rate Personal Loan
First Tech is one of the best options if you're looking for a small home repair loan for less extensive projects. You can get a First Tech personal loan for as little as $500, the smallest amount of any of our top picks. You'll also avoid the high APRs that come with payday loans. First Tech loans don't have any application, origination, or annual fees, and there's no prepayment penalty.
First Tech doesn't clarify its minimum credit score, so you'll have to apply with the lender to see if you qualify.
Potential borrowers need to watch out for First Tech's membership requirements. Though you need to join First Tech to be eligible to receive a home improvement loan from the credit union, it's pretty easy to qualify for membership. You can join the Financial Fitness Association for $8 to qualify, and you may already be eligible if you live or work in specific parts of Oregon.
Best Home Improvement Loan for Brick-and-Mortar Locations: Wells Fargo Personal Loan
Wells Fargo, one of the oldest and largest banks in the U.S., offers various loan types. Its personal loans offer low interest rates, smaller minimum borrowing amounts, and shorter terms than others. Wells Fargo offers loans between $3,000 and $100,000, with payoff terms as short as 12 months. The bank is the only brick-and-mortar institution on our list, as it's one of the few traditional banks to offer personal loans.
Before taking out a home improvement loan with Wells Fargo, one thing to consider is the lender's trustworthiness issues. Wells Fargo currently has an F rating from the Better Business Bureau, a non-profit organization focused on consumer protection and trust. The BBB measures companies by evaluating businesses' responses to consumer complaints, honesty in advertising, and transparency about business practices.
The bank has faced several federal penalties for improper customer referrals to lending and insurance products, as well as security issues associated with creating fake accounts several years ago. You may feel more comfortable working with another lender in light of this information.
Best Home Improvement Loans for Coborrowers: Prosper Personal Loan
Prosper allows coborrowers on its personal loans, which is particularly useful if your credit score isn't in the best shape and you're worried about qualifying for a home improvement loan. The lender's minimum and maximum loan amounts are some of the lowest on our list, so Prosper could be a good option if you need $50,000 or less.
Most loans for home improvements from Prosper are approved within one day. Depending on your bank, it may take one to three business days to receive funds in your bank account.
Prosper also charges origination fees, which will be deducted from your overall loan proceeds, between 1.00% to 9.99%. Other lenders on our list don't charge origination fees.
Best Home Improvement Loan for Good Credit: Discover Personal Loans
While Discover doesn't specify a minimum credit score requirement, a good credit score of at least 670 is likely necessary. Discover is also one of the best home improvement loans for anyone who wants their money fast. If you opt to receive the funds electronically to a checking or savings account, it should arrive the next business day after you've been approved.
Applying for a personal loan from Discover is easy. You can check your rate and eligibility, then apply online within minutes. Discover also offers competitive rates, but borrowers can avoid some interest charges by paying the loan off early without facing any penalties.
You should know that Discover only offers personal loans of up to $40,000. While this is large enough to cover most home improvement projects, it's less than some other lenders provide.
Best Home Improvement Loan for Fast Funding: Best Egg Personal Loan
As an online lender, Best Egg makes the application process quick and straightforward. You can apply in minutes, and if you qualify, you'll see your rates immediately. Half of all Best Egg borrowers receive their money the day after approval, and the rest within one to three business days after verification.
Best Egg home improvement loans can also be prepaid without any penalty. That means you can pay off your entire balance before the loan term ends, saving you interest.
The major drawback with Best Egg home improvement loans is the origination fee. This is a non-refundable fee you'll pay when you first take out the loan of at least 4.99% on loans with terms of four years or longer.
To receive the best interest rates, Best Egg says you need a credit score of at least 700 and an individual annual income of $100,000 or more.
How to Choose the Best Home Improvement Loan
Here's what you should consider to find the best home improvement loan for you:
- Interest rates. Until you finish repaying a loan, the lender will charge a certain percentage of the money you still owe. This percentage is listed as the annual percentage rate (APR). When shopping for the best home improvement loans, compare APRs from different lenders until you've identified the best rates.
- Fees. Not all lenders charge fees, but many do. Common fees include origination fees when you take out the loan, late payment fees, and prepayment penalties.
- Loan amounts. Each lender provides a range of potential loan amounts. For example, a lender could offer loans between $2,000 and $40,000. If you think your home improvement project will be particularly expensive, search for a lender that provides larger loans.
- Term length. The "term" is how long you'll have to repay the loan. Most lenders offer a range of potential terms. A longer term will decrease your monthly payments, but it will also increase the total amount of interest you have to pay. Try to choose a repayment term that fits your monthly budget.
- Funding time. Some lenders will send you the money almost instantly, while others can take a bit longer. If you need the funds as soon as possible, that could influence which lender you choose.
- Eligibility requirements. Lenders usually determine eligibility by looking at a borrower's credit score and income. Not all lenders specify credit score or income requirements.
How To Get a Home Improvement Loan
To get a personal loan for home improvements, you'll first need to crunch the numbers and get your documentation in order. In addition to finding out your credit score and debt-to-income ratio, you'll need documents that prove your identity, address, employment, and income. These can include W2s, 1099s, bank statements, and income tax returns.
Once you've gathered all that information, you can apply for loan prequalification. In this process, the lender reviews your information and gives you a loan offer with terms you might qualify for. Typically, this involves a soft credit inquiry, which does not affect your credit score. Being pre-approved does not necessarily mean you'll ultimately be approved for a loan. For that, you'll need to submit a full application, which involves a deeper look at your credit profile.
Compare offers from multiple lenders. Choose the one with the amount, estimated monthly payments, interest and fees, and term length that works best for you.
Home Improvement Loan Pros and Cons
Personal loans aren't the only way to finance home improvements. Two popular alternatives are home equity loans and home equity lines of credit. However, each of those uses your home as collateral, while most personal loans are unsecured.
As with any financial decision, be sure to weigh the pros and cons before taking out a personal loan for home improvements.
Pros
- Fixed interest rate and monthly payment
- You probably won't have to put your house up as collateral
- You may be able to borrow more since your loan limit isn't based on home equity
Cons
- Interest rates may be higher since these loans are usually unsecured
- Some lenders charge fees for personal loans, although many do not
- The best rates and terms typically only go to those with good or excellent credit
Home Improvement Loan Alternatives
Home Equity Loans and HELOCs
If you have equity in your home, home equity loans and home equity lines of credit (HELOCs) give you a cheaper alternative to home improvement loans. The interest rates should be lower, and as long as you use the money for home improvements, the interest payments will be tax-deductible.
The major downside with a home equity loan or HELOC is that you'll be using your home as collateral, meaning there's a risk of foreclosure if you fail to pay back the loan. These loans may also require a home appraisal, which means it will take longer to get your funds.
Cash-Out Refinance
A cash-out refinance allows you to replace your existing mortgage with a new one that has a larger loan amount. In many cases, a cash-out refinance can give you a lower interest rate than a home equity loan.
Keep in mind that this option involves replacing your existing mortgage and could result in higher monthly payments. There are also likely to be closing costs associated with the transaction.
Credit Cards
Credit cards are a convenient option for financing home improvement projects, especially if you don't expect to spend a large amount of money. You might earn cash-back rewards and even avoid paying interest by taking out a card with a 0% APR introductory period. Just make sure you have a plan for paying off the balance because the standard interest rates can be incredibly high.
Home Improvement Loans Trustworthiness
Whether you're considering a $5,000 loan or a $20,000 loan, finding the right lender can help improve your loan experience. We've compared each institution's Better Business Bureau score to help you make the best decision possible when choosing a home improvement loan. The BBB evaluates businesses based on factors like their honesty in advertising, transparency about business practices, and responsiveness to consumer complaints. Here is each company's score:
| Lender | BBB Grade |
| LightStream Personal Loan | A |
| SoFi Personal Loan | A+ |
| Prosper Personal Loan | A |
| Avant Personal Loan | A+ |
| First Tech Personal Loan | A+ |
| Wells Fargo Personal Loan | F |
| Discover Personal Loan | A+ |
| Best Egg Personal Loan | A+ |
A majority of our top picks are rated A or higher by the BBB, with the exception of Wells Fargo. A high BBB score does not ensure a positive relationship with a lender, and that you should keep doing research and talking to others who have used the company to get the most helpful information you can.
The BBB gives Wells Fargo an F rating because of the business' failure to respond to 24 complaints and government actions against the business.
Most recently, the Consumer Financial Protection Bureau in December 2022 ordered Wells Fargo to return $2 billion to customers and pay a $1.7 billion penalty for legal violations involving auto loans, mortgages, and deposit accounts. The bank illegally charged fees and interest penalties on auto and mortgage loans. Additionally, it misapplied payments to those loans for many customers.
FAQs About Home Improvement Loans
Common reasons to get a home improvement loan include needing money to cover unexpected home repairs, such as fixing damage from flooding, and paying off renovation projects that will increase the value of your home. Other reasons include financing a new roof and financing solar panels.
The interest rate on a home improvement loan will depend on a variety of factors, including the term of the loan and the borrower's creditworthiness. In general, average personal loan interest rates can range from around 11% to 33%.
Your total cost will depend on the amount you borrow, the APR, how long it takes you to pay off the loan, and any associated fees. The higher the amount and APR, the more your home improvement loan will cost. With a longer term length, you will divide your payments over more time. You'll pay less per month but more in total interest.
The time it takes you to receive your funds depends on your lender. In some cases, you may be able to get your cash the same day as you apply. After approving your home improvement loan, lenders usually send the money relatively quickly. However, there's typically no guarantee on how quickly your loan will be approved.
Each lender has its own credit score requirements for home improvement loans. To qualify for the best home improvement loans with competitive interest rates and flexible terms, you'll likely need a credit score of 580 or higher.
Each lender specifies its maximum loan amount for home improvement loans. While $50,000 is a typical limit, SoFi stands out by offering home improvement loans of up to $100,000.
Why You Should Trust Us: How We Chose the Best Home Improvement Loans
We rate personal loan products on a 1-5 scale in all of our guides and reviews. The overall score is a weighted average that considers several different categories, such as:
- Interest rate (20% of rating)
- Fees (20% of rating)
- Term lengths and loan amounts (15% of rating)
- Funding speed (15% of rating)
- Borrower accessibility (15% of rating)
- Customer support (7.5% of rating)
- Ethics (7.5% of rating)
The different weightings are based on the importance of each category. For instance, interest rates and fees have the most impact on your borrowing experience, while factors such as customer service and company ethics are still significant, but are not as heavily weighted.
See our full ratings methodology for personal loans »
Best Egg Disclosure: Annual Percentage Rates (APRs) range from 6.99%–35.99%. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0.99%–9.99% of your loan amount, which will be deducted from any loan proceeds you receive. The origination fee on a loan term 4 years or longer will be at least 4.99%. Your loan term will impact your APR, which may be higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest APR. For example: a 5-year $10,000 loan with a 9.99% APR has 60 scheduled monthly payments of $201.81; a 3-year $5,000 loan with 6.99% APR has 36 scheduled monthly payments of $152.83.
