Press "Enter" to skip to content

Which Home Improvement Loan is Right for You?


Making improvements and repairs to your home can be a smart investment as it increases its resale value and becomes even more comfortable to live in.

Homeowners in the U.S are spending billions every year on renovations. But some people often cannot afford to pay such high costs for remodeling so they turn for help by taking out a home improvement loan.

There a several home improvement loans one can take to finance the cost of upgrading a home.

Sometimes an unsecured personal loan can be a good option, while loans like HELOCs and cash-out refinancing might not be ideal for every situation.

And there are so many more loan options out there that might leave you wondering what could be the best decision for you.

We have evaluated the best home improvement loans one can take in 2020. We have compared interest rates, fees, the amount you can borrow, and more information you can use to compare offers and determine which loan would be ideal for you.

Best The Best Home Improvement Loans

How to Compare Home Improvement Loans

Doing some research on home improvement loans, you can find the one with the best rate and terms. The most important things to consider when comparing loans are the following:

  • Annual Percentage Rates: (APRs) represent an annualized cost of the loan, including the fees that lenders charge.
  • Loan Amount: These amounts vary depending on the lender. If your project of remodeling your home has high costs, you can find a lender who is offering high loan amounts.
  • Loan Term: Depending on the loan term, your monthly payments can vary. If it is a long-term repayment loan, then the monthly installments will be more affordable. Although, having a loan with a longer repayment means you’ll pay more interest during the lifetime of the loan.

Best Perks: SoFi

Sofi, an online lender, provides personal loans for home improvement. They can offer up to $100,000. Its fixed rates start from 5.99% up to 18.83% APR. SoFi also offers the option for borrowers to pre-qualify, without acquiring a hard credit inquiry.

In addition to that, SoFi’s unemployment protection enables you to delay your monthly payments in case you are let go from your job.

  • Loan amount: $5,000- $100,000
  • Estimated APR: 5.99–18.83%
  • Term length: 2 to 7 years
  • Fees: no late fees, no origination fees
  • Minimum credit score: 680

Best Rates: LightStream

Looking for an unsecured personal loan to remodel or make improvements to your home, you may find LightStream to be a great option. If you have good credit, the amount you can borrow to cover your costs goes up to $100,000, with APR ranging from 4.99% to 16.99% (when signing up for automatic payments).

This loan also gives the option to borrowers to repay big home improvement loans for up to 12 years. The downside is that it is hard to qualify if you do not have several years of great credit history. Also, the 4.99% rate applies only to borrowed amounts of $10,000–$24,999.

  • Loan amount: $5,000- $100,000
  • Estimated APR: 4.99% — 16.99%
  • Term length: 2 to 12 years
  • Fees: no fees
  • Minimum credit score: 680

Best for Low Fees: Marcus by Goldman Sachs

Marcus by Goldman is a good option if you are seeking a lender who charges no fees. Also, if you only need small renovations to your home, Marcus by Goldman might be ideal as their minimum loan amount starts from $3,500 with rates starting from 6.99% to 28.99%.

Moreover, this lender charges no origination fees. There are also no late fees that the borrower has to pay in case they miss a payment. Nor do they have to pay prepayment fees if the loan is paid off earlier.

  • Loan amount: $3,500- $40,000
  • Estimated APR: 6.99% — 28.99%
  • Term length: 36 to 72 months
  • Fees: no late fees and no origination fees
  • Minimum credit score: 660

Best for Small Improvements: Prosper

Prosper’s home improvement loans could be a great option as it offers a minimum loan amount of $2,000 with repayment terms ranging from 3 to 5 years. The APR starts from 7.95% up to 35.99%. Also, they allow applications for co-borrowers and the average time to receive funding is one to five days.

The downside to this loan is that they charge fees for late repayments and the origination fee ranges between 2.4% to 5% which is also then deducted from your borrowed amount.

  • Loan amount: $2,000- $40,000
  • Estimated APR: 7.95% — 35.99%
  • Term length: 36 or 60 months
  • Fees: A late fee of 5%, origination fee between 2.40%-5%
  • Minimum credit score: 640

Best for Large Home Renovations: Wells Fargo

This lender offers unsecured personal loans for borrowers to innovate their homes. To qualify for this loan, Wells Fargo does not require borrowers to put up collateral to secure financing.

If you are an existing customer of their bank, you might be able to get a lower interest rate. The lender’s rate starts from 5.74% up to 20.24% APR.

  • Loan amount: $2,000- $40,000
  • Estimated APR: 7.95% — 35.99%
  • Term length: 36 or 60 months
  • Fees: A late fee of 5%, origination fee between 2.40%-5%
  • Minimum credit score: 640

Best for Bad Credit: Avant

Avant allows borrowers to secure financing from $2,000 up to $35,000 even if they have a poor credit score and cannot qualify for other home improvement loans.

Though borrowers don’t need home equity to qualify for Avant’s loan and the funding is secured fast, the downside is that their rate starts from 9.95 to 35.99% APR and there’s also an administration fee of 4.75%.

  • Loan amount: $2,000- $35,000
  • Estimated APR: 9.95% — 35.99%
  • Term length: 24 to 60 months
  • Fees: Late fee $25 and administrative fee even up to 4.75%
  • Minimum credit score: 600

To Sum Up

In conclusion, the best type of home improvement loan depends on your home upgrading costs, your finances, and how long you are willing to pay back installments.

All these lender’s terms and features vary considerably so it is best to consider all those options, compare loan amounts, rates, and fees to come up with the best solution for you.