Best home improvement loans in December 2020

As of

Few homeowners could remodel their kitchen, build a backyard swimming pool or replace their 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 of the lenders listed here offer a fast, paperless application and approval process. If approved, you can get the loan money within days.

Check Your Personal Loan Rates

Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.

APR from
3.99%*
with AutoPay
Term
2-12yr*
Max. loan amount
$100,000
NEXT
APR from
5.99%
3 or 5 year term
Term
3-5yr
Max. loan amount
$30,000
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APR from
5.99%
with AutoPay
Term
2-7yr
Max. loan amount
$100,000
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Not Rated

APR from
6.49-17.99%
Term
1-5yr
Max. loan amount
$20,000
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APR from
7.95-35.99%
Term
3-5yr
Max. loan amount
$40,000
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APR from
7.98-35.99%
Term
3-5yr
Max. loan amount
$50,000
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APR from
7.99-35.97%
with AutoPay
Term
3-5yr
Max. loan amount
$50,000
NEXT
APR from
9.95-35.99%
Term
2-5yr
Max. loan amount
$35,000
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APR from
10.68-35.89%
with AutoPay
Term
3-5yr
Max. loan amount
$40,000
NEXT
APR from
15.49-34.99%
Term
2-4yr
Max. loan amount
$25,000
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APR from
18.00-35.99%
Term
2-5yr
Max. loan amount
$20,000
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What you need to know about home improvement loans

by Libby Wells
As of Saturday, December 05, 2020

Why trust Bankrate?

Bankrate has been comparing and surveying lenders and financial products for over 40 years. Hundreds of top news organizations rely on Bankrate as a trusted source of information. Bankrate strives to help you make smart, informed decisions about your finances. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is fact-checked to ensure accuracy.

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.

Best home improvement loan rates in December 2020

Lender
Best Home Improvement Lender For
APR
Loan Amount Range
Min. Credit Score
LightStream
Long-term financing
4.99%–16.99% (with autopay)
$5,000–$100,000
660
SoFi
Unemployment protection
5.99%–18.28% (with autopay)
$5,000–$100,000
680
Marcus by Goldman Sachs
Minor home improvements
6.99%–19.99%
$3,500–$40,000
Not specified
TD Bank
Convenience
6.99%–21.99%
$2,000–$50,000
Not specified
LendingClub
Emergency home repairs
10.68%–35.89%
$1,000–$40,000
600
Best Egg
Consumers with limited credit history
5.99%–29.99%
$2,000–$35,000
640
Upstart
Consumers with below-average credit
7.98%–35.99%
$1,000–$50,000
600
Prosper
Online-only experience
7.95%–35.99%
$2,000–$40,000
640

What are today’s home improvement loan rates?

Average home improvement loan rates currently range from around 5 percent to 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.

Summary: home improvement loans in 2020

What is a home improvement loan?

A “home improvement loan” is usually an unsecured personal loan used to pay 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.

How does a home improvement loan work?

When you're approved for a home improvement loan, you receive all funds upfront, which you can then use to make your renovations. As soon as funds are disbursed, you'll enter the repayment term, which can last anywhere from one to 15 years. During this time, you'll make regular fixed payments on the loan, paying back the principal plus interest.

Types of home improvement loans

There are several different kinds of loans you can use to make home improvements. The most common are:

  • Personal loans: These unsecured loans, which are featured on this page, can be used for any reason. Interest rates are based on your credit score, and you don’t have to provide collateral. This may be a good option if you want to avoid using your home to secure a loan.
  • Home equity loans: These are lump-sum loans that are often used for home-related projects and needs. Your home is used to secure the home equity loan. Because of this, you can usually expect a lower interest rate than with a personal loan, but if you miss payments, your home could face foreclosure.
  • Home equity line of credit (HELOC): A HELOC is a revolving line of credit. You can take money out for home-related expenses as needed, rather than as a lump sum. Your home is still used as collateral for a HELOC, and you’ll score lower interest rates because of it.

The best type of loan for home improvements depends on your risk tolerance and the size of your project. While not without risk, a personal loan isn't backed by your home. However, something like a HELOC could be a better choice if you have many home improvements planned over a number of years — and you may be able to deduct the interest paid on your taxes.

Home improvement loan uses

Home improvement loans are personal loans, which means they can be used for almost any type of project, from replacing the hot water heater or air conditioner to a total kitchen renovation. Some of the major improvements you can use your home improvement loan for include:

Home improvement project Estimated cost
Roof repairs $5,500–$10,500
Kitchen remodeling $4,500–$50,000
Bathroom renovations $6,000–$35,000
New inground pool $36,906–$66,582

Source: HomeAdvisor

Best home improvement loans in 2020

To find the best home improvement loans, we combed through interest rates, repayment timelines and fees. Here are the best home renovation loans to consider in 2020, along with loan details and profiles of borrowers they best fit:

  • LightStream: Best lender for long-term financing
  • SoFi: Best lender for unemployment protection
  • Marcus by Goldman Sachs: Best lender for minor home improvement projects
  • TD Bank: Best lender for convenience
  • LendingClub: Best lender for emergency home repairs
  • Best Egg: Best lender for consumers with little credit history
  • Upstart: Best lender for consumers with below-average credit
  • Prosper: Best lender for online-only experience

LightStream: Best lender for long-term financing

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 12 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 percentage points higher, and you must borrow at least $5,000.

Lender LightStream
Bankrate Rating 4.6 / 5.0
Min. Credit Score 660
Est. APR 4.99%–16.99% (with autopay)
Loan Amount $5,000–$100,000
Term Lengths 2 to 12 years
Min. Annual Income Not specified
Fees None

Read Bankrate's expert LightStream Review.

SoFi: Best lender for unemployment protection

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, and the 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. SoFi loans are also not available in Mississippi, and minimum loan amounts may be higher in some states — so make sure to check the terms for your state to make sure you won't have to borrow more than you need.

Lender SoFi
Bankrate Rating 4.7 / 5.0
Min. Credit Score 680
Est. APR 5.99%–18.28% (with autopay)
Loan Amount $5,000–$100,000
Term Lengths 2 to 7 years
Min. Annual Income Not specified
Fees None

Read Bankrate's expert SoFi Review.

Marcus by Goldman Sachs: Best lender for minor home improvements

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 also take up to five days to receive the loan money.

Lender Marcus by Goldman Sachs
Bankrate Rating 4.7 / 5.0
Min. Credit Score Not specified
Est. APR 6.99%–19.99%
Loan Amount $3,500–$40,000
Term Lengths 3 to 6 years
Min. Annual Income Not specified
Fees None

Read Bankrate's expert Marcus by Goldman Sachs Review.

TD Bank: Best lender for convenience

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's unsecured personal loan is available in as little as one business day, and the bank's in-person presence is a nice touch if you would like individual assistance.

What to watch for: TD Bank charges a late fee of 5 percent or $10, whichever is less, and the rate cap is also fairly high at 21.99 percent. Additionally, TD Bank's personal loans are only available to residents of Connecticut, New Jersey, Delaware, New York, Washington, D.C., North Carolina, Florida, Pennsylvania, Maine, Rhode Island, Maryland, South Carolina, Massachusetts, Vermont, New Hampshire and Virginia.

Lender TD Bank
Bankrate Rating 4.2 / 5.0
Min. Credit Score Not specified
Est. APR 6.99%–21.99%
Loan Amount $2,000–$50,000
Term Lengths 3 to 5 years
Min. Annual Income Not specified
Fees Late fee: 5% or $10

Read Bankrate's expert TD Bank Review.

LendingClub: Best lender for emergency home repairs

Overview: LendingClub is a peer-to-peer lender that offers loans of 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 to be approved.

What to watch for: There is an origination fee of 2 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 or 5 years
Min. Annual Income Not specified
Fees Origination fee: 2% to 6%; Late fee: 5% or $15

Read Bankrate's expert LendingClub Review.

Best Egg: Best lender for consumers with little credit history

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. 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 6.99 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 to 5 years
Min. Annual Income Not specified
Fees Origination fee: 0.99% to 6.99%; Late fee: $15; Returned payment fee: $15

Read Bankrate's expert Best Egg Review.

Upstart: Best lender for consumers with below-average credit

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 $1,000, 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 4.5 / 5.0
Min. Credit Score 600
Est. APR 7.98%–35.99%
Loan Amount $1,000–$50,000
Term Lengths 3 or 5 years
Min. Annual Income Not specified
Fees Origination fee: 0% to 8%; Late fee: 5% of unpaid balance or $15; Returned check fee: $15

Read Bankrate's expert Upstart Review.

Prosper: Best lender for an online-only experience

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 renovations like 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 poor, you may have to find another lender, as Prosper's credit threshold is 640.

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 or 5 years
Min. Annual Income Not specified
Fees Origination fee: 2.41% to 5%; Late fee: $15 or 5%; Check fee: $5 or 5%; Insufficient funds fee: $15

Read Bankrate's expert Prosper Review.

FAQ about home improvement loans

How is a home improvement loan different from a home equity loan and HELOC?

The biggest difference between a personal loan for home improvements and a home equity loan or line of credit (HELOC) is that the personal loan is unsecured. Home equity borrowers have to use their homes as collateral, which means that the interest rate on a home equity loan tends to be lower.

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:

  • Unsecured options: Unlike home equity loans and HELOCs, home improvement loans don't require you to use your home as collateral. Instead, lenders rely on your credit score and debt-to-income ratio to determine your creditworthiness and the interest rate on the loan.
  • Shorter repayment periods: Home improvement loans are generally repaid over a few years, depending on the lender. In contrast, home equity loans and HELOCs have repayment options of up to 20 years.
  • Flexibility: The loan amount is not limited by how much equity you have in your home. You can apply for as little or as much money as you need.
  • Lower closing costs: Closing costs on home equity loans can reach thousands of dollars, but many personal loans have no origination fees.

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

Doing home improvement projects makes it less likely that 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:

  • Garage door replacement (94.5 percent cost recouped).
  • New manufactured stone veneer (95.6 cost recouped).
  • Minor to mid-range kitchen remodel (77.6 percent cost recouped).

Are home improvement loans tax deductible?

Personal loans for home improvement are not tax deductible, because they're not secured by your home. Home equity loans and home equity lines of credit, on the other hand, use your home as collateral for the loan. Because of this, you may be able to deduct the interest paid on your loans if the funds were used to "buy, build or substantially improve" the home that was used as collateral.

How to find the best home improvement lender

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:

  • The lowest rates: Look for lenders that offer the lowest home improvement loan interest rates. Even if your credit score isn’t stellar, look for lenders with a low maximum rate. While borrowers with excellent credit will get the lowest rate, you still want to make sure you aren’t paying more than you need to.
  • The largest loan amount: How much can you borrow? If you’re tackling a large renovation, like a new roof, you might need to borrow a significant amount of money. Find a lender that offers as much as you need.
  • The fewest fees: Sometimes lenders charge an origination fee, a late fee or miscellaneous fees on top of your principal and interest payments. Factor in fees when considering a lender's offer.
  • The easiest repayment terms: See how long it’ll take you to repay your loan. Longer repayment periods will lower monthly payments, which is especially important for borrowers seeking large loans. Some lenders have terms as long as seven or even 12 years, depending on how much you borrow.