Best Home Improvement Loans

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Contributor, Benzinga
October 12, 2022

Home improvements can feel overwhelming at first, but the hard work can prove beneficial in the long run. That's why it's so important to find the best home improvement loans.

In addition to addressing practical issues, fixing and improving your home has the possibility of boosting its market value when you decide to sell it. Improving your home provides a way to address practical needs while adding future value. 

Home improvement loans can be unsecured personal loans that vary in both rates and terms, depending on factors like your credit score. Before taking out a loan, research the available options and get multiple estimates about the work expected to be done on your home. A carefully chosen home improvement loan can help you achieve the house of your dreams. 

Quick Look: Best Personal Loans for Home Improvement

7 Best Personal Loans for Home Improvement 

Loans for home improvement make future renovations and repairs a reality. Before taking out a loan, get several estimates for the cost of your intended home improvement. 

Account for accidents and unforeseen events when asking for the total loan amount. If you feel the sum is too large, consider waiting and saving more money. However, if certain home improvements are desperately needed, consider breaking home repairs into projects categorized by urgency. Consult with a financial adviser and research the loans available to see which one would be best for you. 

SoFi

  • SoFi Personal Loans
    Best For:
    No origination fees
    securely through SoFi Personal Loans's website

    Fixed rates from 8.99% APR to 29.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive.

    Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.

    Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.

SoFi started in 2011 and now has over 3 million members. The company originally focussed on student loans and has since branched out to handle other areas of finance such as banking and investing. 

What makes the offering unique is that SoFi provides a specific home improvement loan that is an unsecured personal loan. Unsecured loans do not require collateral and are thought of as less risky for the borrower. In addition, the loan has the potential for quick approval, which could take less than 24 hours. You’ll make fixed payments over a set term to ensure that there are no mistakes or unnecessary stumbling blocks along the way to repayment. 

SoFi says there is no minimum credit score needed to receive a personal loan but encourages borrowers to work toward achieving higher credit scores before applying. SoFi examines a person’s creditworthiness to determine whether they are a viable candidate for a personal loan. 

Overall, SoFi typically requires higher credit scores for personal loans even though an exact number for a home improvement loan is not clearly stated. 

LightStream

LightStream is a part of Truist Financial Corp. and is often thought of as an online consumer lender. The company offers a rate beat program to remain competitive with other lenders of unsecured loans.

LightStream is unique in that it offers personal unsecured home improvement loans. An unsecured loan does not require capital, while a home equity loan may require equity and be counted as a second mortgage. 

The company offers home improvement loans that do not require collateral. It offers relatively low fixed rates, predictable payments and the ability to have funds directly deposited once you are approved. 

LightStream says excellent credit is needed to receive the lower APR rates so it might not be ideal for all borrowers. 

Upgrade

Upgrade is a financial technology company that offers services ranging from credit health monitoring and Upgrade cards to personal loans and more. The company also offers educational tools to better empower borrowers. 

Upgrade offers unsecured home improvement loans with the funding potentially received within a day. The website allows interested borrowers to check rates online. 

Upstart

Upstart is an artificial intelligence lending (AI) platform, meaning it is centered around both AI and finance, which helps reduce risk for lenders while making the verification process more automated for borrowers. 

Upstart looks at a wide range of factors, including credit score, education and employment history, to determine a borrower’s ability to repay a loan.

Upstart is more flexible when it comes to credit scores and may accept applicants to don’t have sufficient credit history, which occurs when you don’t have a record with creditors. The company advises that scores remain above 300.

Upstart charges late fees. 

Marcus

Named for Goldman Sachs founder Marcus Goldman, Marcus, is owned by Goldman Sachs. It offers a range of home improvement loans that give borrowers the ability to cover a variety of renovations and have multiple projects done at once.

The company doesn’t charge late fees or closing fees and does not require an appraisal, but borrowers should have a credit score of 660 or greater to achieve more favorable APRs.

Discover

Discover is a digital bank that offers payment services. Previously owned by Morgan Stanley, it is now an independent financial company. 

Discover loans help borrowers achieve their goals of adding square footage, improving multiple rooms making their homes more sustainable. It provides loans ranging from $35,000 to $300,000 for major home improvements as well as personal loans starting at $2,500 for smaller projects.

Borrowers have 36 to 84 months to repay personal loans, depending on how much they borrowed. The APR ranges between 5.99% and 24.99%. Discover charges late fees on personal loans. 

Discover recommends credit scores above 620 and encourages scores above 700 for loans over $150,000. 

LendingClub

LendingClub helps consumers compare home improvement lenders. It assists in examining the loan terms and provides educational information about the expected rates. 

Borrowers should still use multiple research tools and get several estimates before deciding on a specific loan — a necessity because the APR can vary.

Home improvement loans can be unsecured personal loans obtained at different levels of credit. However, LendingClub emphasizes that good to excellent credit is key to achieving better rates and terms. 

Home Improvement Personal Loan Requirements and Criteria

Which home improvement personal loans are available to you depends on the amount you want to borrow and your credit score. 

Know your credit score before applying for a home improvement loan. Credit scores tell potential lenders about the amount of risk you present as a borrower.

Although high credit scores are not required to obtain a personal home improvement loan, they help you achieve better rates and terms. Improved rates and terms will give you increased flexibility in terms of repayment. 

Things to Consider Before Getting a Home Improvement Loan

The total amount of a home improvement loan should not overly stretch your budget. Renovations and home improvements have the potential to exceed an estimated budget, so account for additional fees. 

Consult with financial professionals before taking out a loan. Get more than one estimate on the cost of the home improvements to better understand the ideal amount for your loan. If you feel that you could struggle to repay the loan in the future, consider saving more money and taking out a carefully chosen loan in the future. 

Frequently Asked Questions

Q

What is a good credit score for a home improvement loan?

A

A good credit score to get home improvement loan is typically 660 or higher. People with scores in the upper 600s are usually receive loans with lower interest rates and more flexible terms. 

Q

Are home improvement loans tax deductible?

A

Home improvement and personal loans are not tax deductible because they are not viewed as income. 

Q

Is a home improvement loan hard to get?

A

Like most loans, home improvement loans can be hard to get if you don’t have good credit. To ensure that you have the best chance of getting a home improvement loan, you should have a credit score of at least 600.