Home Improvement Loans

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5 Home Improvement Loan Options

LenderLoan TermsBest for...
  • APR: 6.99% to 22.49%*
  • Loan length: 24 to 144 months
  • Loan amount: $5,000 to $100,000
Home improvement loans for good credit
PenFed Credit Union
  • APR: 7.74% to 17.99%
  • Loan length: 12 to 60 months
  • Loan amount: $600 to $50,000
Credit union home improvement loans
  • APR: 7.99% to 23.43%*
  • Loan length: 24 to 84 months
  • Loan amount: $5,000 to $100,000
Low-interest home improvement loans
  • APR: 6.50% to 35.99%
  • Loan length: 36 or 60 months
  • Loan amount: $1,000 to $50,000
Home improvement loans for poor credit
Wells Fargo Bank
  • APR: 5.99% to 21.74%
  • Loan length: 12 to 84 months
  • Loan amount: $3,000 to $100,000
Bank loans for home improvements

*Includes AutoPay discount

How do home improvement loans work?

Home improvement loans are simply personal loans 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. Good-credit borrowers will see lower APRs than fair- and bad-credit borrowers. (Annual percentage rate, or APR, represents the cost of borrowing a loan over the course of a year. A lower APR indicates a cheaper total loan cost.)

Home improvement loan pros and cons


  • 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 and repayment terms, personal loans make it easy to include home improvement spending into 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.


  • Personal loans can come with high interest rates.
    Personal loan APRs can be high, particularly for poor-credit borrowers, which makes them an expensive way to finance home improvements. It may not be worth the return on investment if you get a high APR.
  • There might 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 like these typically have lower APRs.
  • 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 get a home improvement loan

Getting a loan to remodel your house is as simple as applying for a personal loan. Since personal loans are typically unsecured, they can be used to pay for virtually anything. They don’t have the same requirements as some other types of loans like HELOCs, for example, which require you to have equity in your home. All you need for a personal loan is proper identification, as well as a good credit score and debt-to-income ratio.

  1. Check your credit score. You can check your score for free on My LendingTree, or request a copy of your credit report from all three credit bureaus from AnnualCreditReport.com.
  2. Determine how much you need to borrow. Estimate the cost of your home improvement project, making sure to account 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 amount 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 affect your credit score. If approved, you should receive funding for your home improvement project within days or weeks.

See Custom Loan Offers

Comparing home improvement financing companies

Not all personal loan lenders are the same. Some lenders charge fees and prepayment penalties, but there are also no-fee personal loans. Others may offer more options for borrowers with a less-established credit history, while certain lenders cater to those with an excellent credit history. That’s why it’s important to do your research before you settle on a lender for your home improvement loan. No matter what your circumstances are like, here are a few things to look for in a lender...


The lower your APR, the less you’ll pay over the life of the loan. Shopping around for the lowest possible APR for your financial situation can save you money.

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.

Positive reviews

It can be overwhelming to decide which lender is right for you. Read lender reviews to gather perspective from homeowners who have been in your shoes.

Alternative financing options for home improvement

What type of loan is best for home improvements? It depends on your unique financial situation. The best way to finance home improvements may not be a personal loan, depending on your finances. Compare your options in the analysis below.



Home equity loans, also known as second mortgages, let you 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.


  • Low interest rate. 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 rate. 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.
  • Fees. You may have to pay certain costs such as closing costs and appraisal fees.



A 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.


  • Low interest rate. 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 only what you need when you need it. This flexibility can be good for long-term projects with high budgets, such as a total kitchen remodel.


  • 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.
  • Fees. You may have to pay certain costs, such as closing costs and appraisal fees.
  • Variable interest rates. Your APR may increase, making it difficult to manage payments.



You may be able to avoid paying interest on your home improvements by taking advantage of a credit card with a introductory 0% APR offer. It seems too good to be true, but here’s how it works: To entice consumers to open an account, some credit card issuers offer introductory periods in which they don’t charge interest for a set number of months. Pay the entire balance before the 0% APR ends, and you won’t owe anything in interest.


  • No collateral required. Unlike a HELOC, you don’t risk losing your property if you can’t make payments on the credit card.
  • You don’t have to pay interest. Assuming you pay off the card within the introductory rate period, you won’t be paying 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 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.


  • 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.