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Best home improvement loans in February 2024

Feb 22, 2024

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LightStream: Bankrate 2024 Awards Winner for Best Home Improvement Loan

4.7

Est. APR
8.99- 24.99%
* with AutoPay
Loan term
2-7 yrs*
Loan amount
$5k- $100K
Min credit score
695
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PERSONAL LOANS

Upstart: BEST LENDER FOR BORROWERS WITH LITTLE OR NO CREDIT

4.7

Est. APR
7.80- 35.99%
Loan term
3-5 yrs
Loan amount
$1k- $50K
Min credit score
Not disclosed
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PERSONAL LOANS

Achieve: BEST FOR QUICK APPROVAL

4.6

Est. APR
8.99- 35.99%
Loan term
2-5 yrs
Loan amount
$5k- $50K
Min credit score
620
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PERSONAL LOANS

Citi Personal Loan: BEST FOR MULTIPLE DISCOUNTS

4.6

Est. APR
10.49- 19.49%
Loan term
1-5 yrs
Loan amount
$2k- $30K
Min credit score
720
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PERSONAL LOANS

LendingClub: BEST LENDER FOR EMERGENCY HOME REPAIRS

4.1

Est. APR
9.57- 35.99%
Loan term
2-5 yrs
Loan amount
$1k- $40K
Min credit score
600
See offersArrow Right

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PERSONAL LOANS

Upgrade: BEST FOR FAST FUNDING

4.7

Est. APR
8.49- 35.99%
with AutoPay
Loan term
2-7 yrs
Loan amount
$1k- $50K
Min credit score
600
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

Best Egg: BEST LENDER FOR BORROWERS WITH FAIR CREDIT

4.7

Est. APR
8.99- 35.99%
Loan term
3-5 yrs
Loan amount
$2k- $50K
Min credit score
600
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

Prosper: BEST LENDER FOR ONLINE-ONLY EXPERIENCE

4.7

Est. APR
8.99- 35.99%
Loan term
2-5 yrs
Loan amount
$2k- $50K
Min credit score
600
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

Discover: BEST FOR GOOD CREDIT AND FAST FUNDING

4.8

Est. APR
7.99- 24.99%
Loan term
3-7 yrs
Loan amount
$2.5k- $35K
Min credit score
Not disclosed

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How to compare home improvement loan lenders

It's always best to get quotes from a few lenders before applying for a loan so you can determine which can give you the best offer. When comparing lenders, keep an eye on these factors.

  • Approval requirements: Every lender has its own threshold for approving potential borrowers, considering things like your income, credit score and debt-to-income ratio. If you have below-average credit, look for lenders that utilize other approval criteria; some will take into account things like your area of study or job history.
  • Interest rates: The lowest advertised rate is never guaranteed, so compare your actual quotes. When comparing interest rates, also make sure to incorporate any fees or penalties; origination fees or application fees can significantly add to the overall cost of your loan.
  • Loan amounts: The scope of your home project or repair will determine how much you need to borrow. If you are remodeling your kitchen, you will likely need a larger loan than if you were just replacing an appliance.
  • Repayment options: A good home improvement loan lender usually offers multiple repayment terms so you can choose the one that makes the most sense for your situation. 
  • Unique features: Keep an eye out for lenders with any unique perks (or restrictions). Be sure to check that any lender you're considering will allow you to use your loan for the purpose you're intending.
  • Customer service: It's also wise to investigate a company's customer service options, particularly if you prefer in-person service to online. If you need more information, you can always look up reviews about the company or check out its Better Business Bureau profile.

Compare home improvement loan rates from Bankrate’s top picks

LENDER BEST FOR EST. APR LOAN AMOUNT LOAN TERM MIN CREDIT SCORE
LightStream Long-term financing 8.49%-21.74%* (with AutoPay) $5,000-$100,000 2-7 years 695
Upstart Borrowers with little or no credit 7.80%-35.99% $1,000-$50,000 3 or 5 years No requirement
Achieve Quick approval 8.99%-35.99% $5,000-$50,000 2-5 years 620
Citi Multiple discounts 10.49%-19.49% $2,000-$30,000 1-5 years 720
LendingClub Emergency home repairs 9.57%-35.99% $1,000-$40,000 2-5 years 600
Upgrade Fast funding 8.49%-35.99% $1,000-$50,000 2-7 years 600
Best Egg Borrowers with fair credit 8.99%-35.99% $2,000-$50,000 3-5 years 600
Prosper Online-only experience 8.99%-35.99% $2,000-$50,000 2-5 years 600
Discover Good credit and fast funding 7.99%-24.99% $2,500-$40,000 3-7 years 660

A closer look at our top home improvement loan lenders

Here's a deep-dive into each lender, why is the best in each category and specifically who would benefit most from borrowing from the lender.

Lightstream: Best for long-term financing

LightStream
Rating: 4.7 stars out of 5
4.7

Overview: LightStream is an online lender that's a branch of the commercial bank, Truist. It caters to borrowers with good to excellent credit and touts a fast and easy online application process that can be completed through the website or on the mobile app.

Est. APR
7.99%–25.49%
Loan amount
$5k– $100k
Min credit score
695

Upstart: Best lender for borrowers with little or no credit

Upstart
Rating: 4.7 stars out of 5
4.7

Overview: Upstart is an online lending marketplace that uses artificial intelligence (AI) to optimize its lending model and approval model rather than only using a borrower's credit score.

Est. APR
7.80%–35.99%
Loan amount
$1k– $50k
Min credit score
Not specified

Achieve: Best for quick approval

Achieve
Rating: 4.6 stars out of 5
4.6

Overview: Achieve is a digital personal finance company that offers personal loans, home equity loans and debt management resources and tools. Over the past 20 years, the lender has served over a million people, giving it a trusted reputation in the lending industry.

Est. APR
8.99%–35.99%
Loan amount
$5k– $50k
Min credit score
620

Citi Personal Loan: Best for multiple discounts

Citi® Personal Loan
Rating: 4.6 stars out of 5
4.6

Overview: Citi is a global bank that offers a complete hub of financial products and services. Its personal loans are among the best in the industry, featuring a quick application process, same-day approval, zero fees, fast funding and competitive interest rates.

Est. APR
10.49%–19.49%
Loan amount
$2k– $30k
Min credit score
720

LendingClub: Best lender for emergency home repairs

LendingClub
Rating: 4.1 stars out of 5
4.1

Overview: Up until 2021, LendingClub operated as a peer-to-peer lender but has since transitioned to a traditional lender and bank.

Est. APR
9.57%–35.99%
Loan amount
$1k– $40k
Min credit score
600

Upgrade: Best for fast funding with fair credit

Upgrade
Rating: 4.7 stars out of 5
4.7

Overview: In the past five years, Upgrade has made over $21 million in credit available to its customers. Headquartered in San Francisco, but with offices in Phoenix, Montreal and Atlanta, Upgrade offers multiple financial products and services, like credit cards, personal loans and savings accounts.

Est. APR
8.49%–35.99%
Loan amount
$1k– $50k
Min credit score
600

Best Egg: Best lender for borrowers with fair credit

Best Egg
Rating: 4.7 stars out of 5
4.7

Overview: Best Egg is a well-known lender due to its ample benefits and unique member perks. Plus, those with fair credit may qualify, as the lender accepts applicants with a credit score over 600.

Est. APR
8.99%–35.99%
Loan amount
$2k– $50k
Min credit score
600

Prosper: Best lender for online-only experience

Prosper
Rating: 4.7 stars out of 5
4.7

Overview: Prosper is a peer-to-peer lender that matches borrowers with investors, rather than matching borrowers with banks or financial institutions. Established in 2005, the company has established over one million customers, earning itself a trusted reputation in the lending industry.

Est. APR
8.99%–35.99%
Loan amount
$2k– $50k
Min credit score
600

Discover: Best for good credit and fast funding

Discover
Rating: 4.8 stars out of 5
4.8

Overview: Discover personal loans are affordable, offer flexible repayment terms, a low minimum APR and can be used for a variety of purposes — like a home improvement loan. Loan amounts go from $2,500 to $40,000 and borrowers have up to seven years to repay their loans.

Est. APR
7.99%–24.99%
Loan amount
$2.5k– $35k
Min credit score
Not specified

How we made our picks for best home improvement loans

To select the best personal loans, Bankrate’s team of experts evaluated over 30 lenders. Each lender was ranked using a meticulous 20-point system, focusing on four main categories:

  • Checkmark
    Affordability
    The interest rates, penalties and fees are measured in this section of the score. Lower rates and fees and fewer potential penalties result in a higher score. We also give bonus points to lenders offering rate discounts, grace periods and that allow borrowers to change their due date. 
  • Checkmark
    Availability
    Minimum loan amounts, number of repayment terms, eligibility requirements, ability to apply using a co-borrower or co-signer and loan turnaround time are considered in this category.
  • Checkmark
    Customer experience
    This category covers customer service hours, if online applications are available, online account access and mobile apps.
  • Checkmark
    Transparency
    For this factor, we consider how well information is presented to the borrower on the lender’s website. This includes listing credit requirements, rates and fees, in addition to offering prequalification.
Clock Wait
47
years in business
Credit Card Search
30+
lenders reviewed
Loan
20
loan features weighed
Rates
665
data points collected

What to know about home improvement loans

What is a home improvement loan?

A home improvement loan is usually an unsecured personal loan used to pay for home repairs and remodeling projects. Home improvement loans can range from $1,000 to $100,000 and typically have a fixed interest rate and a fixed monthly payment.

When you're approved for a home improvement loan, you receive all funds up front, which you can then use for your project. As soon as funds are disbursed, you'll enter the repayment term, which can last anywhere from one to seven years. During this time, you'll make regular fixed payments on the loan, paying back the principal plus interest.

Types of home improvement loans and their uses

Home improvement loans come in different shapes and forms, these are some of the most common home improvement loans.

Pros and cons of home improvement loans

Consider the benefits and drawbacks of home improvement loans before financing your home improvement project. As with any loan, you should be certain that it's the best decision for your finances before applying.

Green circle with a checkmark inside

Pros

  • Most home improvement loans are unsecured, so you won’t lose your home if you default on your loan.
  • You’re approved the same day or a few days after.
  • Since home improvement loans come with fixed interest rates, you can enjoy predictable payments.
  • They can boost your credit score by adding to your credit mix and payment history.
Red circle with an X inside

Cons

  • You may be on the hook for fees such as origination fees and late fees. This can increase the overall cost of your loan.
  • Some home improvement loans have high APRs, which may cost you thousands of dollars in interest.
  • If you borrow more than you can afford, you risk steering yourself into a cycle of debt.

Where to get home improvement loans 

You can get home improvement loans from the same institutions as you would a personal loan. This includes most banks, online lenders, credit unions and peer-to-peer lenders

If you have good credit and a solid repayment history, then start with your bank to see what rate you're offered. Plus, banks often give pre-existing customers exclusive benefits for borrowing with them again, like extended grace periods or interest rate reductions. If the rates aren't ideal, turn to an online lender. 

Online lenders offer lower interest rates than other lending options. The offers may also be easier to compare since the process and application are completed online. The applications are typically completed within minutes, but this depends on the lender. However, if your credit isn't where you want it to be, then starting with a peer-to-peer lender may be better for you. 

Peer-to-peer lenders may offer lower rates than online lenders and are most likely to approve borrowers with low credit. It's less likely that you'd get approved for a bank or credit union loan with shaky credit or low history, although some may make an exception. As a last resort, you can look to online lenders. While some offer loans for bad credit, the interest rates and fees are often high. 

Home improvement loans vs. home equity refinancing 

Home improvement loans and home equity refinancing may sound similar, but there are a few differences to be aware of before jumping into the process. 

Home improvement loans

  • Approval is largely based on credit score and health. 
  • Collateral isn't always necessary. 
  • Borrowing amounts are determined by your credit and what the lender decides.
  • Doesn't offer tax benefits for the funds used on home improvement-related purchases.

Home equity loans

  • Approval is based on your property value and the amount of equity you have in your home.
  • Your home or property will be used as collateral. 
  • Borrowing amounts are determined by how much home equity you've built up. 
  • Does offer tax benefits (an interest deduction) on funds used to improve your home.

Can I borrow more on my mortgage for home improvement?


Senior Loans Writer

Yes, but the best option may be one you don’t hear a lot about — a renovation loan. Many mortgage lenders will suggest a cash-out refinance, which allows you to borrow more than you owe and pocket the cash difference to use towards your project. However, you can’t borrow more than 80 percent of your home’s current value, which may not be enough for a larger project. A renovation loan like the Fannie Mae Homestyle loan allows you to roll the cost of labor, materials and closing costs into one loan up to 97 percent of your home’s value. What’s even better: The loan is based on the estimated value of your home after renovations, giving you even more borrowing power. There are a few drawbacks. First, the lender will need to approve your project. Second, funds are disbursed in draws, rather than all at once.

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There are several options for borrowing more on your mortgage to pay for repairs and renovation. These include a cash-out refinance, a FHA 203(k) loan, a Fannie Mae HomeStyle loan and a Freddie Mac CHOICERenovation Mortgage. There are also Energy-Efficient Mortgages, or EEMs, that let you finance energy-efficient improvements to your home as part of an FHA or VA mortgage. Homeowners should compare the cost with obtaining a home equity loan or home equity line of credit (HELOC), since those options may be less expensive or more flexible.

Alternatives to home improvement loans

If you’ve determined that a personal loan isn’t the best option for you, look into these alternatives instead.

Frequently asked questions about home improvement loans