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Updated November 03, 2017
Are you ready to make some improvements to your home? Are you looking for financing options that offer more flexibility and better rates than you would get putting home improvements on a credit card?
Below, you will find an extensive list of lenders willing to finance home improvements. If you are interested in comparing terms for more loan providers all in one place, check out our comparison tool.
Besides more competitive interest rates, longer terms and higher loan amounts, financing home improvements with an installment loan gives you more flexibility. Most contractors will not accept credit cards, and being able to write a check for a contractor’s bill gives you a larger pool of contractors to choose from. It also provides an opportunity to get financing if you have not yet built enough equity in your home to qualify for a home equity line of credit. A home improvement installment loan is also an unsecured loan and your home will not be used as collateral as it would in a home equity loan or home equity line of credit.
Are You Ready To Apply?
Before you start comparing loans, it is wise to make sure that you are prepared for the loan application process, that your debt-to-income ratio is in good shape, and that you have the proper documentation prepared.
While lending requirements vary by bank, most will require the following things:
- Proof of Income: Lenders want to know that you income is enough to not only meet your current obligation, but to potentially meet the obligation of a new loan as well.
- Low Debt-to-Income ratio: Lenders typically want you to have less than 40% DTI.
- A Decent Credit Score: credit score requirements vary by lender, as you will see below, but excellent or good credit scores will be eligible for the best rates and the offers with no origination fees. It is wise to have a good idea of your credit score before you start applying and comparing offers.
Why A Home Improvement Loan?
Interest Rates: Financing home improvements through a loan rather than a credit card gives you access to interest rates that are often much lower than credit cards. The list below will show that if you have excellent credit, you could see home improvement loan rates as low as 4% with no origination fee.
Easy Application: Online lenders have the easiest loan applications around. The initial application will only do a “soft pull” on your credit, which will not affect your credit score, and will allow you to see your rate.
Shorter Terms: Credit cards, because of their high interest rates and the ability to pay on them for 10 years or more, leave you in debt longer. By choosing a home improvement loan with a term of 36 to 60 months, you not only lower the interest you are paying, you will have the loan paid off in a shorter amount of time, which of course saves you money.
The Ability to Shop Around: Some lenders do a soft pull, which does not affect your credit score. This gives you the confidence to shop around without harming your score. If you’re interested in providers that do a hard pull, be sure to do all your shopping in a 30-day window in order to minimize the impact on your credit score.
Where to Get Your Home Improvement Loan
If you have excellent credit, it is worth applying for the best offers in home improvement loans. Better rates and terms will save you money in the long run.
Here are the top three offers:
- Lightstream*: A great online option for those with excellent credit. It can finance $5,000 to $100,000. Your rate will depend upon the term and the amount of the loan, and is 0.50% higher if you do not enroll in autopay. To qualify, you’ll need good credit, as well as enough income to meet your current obligations and the loan.
24 to 144*
No origination fee
LightStream is the online lending division of SunTrust Bank.... Read More
*Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66.
- Earnest: Earnest offers home improvement loans from $5,000 up to $75,000. It offers no origination fee and terms from 36 to 60 months. Earnest does a hard pull to determine your rate. The minimum credit score needed to apply is 680.
- SoFi*: Fixed rates for loans start at 5.99%. There is no origination fee and SoFi will finance $5,000 up to $100,000.
Minimum Credit Score
24 to 84
No origination fee
SoFi offers some of the best rates and terms on the market. ... Read More
Fixed rates from 5.99% APR to 18.64% APR (with AutoPay). SoFi rate ranges are current as of March 27, 2020 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your creditworthiness, years of professional experience, income and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
Other Options (in alphabetical order)
- Avant*: Offers access to loans from $2,000 up to $35,000 which could be deposited as soon as the next business day. Rates vary from 9.95% to 35.99%. Not available in Colorado, Iowa, West Virginia, and Vermont. Avant branded credit products are issued by WebBank, member FDIC.
- Best Egg: Rates range from 5.99% to 29.99% and it has an origination fee of 0.99% - 5.99%. It offers loans from $3,000 up to $35,000 for 36 or 60 months, and the minimum credit score need to apply is 640.
- Discover: Discover offers home improvement loans with no origination fee. Its rates vary from 6.99% to 24.99% APR and it offers loans of up to $35,000 for 36 to 84 months. You could receive the funds in as little as 1 day, but you must have at least a 0 credit score to apply.
- Freedomplus*: Freedomplus offers home improvement loans up to $40,000 with terms from 24 to 60 months. Its rates vary from 5.99% to 29.99% and there is an origination fee of 0.00% - 4.99%. In order to apply, your credit score must be 0 or greater.
- Karrot: Karrot offers loans to applicants with a minimum credit score of 660. Loan APRs range from 6.44% to 29.27% and origination fees vary from 1.05% - 4.75%. It offers terms up to 60 months and you must have a credit score of at least 660 to apply.
- LendingClub*: With rates ranging from 10.68% to 35.89%. LendingClub is an excellent option for those with lower credit scores, though their minimum credit requirements are not specified. It offers loans up to $40,000 but is not available in West Virginia or Iowa.
- OneMain*: OneMain’s APRs range from 18.00% to 35.99% on loans of up to $20,000. You must have a credit score of at least 550 to apply for a OneMain home improvement loan.
- Peerform: Peerform offers loans up to $25,000 for 36 or 60 months with rates from 5.99% to 29.99%. Its origination fee varies from 1.00% - 5.00%.
- PenFed Credit Union: While there is no origination fee for a home improvement loan from PenFed Credit Union, you must be a member of the credit union to apply. The APR starts at 6.49%, and loans from $500 to $25,000 for 36 to 60 months.
- Prosper: Prosper’s rates vary from 6.95% to 35.99% on loans of up to $40,000. The origination fee ranges from 2.41% - 5.00%.
- Santander: Santander offers loans of up to $50,000 with rates ranging from 6.99% to 16.99% and terms from 24 to 60 months. There is no origination fee, but you must have a credit score of at least 0 to apply.
- Upstart*: Upstart offers loans of up to $50,000 with rates of 6.18% to 35.99% for 36 & 60 months. The minimum credit score needed to apply is 620 and the origination fee varies from Up to 8.00% upfront.
- USAA: Home improvement loans from USAA have no origination fee on loans of up to $50,000. It offers terms of from 12 to 84 months and rates are as low as 6.99%. You must have a credit score of at least 700 to qualify for a loan from USAA and be eligible through a military affiliation.
When shopping around for a home improvement loan, make sure that you not only compare the APR you have been offered, but the origination fee as well. Additionally, be sure the compare all of the factors at the same term. As with any loan, regardless of the bank’s determination of your eligibility, make sure that the loan works with your budget and comfort level.
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Disclaimer: This article may contain links to LendingTree, which is the parent company of MagnifyMoney.