The Best Home Improvement Loans of 2024

Homeowners who are planning a big renovation or remodeling project will want to consider one of the best home improvement loans to ease their financial burden.

Best Overall

The Best Home Improvement Loan Option: SoFi


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The Best Home Improvement Loan Option: LightStream


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Best for Small Projects

The Best Home Improvement Loan Option: Marcus by Goldman Sachs

Marcus by Goldman Sachs

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Homeownership comes with many responsibilities, including the eventual need to perform renovations or repairs as the home ages. But these projects can be expensive, so where can homeowners find the money? A home improvement loan could be the answer homeowners are looking for when they need to help pay for a renovation project. However, determining the best way to finance home improvements takes time and research. It’s crucial for homeowners to compare factors like minimum credit score requirements, maximum loan limits, and interest rates to make sure they find the best home improvement loans for their situation.

The loan types listed here are personal home improvement loans, so it’s important for homeowners to compare any origination fees, late fees, prepayment fees, and other fees associated with each loan before applying. While a particular loan may look good based on the amount a borrower qualifies for and the interest rate, homeowners don’t want to end up paying too much in fees. By reviewing the best home improvement loans available, homeowners can make the best decision for their circumstances—a decision that will pay off in the long run.

  2. RUNNER-UP: LightStream
  3. BEST FOR SMALL PROJECTS: Marcus by Goldman Sachs
  4. BEST BANK: Wells Fargo
The Best Home Improvement Loans Options

What to Consider When Choosing One of the Best Home Improvement Loans

When reviewing the best loan for home improvement, homeowners will want to make sure they compare the key features of each loan. These factors include the interest rate, loan amount, minimum credit score, and loan term offered by each lender. Borrowers want to compare apples to apples whenever possible to ensure they find the best way to pay for home improvements. Comparing the fees required to obtain the loan is also crucial when shopping for the best home renovation loans.

Prequalification and Application

Some, but not all, lenders allow borrowers to prequalify for a home improvement loan, which could give them an idea of the loan amount they might receive, how much their monthly payment could be, and what the repayment terms might entail. To do so, borrowers will need to provide personal information such as their name, address, birth date, Social Security number, and income. They may be asked how they plan to use the loan funds as well.

Lenders will also likely want to check an applicant’s credit score. Prequalifying for a home improvement loan, whether it’s a home equity loan or a personal loan, will typically only require a soft credit inquiry, but it’s worth confirming with the lender. A soft credit check won’t affect a borrower’s credit score, but a hard check will—a hard credit check may dock an applicant’s credit score, but usually only by a few points. Prequalification may take a few minutes or possibly longer. Once borrowers are prequalified, the lender will use their prequalification information as part of the application.

The loan application will contain much of the same information a borrower would provide to prequalify. This includes the personal information listed above, as well as proof of identity, bank statements, and pay stubs. Since underwriters closely inspect a borrower’s finances and credit history, reviewing and approving the application will likely take longer than the prequalification process.

Credit Score

Every lender has its own benchmark for the minimum credit score required to qualify for the best loans for home improvement. While many lenders prefer a minimum credit score of 660, especially for a secured loan, some companies will accept a lower credit score. The trade-off is that interest rates may be higher than those for borrowers with a higher credit score. A general rule is that the higher a borrower’s credit score, the lower their interest rate.

Suppose a borrower is seeking an unsecured home improvement loan, such as a personal loan. In that case, lenders also prefer borrowers with higher credit scores because those borrowers have a better track record of managing debt and appear to be more likely to repay the loan as agreed.

Loan Amount

Not all home loan lenders offer the same loan amounts. Therefore, borrowers will want to determine how much the project will cost so they have a firm idea of how much they need in a home improvement loan. For instance, the average bathroom remodel cost could range anywhere from $6,152 to $16,615. Once borrowers have this information in hand, they will need to shop around to find lenders willing to match the amount they need. Eliminating lenders who are unable or unwilling to offer the loan amount they need will help borrowers narrow down the selection of lenders, which can be helpful when shopping for the best home improvement loans.

Loan Type

When thinking about how to pay for home improvements, homeowners may want to consider all of the different financing options available to them. There are several types of home improvement loans to choose from, which may suit a variety of circumstances. Home equity loans, for instance, allow borrowers to convert their accumulated home equity into funds that can be used to pay for renovations and other expenses. A home equity line of credit (HELOC) also taps into home equity, but disburses funds as a revolving line of credit—similar to a credit card—rather than as a single cash payout. Both options are secured loans and function as second mortgages, meaning that they will use the borrower’s home as collateral. Another home equity-based option is a cash-out refinance, which allows the borrower to access their home equity as a cash payment. The new loan replaces the borrower’s existing mortgage with one that has a higher loan amount, and the borrower can use the cash payment in any way they’d like.

Homeowners could also take out a personal loan for home improvement projects. The upside to a personal loan is that it is an unsecured loan, so borrowers don’t need to worry about putting forward their home as collateral, which could open it up to foreclosure should a borrower default on repaying their loan. However, personal loan rates tend to be significantly higher than those of home equity loans, HELOCs, and other secured loans, so borrowers could wind up paying more interest in the long run. Other options to consider include charging expenses to a credit card—but homeowners will almost certainly pay much more interest than they would compared with taking out a loan—or taking out an FHA 203(k) rehab loan. An FHA 203(k) rehab loan is only available when a borrower initially takes out a loan to purchase a home, however, and the property needs to meet certain criteria to be eligible for this type of financing.


When homeowners are reviewing the terms of a home improvement loan, one key feature they’ll want to look at is the annual percentage rate (APR). The APR reflects the amount someone will pay each year in return for borrowing money from a lender. It includes the interest rate as well as any additional fees the borrower will pay. As such, APR may be a good indicator of the total cost of different financing options when borrowers are comparing home improvement loan rates. The lower the APR is on a loan, the less the borrower will pay over the life of the loan.

Loan interest rates are based on several factors, most notably the borrower’s credit score and income. Typically, the higher a borrower’s credit score, the lower the interest—and by extension, the APR. Also, a higher income can result in a lower APR because it shows someone has the means to repay the loan as agreed.

Lenders may charge a variety of fees when extending loans to homeowners. For instance, origination fees can be assessed when borrowers open a new account with a bank or broker. Borrowers can incur prepayment fees if they attempt to pay off the entire loan amount before the loan terms are over. Lenders want to keep collecting interest for as long as possible, so longer loan terms are more favorable for them. Other fees can include those for loan processing, late payments, or insufficient funds.

Repayment Terms

When it comes to repaying a home improvement loan, term lengths vary based on the lender as well as a borrower’s creditworthiness. The typical repayment term for a home improvement loan is between 1 and 7 years with monthly payments. This only applies to personal loan options, though. Secured loans such as home equity loans, HELOCs, and cash-out refinances will likely run for a much longer time—30 years in many cases. The better a borrower’s credit score, the better their repayment terms typically will be.

It’s a good idea for borrowers to check the repayment terms to see if they will incur a prepayment penalty if they decide to pay off the loan early. Prepayment penalties are less common with secured loans that use home equity, but it may still be worth checking with the lender ahead of time. In some scenarios, the prepayment penalty could be more costly than if the borrower sticks to the repayment terms and pays off the loan as agreed.


Although not all lenders offer discounts for a borrower taking out a home improvement loan, some do. For instance, some lenders will offer a discount if the customer signs up for automatic payments. If a borrower is a current customer with a bank or lender, they also may qualify for a loyalty discount. It’s important for borrowers to ask lenders what discounts they qualify for because this information is not always readily available. Otherwise, a borrower could miss out on additional savings when taking out a home improvement loan.

Our Top Picks

To help borrowers find the best home improvement loans, we compared loan terms and other factors to find the best way to finance home improvements.

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  • Prequalification offered: Yes
  • Loan amount: $5,000 to $100,000
  • Term: 2 to 7 years
  • NMLS Unique Identifier: 1121636


  • No late fees, prepayment fees, or origination fees
  • Borrowers can prequalify with a soft credit check
  • Unemployment protection for borrowers
  • Complimentary career coaching services for members


  • Relatively high minimum credit score requirements

Why It Made the Cut: Unlike many other traditional financial institutions, SoFi offers borrowers the option for prequalification, boasts competitive interest rates, and eliminates late fees, prepayment fees, and origination fees. There’s a lot to like about a home improvement loan from SoFi. The company offers loans with limits as high as $100,000 with no late fees, prepayment fees, or origination fees. SoFi also offers prequalification without a hard inquiry so borrowers can get an idea of what loan amount they could receive, as well as possible loan terms, without hurting their credit score. While SoFi offers competitive interest rates, a borrower will likely need a good credit score to receive a home improvement loan with reasonable rates. SoFi may require a relatively high minimum credit score for borrowers to qualify for financing. That being said, borrowers who cannot meet these requirements may be better served by spending some time to improve their credit before taking on more debt. SoFi also offers unemployment protection to borrowers who lose their jobs during the repayment period. The lender will place the loan into forbearance, during which time the borrower will not owe any payments, although interest will continue to accrue. In addition, SoFi will provide career coaching to help customers move through career transitions, job searches, and more.

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  • Prequalification offered: No
  • Loan amount: $5,000 to $100,000
  • Term: 2 to 12 years
  • NMLS Unique Identifier: 399803


  • Borrowers receive a 0.5 percent discount for using autopay
  • Same-day funding available for loans approved before 2:30 p.m. EST
  • Rate-matching program for eligible borrowers


  • Loan approval requires several years of credit history with multiple account types

Why It Made the Cut: LightStream prides itself on offering loans to borrowers who have a strong history of financial responsibility and good credit across multiple account types. LightStream offers a variety of loan products, including loans for home improvement projects, with competitive interest rates. Borrowers have the option to apply online or use the app and could receive their funds the same day if their loan application is approved before 2:30 p.m. EST. Borrowers may need to have an extensive credit history to qualify for a LightStream home improvement loan. The lender looks at credit history to see if the borrower has various accounts, including credit cards, installment loans (such as a car or student loan), and a mortgage loan. For borrowers who meet these requirements, though, LightStream is a great option to consider. The lender also offers several ways for borrowers to lower the total cost of their home improvement loan. If borrowers sign up for autopay, for instance, they could receive a 0.5 percent discount on their loan. Also, through its Rate Beat Program, LightStream will offer a rate .10 percentage points lower than a competitor’s rate—provided the customer was approved for the lower rate by 2 p.m. Eastern time two business days prior to loan funding. By taking advantage of these discount opportunities, homeowners may wind up paying less interest on their loan.

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  • Prequalification offered: Yes
  • Loan amount: $3,500 to $40,000
  • Term: 2 to 6 years
  • NMLS Unique Identifier: 208156


  • Direct payments to third-party creditors for debt consolidation possible
  • Borrowers can prequalify with a soft credit check
  • Borrowers can defer 1 payment if they make 12 consecutive payments


  • Multiple borrowers are not allowed on a single loan

Why It Made the Cut: Marcus by Goldman Sachs offers solid loan terms to borrowers and even provides prequalification with a soft check, so a borrower’s credit doesn’t get dinged. If a homeowner is planning a small-scale home renovation, Marcus’s $40,000 loan limit may be more than enough to finance the project. And if borrowers make 12 consecutive payments, the lender allows them to defer one payment without accruing interest. This could be helpful if money gets tight during the life of the loan. The company will also allow borrowers to consolidate debt with third-party creditors, which may be advantageous for homeowners who want to spend their funds to both cover renovation costs and pay down debt. Marcus by Goldman Sachs doesn’t offer the option of having multiple borrowers on one loan, so homeowners may not benefit from a cosigner with a great credit score. However, the lender does prequalify borrowers using a soft credit check, so homeowners can see what loan terms they may qualify for without hurting their credit score.

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  • Prequalification offered: No
  • Loan amount: $3,000 to $100,000
  • Term: 1 to 7 years
  • NMLS Unique Identifier: 399801


  • Flexible loan amounts and lending terms available
  • Borrowers can visit brick-and-mortar bank locations
  • Discounts available for existing customers


  • Online application is only available for existing customers

Why It Made the Cut: For those who want to bank with an established financial institution, Wells Fargo offers a lot of flexibility for borrowers looking for a home improvement loan—and existing customers may benefit even more. When shopping with Wells Fargo for a home improvement loan, homeowners can expect a lot of flexibility in loan terms and limits, with a minimum loan amount of $3,000, a maximum loan amount of $100,000, and a minimum 1-year repayment window. In addition, borrowers who already do business with Wells Fargo may receive discounts on their loans to help reduce the cost of financing. Currently, only existing Wells Fargo customers can apply for a home improvement loan online. All other borrowers will need to visit a brick-and-mortar location to complete an application, which may be more convenient for homeowners who prefer to meet face-to-face with an associate to go over their loan options.

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  • Prequalification offered: Yes
  • Loan amount: $1,000 to $50,000
  • Term: 2 to 7 years
  • NMLS Unique Identifier: 1548935


  • Flexible minimum credit score requirements
  • Small loan amounts available
  • Discount available for borrowers with Upgrade checking accounts


  • Wide APR range
  • Borrowers may incur origination fees, late fees, and insufficient funds fees

Why It Made the Cut: If a borrower’s credit history is not in the best shape and they have a lower credit score, Upgrade could be the right lender to provide them with a home improvement loan. A new player in the lending industry (founded in 2017), Upgrade seeks to offer affordable and responsible loans, including home improvement loans. For borrowers with lower credit scores, this could be especially beneficial given the lender’s flexible minimum credit score requirements. Upgrade may also be appealing to homeowners looking to finance smaller renovation projects, as the company’s loan amounts start at $1,000. It’s worth noting that Upgrade offers a wide APR range, so borrowers with low credit scores could be assessed a high interest rate. In addition, Upgrade loans may include several fees, including origination fees, late fees, and insufficient funds fees. However, borrowers who already have an Upgrade checking account could offset some of these costs by qualifying for a membership discount on their home improvement loan.

Our Verdict

When homeowners are shopping for the best home improvement loans, SoFi comes out on top because it doesn’t charge a lot of fees and offers competitive interest rates. LightStream is our runner-up thanks to its rate-matching program and the possibility of same-day funding if approved.

How We Chose the Best Home Improvement Loans

To determine the best home improvement loans, we reviewed several factors for each lender, including minimum credit score requirements, available loan amounts, APRs offered, loan terms, and prequalification options. We also checked to see what, if any, fees may be charged as well as potential discounts. In addition, we looked to see if lenders offered extra benefits to borrowers, such as unemployment protection, same-day funding, and online servicing. Each lender also was reviewed based on its brand reputation. This curated list was developed from extensive research, but each borrower’s individual loan experience may not necessarily reflect the information shared here.

Before You Choose One of the Best Home Improvement Loans

The most straightforward avenue for homeowners starting a home improvement project is to pay with cash. However, not everyone has the money in hand to pay for a large bill, and even those who do may not want to tie up their money in a renovation project. That’s where home improvement loans can be helpful financial tools.

When trying to decide what type of loan is best for home improvements, it’s important to note that not all loan options will fit every borrower’s needs or financial situation. In fact, a personal loan for home improvement projects may not even be the right choice to pay for home renovations in some cases. For instance, if a homeowner doesn’t need a considerable loan amount, they may do better by finding the best credit card for home renovation. Credit cards are simpler to obtain, but even the best credit cards for home improvement may incur higher interest rates. And since monthly expenses can vary, using a credit card can result in ongoing debt that might be difficult to pay off.

On the other hand, for homeowners who need a large loan amount, then a home equity loan or HELOC might offer them a better interest rate and longer loan term than even the best home improvement loan. For example, kitchen remodel costs can run anywhere from $13,388 to $40,000, on average, and homeowners may need to take out a larger loan to cover those expenses. Home equity loans are secured and act as second mortgages, though, so the lender has collateral if a borrower defaults on their payments. This means that the stakes are higher, and if a borrower runs into a situation where they can’t make their payments, the lender could levy their home. Cash-out refinances are another option for homeowners looking to finance major renovations, but they will want to be aware that this loan will replace their existing mortgage with a new home loan. Pursuing a cash-out refinance could extend the length of a homeowner’s mortgage and result in less-favorable loan terms, depending on the timing of the refinance.

In some cases, homeowners may have the skills to tackle home improvement projects on their own without paying for a contractor. DIY home improvement projects are typically better suited for small-scale upgrades like spackling drywall, painting a room, or installing a doorbell camera. Under those circumstances, though, it wouldn’t make much sense to hire a professional or take out a sizable loan. Homeowners may also want to consider federal programs, such as FHA 203(k) rehab loans, to finance their renovation projects. Not all borrowers will be eligible for these programs, though, and financing may only be available in select circumstances.

Cost of Getting One of the Best Home Improvement Loans

Before signing on the dotted line for one of the best home improvement loans, it’s important for borrowers to review the costs of the loan. In addition to the interest rate on the loan, many lenders also charge hefty fees that add to the cost of the loan. For instance, some lenders charge origination fees ranging between 1 and 8 percent of the loan amount. Other expenses could include late payment fees, insufficient funds fees, prepayment penalties, and additional fees that will add to the cost of the loan. The total amount of these fees could make one of the best home improvement loans more costly than other financing options available to pay for home improvements.

Homeowners may want to check the APR of any lender they’re considering when shopping around for the best home improvement loan rate. The APR reflects the total annual cost of borrowing money from a lender, accounting for interest, fees, and closing costs. It may be worthwhile to check a home improvement loan calculator to get a sense of the interest, monthly payments, lender fees, and closing costs that borrowers might owe.

The Advantages of Getting One of the Best Home Improvement Loans

Using one of the best home improvement loans could be the most affordable option for paying for the improvements or repairs a home needs without having to pay a daunting amount of money up front. There are some significant benefits to choosing a home improvement loan, including:

  • Repairs and upgrades can increase a home’s value. Remodeling the kitchen, refinishing hardwood floors, and adding landscaping have some of the best returns on investment.
  • Homeowners don’t have to wait to save up money to repair issues that could otherwise worsen over time and become more expensive to address.
  • Personal home improvement loans typically have fixed monthly payments, so homeowners can budget accordingly and know exactly how much they’re paying.


When shopping for the best home improvement loans, it’s essential for borrowers to know exactly what they are shopping for regarding interest rates, loan amounts, loan terms, and minimum credit score requirements. Having this knowledge beforehand could save homeowners valuable time when talking to lenders. It also could provide insight on how to improve their financial situation before applying for any loan.

Q. What kind of loan should I get for home improvements?

The type of financing a borrower opts for will ultimately depend on the extent of the renovations. For example, an FHA 203(k) rehab loan might be a better choice if a borrower is buying a fixer-upper and needs to complete extensive, whole-home remodeling. Loans that use home equity may offer large loan amounts to fund major renovation projects as well. For instance, a basement remodel costs $21,541, on average, and may require significant financing. On the other hand, borrowers might benefit from one of the best home improvement credit card options or personal loans for small-scale projects.

Q. What credit score do I need to qualify for a home improvement loan?

Many lenders require a minimum credit score of 660 to qualify for a home improvement loan, although some lenders may have lower or higher minimum requirements. When looking into getting a home improvement loan, homeowners are encouraged to check with lenders if they are concerned that their credit score may be too low to secure financing. They may find they can qualify for home improvement loans with bad credit when working with certain lenders.

Q. Are home improvement loans tax deductible?

If the borrower’s home improvement loan is secured by their home, such as with a home equity loan or home equity line of credit, the interest and fees on the loan could be tax deductible. Homeowners can check with a tax professional to determine whether their loan is tax deductible.

Q. Do banks offer home improvement loans?

Yes, many banks, such as Wells Fargo, offer home improvement loans. Some banks offer discounts for existing bank customers, and some borrowers may prefer consolidating their loans and accounts to one financial institution. However, borrowers will want to compare the rates and terms of bank loans against those of other lenders to ensure they’re getting the best deal.

Q. How much can I borrow with a home improvement loan?

Loan amounts vary depending on the lender, the type of loan used, and the borrower’s own qualifications—credit score, existing debt, etc. Eligible borrowers who use a personal loan for home improvement projects may qualify for as much as $100,000 in some cases. A home equity loan or HELOC could have much higher loan limits, although these financing options are based on the amount of home equity borrowers have accumulated.

Q. Should I use my home equity to pay for home improvements?

Using home equity to finance home improvement projects may be a good option for homeowners who have accumulated a significant ownership stake in their property. Home equity loans, HELOCs, and cash-out refinances often provide lower interest rates, larger loan amounts, and longer repayment periods compared with personal loans. On the other hand, both home equity loans and HELOCs are considered second mortgages, which means borrowers will owe two monthly mortgage payments. Cash-out refinances, meanwhile, require borrowers to refinance their mortgage, potentially resulting in higher interest rates and longer repayment terms than those included in their original loan agreement. Any home equity option will use the borrower’s home as collateral, which could lead to foreclosure if the loan is not repaid.

Karon Warren Avatar

Karon Warren

Contributing Writer

Writing for since 2021, Karon Warren has covered home insurance and home loan topics for more than 15 years. She also routinely writes about mortgages, car insurance, and personal finance.