If you’re planning to renovate your home, there are two main ways to fund your project: home equity products or personal loans for home improvement. Home equity loans and home equity lines of credit (HELOCs) are lower-cost options, but they’re also secured loans, so they can be risky in that you could lose your home to foreclosure if you fall behind on payments.

Personal loans can be used for any type of expense, including financing home remodels. If you don’t have much equity in your home or don’t prefer to tap into it, using a personal loan can be a good idea. Read on for our recommendations for the best personal loans for home improvements, tips for qualifying, and a guide on how to apply.

7 Best Personal Loans for Home Improvement

We reviewed 30 lenders who issue personal loans and evaluated them based on factors such as loan amounts, terms, annual percentage rates (APRs), credit score requirements, customer reviews, and ease of application. Here are our recommendations for the seven best personal loans for home improvement.

7 Best Personal Loans for Home Improvement
  • Loan Amounts: $3,500 to $40,000
  • APR: 5.99% to 35.99%
  • Loan Terms: 24 to 60 months
  • Minimum Credit Score: Not Specified

Reach Financial is our top recommendation because of the incredibly low starting APR of 5.99%. If you have a good or excellent credit score of 750 and above, this is a very good option to consider. Reach Financial is also a good choice when you need quick cash, with most borrowers getting funds within 24 hours of approval.

Pros

  • Very low APRs for borrowers with excellent credit
  • Flexibility when it comes to due dates
  • Quick funding within 24 hours of approval

Cons

  • Borrowers with a lower credit score may have APRs up to 35.99%
  • High origination fees of up to 8%
  • Loan Amounts: Up to $100,000
  • APR: 6.99% to 25.49%
  • Loan Terms: 24 to 84 months
  • Minimum Credit Score: 700

LightStream offers loans of up to $100,000 and longer repayment terms, making them ideal for home improvement projects. The company also has some of the lowest APRs on personal loans for home improvement.

There’s no origination fee, but you also won’t be able to prequalify for the loan before you submit an application.  

Pros

  • Larger loan amounts of up to $100,000
  • Lower rates for borrowers with good credit
  • No loan origination fee
  • Longer loan terms of up to 7 years

Cons

  • No option to prequalify
  • The lowest APRs are reserved for borrowers with good to excellent credit
  • Loan Amounts: $1,000 to $50,000
  • APR: 7.80% to 35.99%
  • Loan Terms: 36 to 60 months
  • Minimum Credit Score: 300

Upstart is a good choice if you want a personal loan for home improvement with bad credit. You’ll only need a credit score of 300 to qualify for the loan. Keep in mind that you’ll pay a high interest rate if you have a lower credit score. Upstart also charges an origination fee of up to 12%.

Pros

  • Minimum credit score requirement of 300 is one of the lowest compared to other lenders
  • Easy approvals, even without a credit history
  • Easy online application process

Cons

  • No option to apply with a co-borrower
  • Origination fee of up to 12%
  • Loan Amounts: $2,000 to $36,500
  • APR: 7.99% to 35.99%
  • Terms: 24 to 72 months
  • Minimum Credit Score: 600

LendingPoint offers personal loans for home improvement projects to borrowers with average credit scores of 600 or higher. While the loan amounts are lower than many other lenders on our list, it’s still a good choice for smaller projects due to its relatively low starting APRs and quick funding upon approval.

Pros

  • Quick loan funding within one business day
  • No prepayment penalty
  • Relatively low starting APR for borrowers with good credit

Cons

  • Doesn’t offer joint loans
  • Origination fee of up to 10%
  • Loan Amounts: $2,500 to $40,000
  • APR: 7.99% to 24.99%
  • Loan Terms: 36 to 84 months
  • Minimum Credit Score: 720

Discover Bank offers loans of up to $40,000 with no origination or prepayment penalties. However, it may be difficult for many borrowers to qualify because of the minimum credit score requirement of 720. Once approved and funded, you can easily manage your loan through their mobile app.

Pros

  • No origination fee or prepayment penalty
  • Easy-to-use mobile app to manage loan payments and track your balance
  • Offers a number of ways to pay loan installments

Cons

  • High minimum credit score requirement
  • Doesn’t offer joint loans
  • Loan Amounts: $1,000 to $50,000
  • APR: 8.49% to 35.99%
  • Terms: 36 to 84 months
  • Minimum Credit Score: 580

Upgrade offers personal loans for home improvement to borrowers with credit scores as low as 580. Additionally, it also offers tools to help you improve your credit score. The lender has a mobile app to manage your payments, and there’s no prepayment penalty if you pay off your loan early.

Pros

  • No prepayment penalty
  • Easy-to-use mobile app to manage loan
  • Tools to improve credit score
  • Longer loan terms that offer flexibility in choosing loan payments

Cons

  • Charges returned payment and late payment fees
  • Origination fee of up to 9.99%

7. SoFi

  • Loan Amounts: $5,000 to $100,000
  • APR: 8.99% to 29.99%
  • Loan Terms: 24 to 84 months
  • Minimum Credit Score: 680

SoFi is one of the best lenders for personal loans because of the many perks it offers. The lender offers larger loans of up to $100,000, competitive personal loan rates, and no late fees.

While you’ll need a credit score of at least 680 to qualify, you can also boost your chances of approval by adding a co-applicant to your application.

Pros

  • High loan amounts of up to $100,000
  • No late payment fees
  • Allows co-applicants when other lenders don’t

Cons

  • You may need to pay an origination fee if you qualify for the lowest APRs
  • You’ll need a credit score of at least 680 to qualify

How Does a Personal Loan for Home Improvement Work?

A personal loan for home improvement is an unsecured loan that can be used to fund home repairs, renovations, and upgrades. You’ll receive a lump sum and can repay it over a term of two to 12 years, typically in fixed monthly installments.

You don’t need to tap into your home’s equity or provide collateral to qualify. The interest rate you qualify for will depend on your income, creditworthiness, loan term, and other financial details. Approval and funding are usually fast, so you’ll usually get the money in your bank account within one or two business days. While you won’t risk foreclosure if you miss payments, late or missed payments can have a negative impact on your credit score.

Borrowers with limited income may want to explore other options like a low-income loan. These types of loans can give you a quicker access to funding, making it easier to take care of urgent home improvements or small renovations without straining your budget.

Pros and Cons of Using a Personal Loan for Home Improvement

While you can get quick access to funds for repairs with a personal loan, there are also a few drawbacks you should be aware of before you borrow a loan.

Pros

  • Provides you with cash to finance large renovation projects
  • Fixed interest rates and monthly payments
  • May allow you to add value to your home
  • On-time payments can help you build credit

Cons

  • Interest rates can be high compared to home equity lending products
  • You may pay additional fees, such as origination fees, late fees, and prepayment penalties for the renovation loan, depending on the lender you choose
  • Your credit score can be damaged if you don’t repay the loan as agreed

How To Get a Personal Loan for Home Improvement

Applying for a personal loan for home improvement is usually a simple and straightforward process. Here are the steps you’ll usually need to follow:

  • Determine how much you need to borrow based on the estimates you’ve received for your project.
  • Compare personal loans and home equity loans to determine which financing option is right for you.
  • Pre-qualify to compare the rates of a few different lenders before you submit an application.
  • Select a lender that offers you the required loan amount at a lower APR.
  • Gather documents like proof of address, government-issued photo ID, pay stubs, and W-2s.
  • Fill out the loan application in person or online and submit it.
  • Wait for a decision and sign the loan agreement when you’re approved. You’ll usually get funds in your checking account within one business day.

How To Qualify for a Personal Loan for Home Improvement

You can get a personal loan for home improvement from traditional banks, credit unions, and online lenders. The qualification requirements vary based on the lender, but here’s what most will look at when evaluating your application:

  • Income: You’ll need to provide your income details to demonstrate you have a reliable source and consistent amount of income.
  • DTI: Lenders will calculate your debt-to-income ratio, which measures your monthly debt payments against your gross monthly income to determine if you can afford loan payments.
  • Credit History: When a lender pulls your credit report, they’ll review it thoroughly, to check for things like late payments, bankruptcy filings, foreclosures, and liens.
  • Credit Score: In most cases, you’ll need a good to excellent credit score (670 or above) to qualify for most personal loans for home improvement. While some lenders have a lower credit score requirement, you’ll usually pay a much higher interest rate if you have poor credit.  

How To Compare Personal Loans for Home Improvement

Interest rates for personal loans can vary greatly, so it’s important to compare multiple loan options to get the lowest rates. Here’s how to compare your options:

  • Prequalify to compare the interest rates and repayment terms offered by different lenders to find the best home improvement loans for your needs and your credit profile.
  • Compare the annual percentage rate or APR of different loans instead of the base interest rate since it reflects the true cost of borrowing.
  • Your repayment term will impact how much you’ll pay over the life of the loan. A longer repayment term will provide you with an affordable monthly installment, but you’ll pay more in total interest charges by the time you’re all done.
  • Check the eligibility requirements of different lenders to see which lender you’ll be able to qualify with.

Is a Personal Loan for Home Improvement Right for You?

A personal loan for home improvement can be a good choice if you don’t want to tap into your home’s equity, don’t want to put your home at risk of foreclosure, or when you need funds quickly. However, interest rates for personal loans can be quite high, especially if you have bad credit.

We recommend comparing multiple loan options and using a loan calculator to ensure you can afford the monthly payments. You may also be able to qualify for better home improvement loan rates if you add a co-borrower to your loan application.