Best Home Improvement Loans of February 2024

If your home needs some repairs or you want to tackle big remodeling projects, you might need to take out a loan to meet all your goals.

A home improvement loan is a type of unsecured personal loan. You can use funds to pay for home-related projects, whether you need to repair floors or gut your kitchen.

Best home improvement loans

Best for long repayment terms

LightStream

LightStream has repayment terms up to 144 months, or 12 years, depending on how much you borrow. This is good for borrowers who need to take out a large amount for major home repairs or remodels. Since LightStream offers loans up to $100,000, your monthly payments will be lower with longer repayment terms compared to other lenders that may have shorter repayment terms.

While LightStream doesn’t charge any fees, you need good or excellent credit to qualify with the lowest rates offered. You can also take advantage of the 0.50% autopay, which is one of the best autopay discounts available.

Best for great credit

Discover

Discover offers some of the most competitive interest rates around, but only those with excellent credit can take advantage of the lowest rates. 

Discover has one of the lowest maximum amounts available to borrow, so only go this route if you need to borrow $40,000 or less and meet the requirements to do so.

Best for co-applicants

SoFi

If you’re planning to borrow a lot and want to share the load with your partner or need a co-applicant to qualify for the best rate, SoFi is one of the best options. They don’t charge fees and in some cases, you could get funds disbursed as quickly as the same day your application is approved.

SoFi offers a hardship program and unemployment assistance that helps you out if you lose your job or otherwise can’t repay your loan. While some lenders offer hardship programs, not all of them do and in some cases, you may not qualify for them.

Best for low interest

NavyFederal Credit Union

If you’re a member of the military or are related to someone who is, you can take advantage of low interest rates through NavyFederal. Credit unions are not-for-profit, which gives them the chance to offer lower interest rates compared to for-profit banks and online lenders.

Even if you don’t have great credit, the maximum APR is 18% — much less compared to the rest of the lenders on our list. NavyFederal doesn’t have a minimum credit score requirement, which gives those with poor credit the opportunity to borrow.

Best for bad credit

Upstart

If you don’t have great credit and need to borrow a home improvement loan, you may want to try Upstart. They require at least a 600 credit score and have low borrowing amounts so you don’t have to borrow more than you need.

How to choose the best home improvement loan for you

There are plenty of home improvement loans available, but the best home improvement lenders offer the lowest interest rates, varied repayment terms and both low minimums and high maximum amounts to borrow.

When looking at lenders, see which ones offer prequalification, so you can see if you’re eligible without completing a full application. Prequalification is a soft credit pull and doesn’t cause your credit score to drop. This is a good way to compare lenders to see which ones will offer you the lowest interest rate based on your income and needs.

How to get a home improvement loan

Check and improve your credit

Use free tools from your bank, credit card issuer, or others to check your credit score and report. See if you need to clean up your report and remove errors. If you have any outstanding debt, try to pay it off to give your score a boost before taking out a new loan.

Compare lenders

Since home improvement loans are a type of personal loan, there’s no set standard that all lenders require. Do some research to see which lenders offer the lowest interest rate, the amount you’d like to borrow, and potential repayment terms. See if you qualify for any deals or discounts as well.

Get prequalified

Prequalification lets you check your potential rate and repayment terms when you share some details about your loan needs. If you don’t have great credit, see if potential lenders all you to use a co-signer, co-borrower, or co-applicant to qualify for a loan. Choose a lender that meets your criteria and offers you the best rate and repayment terms.

Complete an application

Once you’ve found a letter, complete a full application. You’ll input income and employment details, personal information, and loan needs. Once you’re done, you’ll approve that the lender can pull your credit and you should get results within a few moments.

Get funds

After you’ve been approved for your loan, set up banking information so your funds can be disbursed. You can also set up a repayment plan and auto-pay so you never miss a payment.

When should you get a home improvement loan

You should consider getting a home improvement loan if:

• You need major home repairs or upgrades and can’t pay the full amount out of pocket.
• You can afford the monthly payments.
• You have a solid credit score that allows you to get the lowest interest rate offered.

You should skip a home improvement loan if:

• The monthly payments are too high for your budget and you can’t adjust repayment terms to lower the monthly amount.
• You don’t have steady employment or reliable income to responsibly repay your loan.
• You don’t need to borrow that much or can use other borrowing methods with lower interest rates to pay for your home improvement needs.

Home improvement loans alternatives

Home equity loan or line of credit

Home equity products let you borrow money using your home’s equity. Interest rates tend to be lower and usually come with longer repayment terms compared to personal loans. But they’re secured and your home is used as collateral.

Credit cards

If you only need a few minor repairs or otherwise don’t need to borrow that much, you may want to use a credit card that offers a 0% APR on purchases for a set amount of time. This allows you to pay for your needs and make reasonable payments as long as you pay off the balance before the promotional period ends, usually after 12 or 24 months, depending on the credit card issuer.

Cash

Saving up for a major expense isn’t available for everyone, especially if you don’t usually have money left over after your regular bills are paid. But if you can stash money away for a home improvement fund, you can avoid taking out a loan altogether, which means you don’t need to worry about adding a monthly payment to your budget or how high or low interest rates are.

Methodology

We compared home improvement loans from dozens of lenders and chose the ones based on repayment terms, APR, and eligibility requirements to find the best home improvement loans offered to the most amount of people.

Frequently asked questions (FAQs)

What is a home improvement loan?

A home improvement loan is a type of personal loan that’s used to pay for home repairs, improvements, or remodeling projects.

How do home improvement loans work?

Home improvement loans let you borrow a lump-sum amount of money and then you’ll make monthly installment payments on your principal balance, plus interest, until your loan is paid in full.

What factors into a home improvement loan rate?

Your rate is determined by your credit score and history, how much you want to borrow, your income and employment, and other debt you have.

Can you get a home improvement loan with bad credit?

Many lenders offer home improvement loans to borrowers with bad credit. Keep in mind that while you might qualify, you could pay more in interest compared to someone with fair, good, or excellent credit. The higher your credit score, the lower your interest rate. The best way to see if you’re eligible is to check your credit score yourself and complete pre-qualifications with various lenders.