By: Elizabeth Wells
As of Thursday, May 28, 2020
Few homeowners could remodel their kitchen, build a backyard swimming pool or replace the roof without borrowing the money to pay for it. Unsecured personal loans are popular for home projects because they allow people to upgrade their properties without using their home as collateral or spending emergency funds or retirement savings to cover the cost. All the lenders listed here offer a fast, paperless application and approval process. If approved, you can get the loan money within days.
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When shopping for the best home improvement loan, look for the lowest interest rate, an affordable repayment term and low to no fees. Loan details presented here are current as of the publish date. Check the lenders’ websites for the most up-to-date information. The top lenders listed below are selected based on factors such as APR, loan amounts, repayment terms, credit requirements and broad availability.
| Lender |
APR
|
Max. Loan Amount
|
Min. Loan Amount
|
|---|---|---|---|
| LightStream |
4.99%-14.99% (with autopay)
|
$5,000
|
$100,000
|
| SoFi |
5.99% - 18.64% (with autopay)
|
$5,000
|
$100,000
|
| Marcus by Goldman Sachs |
6.99%-28.99% (with autopay)
|
$3,500
|
$40,000
|
| TD Bank |
4.67%-18.99% (with autopay)
|
$2,000
|
$50,000
|
| LendingClub |
10.68%-38.89%
|
$1,000
|
$40,000
|
| Best Egg |
5.99%-29.99%
|
$2,000
|
$35,000
|
| Upstart |
6.18%-35.99%
|
$5,000
|
$30,000
|
| Prosper |
7.95%-35.99%
|
$2,000
|
$40,000
|
Average home improvement loan rates currently range from 5.99 percent to around 36 percent. While the rate you're quoted depends on many factors, the most important is usually your credit score; the higher your credit score, the lower your rate. Many lenders provide their minimum credit score requirements, as well as the credit score needed to receive the lowest rate. However, even if your score is closer to the minimum, it's still worth going through prequalification, as lenders may also factor in things like your annual income and employment status when determining your rate.
A “home improvement loan” is usually an unsecured personal loan that pays for home repairs and improvements. An unsecured loan does not require you to put up an asset, like your house, as collateral. Loans can range from $1,000 to $100,000 and typically have a fixed interest rate and a fixed monthly payment. They are available at traditional banks, credit unions, online lenders and peer-to-peer lenders.
Here are the best home renovation loans to consider in 2020, along with loan details and profiles of borrowers they best fit:
Overview: The online lending arm of Truist (formerly SunTrust Bank) offers unsecured personal loans big enough for major home projects with competitive rates and up to seven years to repay, if you qualify.
Perks: You can borrow up to $100,000 at a very competitive rate if your credit is excellent. There are no fees or penalties for paying off the loan early.
What to watch out for: LightStream requires good to excellent credit. Rates without AutoPay are 0.5 percent higher. You must borrow at least $5,000.
| Lender | LightStream |
|---|---|
| Bankrate Rating | 4.6 / 5.0 |
| Min. Credit Score | 660 |
| Est. APR | 4.99% - 14.99% (with autopay) |
| Loan Amount | $5,000 - $100,000 |
| Term Lengths | 2 years to 12 years |
| Min. Annual Income | None |
| Fees | None/td> |
Read Bankrate's expert LightStream Review.
Overview: SoFi, an online-only lender, offers personal loans for home improvements ranging from $5,000 to $100,000.
Perks: Repayment terms stretch from two to seven years. SoFi loans do not have origination fees or prepayment penalties. SoFi also has an “Unemployment Protection Program” that temporarily pauses your payments if you lose your job.
What to watch out for: good to excellent credit is required.
| Lender | SoFi |
|---|---|
| Bankrate Rating | 4.7 / 5.0 |
| Min. Credit Score | 680 |
| Est. APR | 5.99% - 18.64% (with autopay) |
| Loan Amount | $5,000 - $100,000 |
| Term Lengths | 2 years to 7 years |
| Min. Annual Income | None |
| Fees | None |
Read Bankrate's expert SoFi Review.
Overview: Marcus by Goldman Sachs is an online lender that offers unsecured personal loans for home improvements. You do not have to have a relationship with Goldman Sachs to apply.
Perks: You can borrow as little as $3,500, which is good for minor fixes around the house. There are no late fees or prepayment fees and the lender has an app for mobile banking.
What to watch for: If your credit is weak, you may not qualify for a loan. It can take up to five days to receive the loan money.
| Lender | Marcus by Goldman Sachs |
|---|---|
| Bankrate Rating | 4.8 / 5.0 |
| Min. Credit Score | 660 |
| Est. APR | 6.99% - 28.99% (with autopay) |
| Loan Amount | $3,500 - $40,000 |
| Term Lengths | 3 years to 6 years |
| Min. Annual Income | None |
| Fees | None |
Read Bankrate's expert Marcus by Goldman Sachs Review.
Overview: For borrowers who want a brick-and-mortar lender, TD Bank has more than 1,200 locations on the East Coast, which are open on weekends. It also offers mobile banking to consumers nationwide.
Perks: TD Bank has three different personal loan products to choose from based on your needs: the TD Express Loan, which makes funds available in as little as 48 hours, the Unsecured Loan, which lets you borrow up to $50,000, and the Secured Loan, which offers a lower interest rate.
What to watch for: TD Bank's unsecured loan products charge late fees of 5 percent or $10, whichever is less, and its secured loan charges an origination fee of $50. You'll also need to have excellent credit to apply for its unsecured loans — a minimum credit score of 700.
| Lender | TD Bank |
|---|---|
| Bankrate Rating | 4.2 / 5.0 |
| Min. Credit Score | 700 for unsecured loans |
| Est. APR | 5.67% - 18.99% (with autopay) |
| Loan Amount | $2,000 - $50,000 |
| Term Lengths | 1 year to 5 years |
| Min. Annual Income | None |
| Fees | Late fee of 5% or $10 for unsecured loans, origination fee of $50 for secured loans |
Overview: LendingClub is a peer-to-peer lender that offers loans up to $40,000 for home improvement projects. You can apply online and get a loan quote without a hard pull on your credit report.
Perks: LendingClub lets you borrow as little as $1,000, which is convenient if the hot water heater or clothes dryer conks out and you’re short of cash. LendingClub also allows co-signers and joint applicants, which makes it easier for people with below-average credit.
What to watch for: There is an origination fee of 21 percent to 6 percent of the loan amount and the late payment fee is the greater of 5 percent or $15. The APRs for borrowers with poor credit are also on the high side, hitting close to 36 percent if your credit is bad.
| Lender | LendingClub |
|---|---|
| Bankrate Rating | 4.5 / 5.0 |
| Min. Credit Score | 600 |
| Est. APR | 10.68% - 35.89% |
| Loan Amount | $1,000 - $40,000 |
| Term Lengths | 3 years or 5 years |
| Min. Annual Income | None |
| Fees | Origination fee: 2% to 6% of loan amount. Late fee: 5% or $15 |
Read Bankrate's expert LendingClub Review.
Overview: Borrowers with little credit experience and a FICO credit score of just 640 may be able to qualify for a home improvement loan with Best Egg. However, if you have a bankruptcy or tax lien if you are working with a credit counselor or debt management company, you are ineligible for a loan. Best Egg home improvement loans allow you to finance big expenses like building a new deck, replacing your garage door and remodeling your kitchen.
Perks: You can borrow as little as $2,000 or as much as $35,000. Borrowers with great credit can get rates starting as low as 5.99 percent and there is no penalty for paying off the loan early.
What to watch for: Best Egg charges origination fees of 0.99 percent to 5.99 percent and there is a $15 fee for late payments.
| Lender | Best Egg |
|---|---|
| Bankrate Rating | 4.7 / 5.0 |
| Min. Credit Score | 640 |
| Est. APR | 5.99% - 29.99% |
| Loan Amount | $2,000 - $35,000 |
| Term Lengths | 3 years or 5 years |
| Min. Annual Income | None |
| Fees | Origination fee: 0.99% to 5.99% of loan amount. Late fee: $15 |
Read Bankrate's expert Best Egg Review.
Overview: Consumers with tainted credit still might be able to qualify for an unsecured home improvement loan with Upstart, a peer-to-peer lender. Upstart home improvement loans allow you to finance home improvement projects like home renovations or unexpected home expenses such as a roof repair.
Perks: There’s no penalty for paying off the loan early. Loan amounts start as small as $5,000 and you can get your loan funds in just one business day.
What to watch for: Loans cannot have co-signers, and there is a late fee of 5 percent or $15, whichever is less.
| Lender | Upstart |
|---|---|
| Bankrate Rating | 3.8 / 5.0 |
| Min. Credit Score | 620 |
| Est. APR | 6.18% - 35.99% |
| Loan Amount | $5,000 - $30,000 |
| Term Lengths | 3 years or 5 years |
| Min. Annual Income | None |
| Fees | Late fee of 5% of unpaid balance or $15 |
Read Bankrate's expert Upstart Review.
Overview: Prosper was founded in 2005 and is a pioneer in the digital lending marketplace. It is a peer-to-peer lender, which matches investors with borrowers. Prosper offers fixed-rate unsecured personal loans to borrowers with good to excellent credit. Prosper’s home improvement loans let you make repairs such as building an outdoor deck or room addition.
Perks: There are no penalties for paying off your loan balance early, and the initial application process will result in a soft pull on your credit, which won’t hurt your score. The paperless application process is quick and borrowers receive their funds within five days on average.
What to watch for: Prosper charges origination fees of 2.41 percent to 5 percent and late fees of 5 percent or $15, whichever is greater. If your credit is not good, you may have to find another lender.
| Lender | Prosper |
|---|---|
| Bankrate Rating | 4.6 / 5.0 |
| Min. Credit Score | 640 |
| Est. APR | 7.95% - 35.99% |
| Loan Amount | $2,000 - $40,000 |
| Term Lengths | 3 years or 5 years |
| Min. Annual Income | None |
| Fees | Origination fee: 2.4% to 5%. Late fee: $15 or 5%. Check fee: $5 or 5% |
Read Bankrate's expert Prosper Review.
To figure out which option is best for you, make sure you know the differences between a home improvement (personal) loan, a home equity loan and a HELOC. Some benefits of home improvement loans include:
Doing home improvement projects makes it less likely you’ll have to pay for expensive repairs down the road. When you replace your roof and gutters, for example, you protect your home from water damage. Some projects add more value to your home than others.
Some home improvement projects are expensive but add little value to your property. Comparing the cost of the project to its value can help you determine your asking price when it’s time to sell.
The projects that recoup the most cost, according to the Remodeling 2020 Cost vs. Value Report, include the following:
Home improvement loans are personal loans, which means they can be used for almost any purpose. This means you can use your home improvement loan for:
Shopping around will help you find the most competitive rate. Once you determine the type of home project you’re going to do, the timeline and cost, it’s time to apply for a loan.
Here’s what you’ll need to have ready before applying for a home improvement loan:
Using a personal loan for home improvements can be a quick and easy way to increase the livability, curb appeal and value of your home.
Start by shopping for a home improvement personal loan that works best for you. Compare offers from a variety of lenders such as banks, credit unions and online marketplaces. The best home improvement lenders have:
If you don’t qualify for a home improvement loan or you can’t find one that’s right for you, consider alternatives like:
No matter what option you go with, research multiple lenders and offers before choosing the best one for you.