6 Best Home Improvement Loans for 2024


When your house needs some TLC but you don’t have the cash, a home improvement loan may be a suitable option. After all, you could save up and make the repairs over time, but houses really can’t be ignored for long.

If you put off repairs for a year or two, a bit of peeling flashing around your chimney can quickly spiral into structural damage and mold.

Many long-term homeowners will tell you, houses are like babies who need constant pampering before they let you sleep soundly through the night.

No matter what your home renovation needs are, you’ll find that the best home improvement loans come with low interest rates, low fees, flexible loan amounts, and reasonable repayment terms.

6 Best Home Improvement Loans

We’ve combed through the plethora of loans specifically designed for home renovations and came up with our top picks.

1. LendKey

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LendKey is interesting because they lend to both contractors and homeowners. Beyond that, they offer some great perks for both types of borrowers.

Why they’re one of the best:

  • Long repayment options (up to 15 years) to minimize monthly payments.
  • Flexible eligibility requirements for general home improvements.
  • Loan funds are paid directly to the contractor.
  • No hidden fees.
  • Unsecured loans with fixed APRs.
  • Matches borrowers with lenders across the country to find you the best loan terms possible.

LendKey is really changing the way home improvement loans work.

2. SoFi

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SoFi is often considered one of the most user-friendly lenders because nearly everything can be done on the company’s website. Applying for a loan through SoFi is simple, and you can receive a quote in as little as two minutes.

SoFi’s loans come with low interest rates and fixed repayment terms. However, it could take up to a week to receive the funds, which is much longer than what other lenders offer. Loan amounts range from $5,000 to $100,000.

Some advantages of SoFi:

  • A seamless online application process
  • No collateral required
  • Low rates
  • Fixed monthly repayment terms

Here are the possible downsides:

  • Best for borrowers with good credit history
  • Could take up to a week to receive the funds

3. Prosper

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Prosper is a peer-to-peer lender and offers unsecured personal loans to borrowers with good credit. The company provides personal loans up to $40,000, and you need a credit score of at least 640 to apply.

Prosper does charge an origination fee of up to 5%, which can add up quickly. And if you have excellent credit, you may be able to find better rates elsewhere.

A few reasons we like Prosper:

  • No collateral required
  • Flexible loan terms
  • No prepayment fees

Some things you may not like:

  • Charges an origination fee between 2.41% and 5%
  • Borrowers with poor credit may not qualify

4. LendingTree

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As one of the largest lending marketplaces in the country, LendingTree is a great option for home improvement loans. Rather than lend you the money themselves, the company will match you with several lenders who are willing to loan you the money.

The application process is relatively simple; you’ll start by filling out your personal information online. Then, you’ll specify how much you’re looking to borrow and confirm your identity.

Once LendingTree has run your credit score, you’ll receive a list of available loan offers.

Things to like about LendingTree:

  • Easy online application
  • Receive offers from multiple lenders at once
  • LendingTree is highly rated among borrowers

5. Avant

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You don’t need a perfect credit score to get a decent loan. In fact, people with low credit scores can often get loans with Avant.

Why they’re so close to the top:

  • This online lender often reviews applications the same day they’re received.
  • Great customer service available seven days a week.
  • Access to funds is provided very quickly.
  • The funds don’t have to be used for home improvement.

Why they didn’t quite reach gold:

  • Not available in Colorado, Iowa, and West Virginia.
  • They’re a new startup company, so they don’t have a lot of history yet.
  • They offer a loan maximum of $35,000, which is pretty low.
  • Their APRs are a little higher than most other lenders, but that’s because they do try to cater to people with poor credit.

6. Wells Fargo

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With 8,700 branches across the United States, it’s easy to go in and speak with someone at Wells Fargo. That’s always a plus in this day and age.

Why they rank in the top:

  • No origination fees for loans up to $100,000.
  • Interest Rates are pretty decent for unsecured loans, and can be as low as 6.78%.
  • Loan terms of one to five years.

What’s holding them back:

  • The bank has done some pretty shady things as a company lately, one of which is signing up account holders for credit cards without their consent.
  • They’ve also got some pretty substandard customer service reviews lately. You’ve got to take these things with a grain of salt because people are never as much in a hurry to leave a review as they are when they’ve had a bad experience.
  • As of right now, you can’t get home improvement loans online unless you’re already an account holder with Wells Fargo. There’s really no good reason for them to be doing this, especially with it being the golden age of digital banking.

How to Get a Home Improvement Loan

Finding the right loan for you and your project, especially considering your credit usage, can take some time. We can break down the process of getting a home improvement loan into the following steps.

Compare options

Research the best home improvement lenders against each other. Consider any other financing options, such as credit cards and home equity lines. Ideally, you can find the one that costs the least in total interest, has affordable monthly payments, and fits your timeline.

Check your rate and monthly payments

To check the rates available to you, you’ll need to have a pretty clear idea of your budget, so get clear on that as soon as possible. Pre-qualifying is possible through many lenders, especially those online, and will usually involve a soft credit check. Ensure the loan repayment terms work for you and your budget.

Prepare your documents

Once you’ve decided on your lender and loan, they’ll let you know exactly which documents they need from you to apply. This can include things like W-2s, proof of income, proof of address and other financial information required from the lender. If you don’t have good records already, this step could take you some time.


Applying for your loan can typically be done online, if not over the phone. However, in some cases, such as with a small bank or credit union, you may have to apply in person. Most lenders will let you know their decision within a day or two.

If you use a credit union, it can take at least a week for your loan to enter your bank account. However, generally speaking, it takes just a few working days for the funds to arrive. If you get a loan from your current bank, you might even receive your funds after one day.

How to Compare Home Improvement Loans

There are numerous things to consider when choosing from the best home improvement loans. Some of these will be higher on your list of priorities than others, but it’s important to be aware of all the details to make the best choice for you. Here are the major factors to consider:

  • Annual Percentage Rates: The APR represents the cost of the entire loan, so shop around for the lowest interest rates available to you. This will vary depending on your credit score.
  • Loan Amounts: Having a clear idea of your budget helps. This is because not all lenders will allow you to borrow the money you need, particularly if your project is a big one. You’ll also want to avoid borrowing more than you need, so this is a big factor. Getting clear on the minimum loan amount you require is crucial.
  • Loan Terms: Ideally, you can find a loan with terms that allow you to make your monthly payment hassle-free. Consider the length of the repayment terms and weigh them up against the interest rate. Otherwise, you could end up paying more for your loan overall. Also consider whether you’d rather a fixed rate loan over a flexible one.
  • Fees & Penalties: No one ever plans to pay late fees or penalties, but in reality it can happen to anyone. Make sure you search for a lender with the lowest fees available to you, and get clear on the finer details of each loan you’ll consider.

Other Factors to Consider

  • Discounts: Most lenders may allow you to qualify for discounts if you sign up for automatic payments, or pay a fee upfront. Usually, this discount is applied by lowering the interest rate.
  • Pre-Qualification: It’s always worth checking to see if you can pre-qualify for a personal loan, if your credit score is in good shape.
  • Customer Support: Ideally you can use your loan proceeds and pay it back without ever needing service, but we all know how crucial good support is when things go awry. If that peace-of-mind is important to you, you’ll want to find a lender with a great customer service record.
  • Ease of Application: The best home improvement loans will provide you with a straightforward application process, and allow you to receive your funds in a timely manner.
  • Co-Signers: You might like to have the financial support of a co-signer or borrower, or have some help raising your credit score. In this case, you may have to shop around a little to find the right lender, as not all loans with facilitate co-signers.

Frequently Asked Questions

What is a home improvement loan?

Unlike a home equity loan, a home improvement loan does not require the use of anything to secure the loan. There is no collateral, so the lender takes on more of a risk by giving out the loan.

How does the bank compensate for taking on a larger risk?

By charging higher interest rates to the borrower, of course. The interest rate depends on the borrower’s credit and financial situation, increasing more with higher-risk individuals.

How does a home improvement loan work?

A home improvement loan is really a type of personal loan that the borrower chooses to use towards their house. Unsecured home improvement loans, such as personal loans, generally have shorter repayment periods; usually only lasting a few years. On the other hand, home equity loans and home equity lines of credit (HELOCs) have repayment options of up to 20 years.

This means, depending on how much you borrow, the monthly payments are usually higher for personal loans than home equity loans or HELOCs. However, you could pay less in the long run because of the shorter loan term.

If you don’t pay on your home improvement loan, your lender will send your account to a collection agency. However, you can rest easy knowing they are not entitled to take your house.

See also: Best Home Equity Loans of 2024

home improvement

What are the different types of home improvement loans?

There are several types of home improvement loans, and each comes with different benefits and drawbacks. We’ll cover each loan type so you can decide which type of loan is right for you.

Unsecured Personal Loan

The funds from an unsecured personal loan come in one lump sum and are typically paid back in fixed installments. They do not require collateral. Personal loans can generally be used for anything.

Home Equity Line of Credit

A home equity line of credit (HELOC) allows you to use the equity in your home as collateral. If you have equity in your home, this low-interest secured loan may be a better option for you.

Cash-Out Refinancing

A cash-out refinance replaces your existing mortgage with a new one for more than your outstanding loan balance. You withdraw the difference between the two mortgages in cash. You can then use the cash for home remodeling, consolidating higher-interest debt, or other financial goals.

Home Equity Loan

Home equity loans are secured by the equity in your home. So, if you don’t make your monthly payments, the lender will take your home to pay off the debt.

FHA 203(k) Rehab Loan

FHA 203(K) loans are offered by the U.S. Department of Housing and Urban Development (HUD). These loans are a suitable option for those who need the most extensive repairs on a home.

How can you qualify for a home improvement loan?

Qualifying for a home improvement loan is similar to applying for a more general personal loan. You’ll need to provide your Social Security number so that the lender can pull your credit report. The better your credit score, the better interest rate, and loan terms you’ll qualify for.

Lenders also want to see that you have consistent income, so get a few financial documents ready to submit. Depending on your lender, this could include recent tax returns, bank statements, and pay stubs.

Your income compared to your debt obligations is also considered as part of your application. The lower your monthly debt payments compared to your income, the high loan amount you could qualify for.

If you’re having trouble qualifying for a personal loan, you may want to check with your local credit union. Credit unions may have the best home improvement loan rates, especially if you have less than average credit.

What can you use a home improvement loan for?

The lender may also consider the type of home improvement project you’re completing with the loan funds and how it will add to the value of your home. It could be anything “behind the scenes” like fresh insulation, new windows, or foundation repair.

Alternatively, you could also use loan proceeds to upgrade something aesthetic in your home, like a kitchen or bathroom remodel. Swimming pools, decks, and new additions could also be potential home improvement projects with your loan funds.

Ultimately, you need to check with each specific lender to make sure your desired home improvement project qualifies. They made have restrictions on structural issues, or they could be lenient with how you use your funds.

How much can you borrow with a home improvement loan?

The amount you can borrow depends on what type of loan you choose. With a secured loan, like a home equity loan, you can borrow larger sums of money than you can with an unsecured loan, like a personal loan.

What credit score do I need to qualify for a home improvement loan?

Minimum credit score requirements vary by lender and depend on several factors such as loan type and loan amount. For personal loans, the minimum credit score is typically around 660. However, it’s possible to get a bad credit loan with a lower credit score, but it will also come with a higher interest rate.

The minimum credit score needed for home equity loans and lines of credit is generally around 680. However, it may be possible to get approved with lower credit scores.

Is it difficult to get a home improvement loan?

The ease with which you can qualify for home improvement loans depends largely on your credit history, current credit score, and the type of loan you’re seeking. Your loan options will obviously be better if you’ve got an excellent credit score. That said, you will find options for fair credit and bad credit, but loan rates will generally vary depending on these factors.

Most personal loan lenders will simply charge higher interest rates if you have a low credit score, but some lenders will require you to meet the minimum credit score to qualify for your chosen loan funding.

If your credit history isn’t great, you may have to settle for a less accommodating loan agreement or larger loan payments. However, it’s possible that the best loan for you comes from a credit union. It might also be worth your time to search for an online lender, or fixed interest rates.

Regardless of loan term, your credit history and credit score will determine how accessible the best home improvement loans are for you.

Is a home improvement loan secured?

Regular home improvement loans are just personal loans that are used for home renovations and repairs. These types of loans are unsecured. However, there are secured loan options for home upgrades, such as a HELOC and Home Equity Loans. These loans have a higher minimum credit score qualification, and they’re intended for the purchase and building of homes, as well as significant refurbishment.

Personal home improvement loans typically come with a different set of benefits and drawbacks than other types of secured loans.

What are the pros and cons of a home improvement loan?


  • Fixed Payments: Personal loans come with fixed monthly payments, so you can reliably factor them in to your budget in advance.
  • Fast Funding: The proceeds of a personal loan will usually be paid out faster than most secured loans, so you can get started on repairs or upgrades without delay.
  • No Collateral: Unsecured personal loans don’t require collateral. This means you don’t have to worry about the lender seizing assets in the event of default payments.


  • High Rates: With unsecured loans, loan rates are often relatively high to compensate for the increased risk on behalf of the lender.
  • No Tax Benefits: Unsecured personal loans are not eligible for tax deductions, so recouping the cost of the loan might be more challenging.
  • Paid as Lump Sum: Personal loans are paid in one lump sum. This means you’ve got to budget accurately beforehand and work with that initial sum.

Can a home improvement loan increase my home’s value?

We can never know for sure whether home improvements will add to the value of our property. However, there are two key questions that can help us get close to an answer. First, is your home badly in need of repairs or updates? If so, making those improvements could bring it closer to average market valuation. Secondly, how significant are the upgrades you’re planning to make?

Home improvement loans can potentially increase the value of your home, depending on the extent and quality of the work. Small kitchen or appliance upgrades, or upgrades to doors, windows and HVAC, are all examples of relatively minor upgrades. They are unlikely to lead to any real increase in the value of a home.

However, major home renovation projects such as total kitchen refurbishment, basement conversions or even adding a wooden deck can potentially increase the value of your home. At the very least, they should make your home more attractive to potential buyers. This is great if you’re looking to sell quick, or succeed in a competitive market.

Are home improvement loans tax-deductible?

Unfortunately, personal loans used to make home renovations are not tax-deductible. According to the IRS, you can only write off home improvements for secured loans. They must be used to “buy, build or substantially improve a taxpayers’ home that secures the loan.”

So, unless you use your home as collateral against a secured loan, such as a home equity loan, you won’t be able to make tax-deductions. Any kind of unsecured loan used to make renovations will not qualify for what the IRS refer to as a home mortgage-interest deduction.

However, if you do choose to apply for a HELOC or Home Equity loan, you may be able to write off up to $750,000 in interest from your loan. There are three major criteria that determine whether your loan is tax-deductible.

A home improvement loan is tax-deductible if:

  • Your home secures the loan
  • The loan is used to significantly improve your home (repairs and routine maintenance don’t count)
  • The amount of money you deduct is less than $375,000 if filing as a single person or $750,000 if filing jointly.

So, what exactly counts as a significant home improvement for tax purposes?

Substantial home improvement projects include, but are not limited to, upgrades such as:

  • a new bathroom
  • new kitchen
  • new roof
  • adding a deck
  • upgrading or installing central A/C
  • accessory dwelling units
  • major landscaping projects


Finding the best home improvement loan for you is all about having a clear picture of your project and the various loan options that are available to you. Keep in mind that most lenders require a minimum credit score of around 660 for a personal loan. So, if your credit history is poor, you may have to look for online lenders, or consider smaller banks.

Whether you decide to take out a personal loan, utilize HELOC, or even cash out refinance loans, make sure you’ve looked around for the best home improvement loan rates you can find. Some loans are designed to finance home improvement projects. However, personal loans are also popular avenues for those looking to upgrade or repair their home.

The best loans feature repayment terms that will allow you to comfortably make your monthly payment and provide the funds you need for your home improvement project.

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