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Best home improvement loans

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Written by Kevin Payne
Edited by Jana Lynch
SoFi, LightStream and FreedomPlus
architect presenting house plan to a couple

A home improvement loan is a type of personal loan provides you with funds to pay for improvements to your home or property. These might be projects such as updating a bathroom, replacing flooring or ceilings, buying new fixtures or appliances, updating windows or doors or replacing a roof. Home improvement loans make it possible for many people to afford these improvements and pay for them over time.


Key insights

  • Home improvement loans can be used for a variety of projects.
  • Many home improvement lenders offer low- or no-fee loans.
  • Other types of funding might be available if you don’t qualify for a home improvement loan.

Our picks for best home improvement loans

To make our choices for the home improvement loans, we collected 806 data points (26 individual data points for 31 lenders), including customer reviews and overall ratings from ConsumerAffairs readers, for popular lenders. We used these data points to evaluate factors that impact borrowers most, like annual percentage rate (APR), loan minimums, repayment term and funding times, before making our final selections.

Our picks may be Authorized Partners who compensate us. This does not affect our recommendations or evaluations but may affect the order in which the companies appear.

SoFi AUTHORIZED PARTNER
  • $100,000 max loan amount
  • 24- to 84-month repayment terms
  • Minimum credit score: 680
  • User star rating: 3.8

SoFi is a full-service online bank that provides multiple financial services, including banking and investment accounts, lending products, insurance and more. Those with fair credit looking to finance a more expensive home improvement project might want to consider a SoFi loan.

Home improvement loans are available to qualified borrowers who meet lending requirements for age, employment, income, location and other factors. Fixed-rate loans range from $5,000 to $100,000, with repayment terms ranging from 24 to 84 months. SoFi doesn't charge fees on home improvement loans, including origination fees or prepayment penalties. SoFi home improvement loans don’t require collateral.

Loans are available in 49 U.S. states (excluding Mississippi), and same-day funding is possible for some borrowers.

You can read more about SoFi’s products in our review.

  • No hidden fees
  • Pre-qualify without a hard credit pull
  • Funding as fast as same day
  • Higher minimum loan requirement
  • High APRs for some borrowers

What do reviewers say?

The SoFi application process gets mixed reviews from ConsumerAffairs reviewers, with some expressing frustration with being asked to repeatedly provide documentation. Many other borrowers stated they were pleased with the customer service, fast funding and the fact that working with SoFi was easy. Otis from Spring Hill, Tennessee, a ConsumerAffairs reviewer, said, “The application process all-inclusive and very detailed so that all the information necessary was easily available.”


Discover Personal Loans
  • $35,000 max loan amount
  • 36- to 84-month repayment terms
  • Minimum credit score: 680
  • User star rating: N/A*
Learn More
discover personal loans logo

*Not enough user reviews

Discover provides various financial products and services, including credit cards, banking services and more. Its personal loans are available for a variety of purposes, including home improvement. It’s a solid choice for those looking to fund smaller projects.

Home remodeling loans are available in amounts from $2,500 to $35,000. Loan terms range from 36 to 84 months. Discover doesn't charge fees upfront and doesn’t have a prepayment penalty.

Discover Personal Loans are open to borrowers in all 50 U.S. states as well as Washington D.C. and some U.S. territories. Some loans may be funded as quickly as the next business day.

  • Check your rate with no effect on credit
  • No origination fees or prepayment penalties
  • Funding as fast as the next business day
  • Low maximum loan amount compared with competitors
  • Co-signers not permitted
  • 30-day money-back guarantee

What do reviewers say?

No reviews are available from ConsumerAffairs readers for Discover Personal Loans.


LightStream AUTHORIZED PARTNER
  • $100,000 max loan amount
  • 24- to 144-month repayment terms
  • Requires “good-to-excellent” credit profile
  • User star rating: 3.9

LightStream provides personal loans online for various needs, including home improvements. It’s good for those looking for a high loan amount with long repayment term options.

Personal loans are available between $5,000 to $100,000, with many borrowers receiving funding the same day they apply and get approved. LightStream doesn't charge fees on its loans. The online lender also offers longer loan terms than many competitors, with terms ranging from 24 to 144 months.

LightStream loans are available in all 50 U.S. states. The minimum credit score requirement is not disclosed, but the company does say it only approves “good-to-excellent credit profiles.” Funding often happens within one day.

You can read more about LightStream's products in our review.

  • No fees
  • Discount for autopay
  • Will beat competitor rates on unsecured loans with same terms
  • Rate calculator only — no pre-qualification
  • Manage your loan using the LightStream app

What do reviewers say?

Overall, ConsumerAffairs readers are pleased with LightStream’s simple application process and good customer service. This was emphasized by reviewer Connie in New Jersey, who stated, “They offered me a low rate with a reasonable monthly payment and were able to stretch it out for longer than most other banks we looked into. … Website was so simple to upload documents to. Very simple process.”


FreedomPlus AUTHORIZED PARTNER
  • $50,000 max loan amount
  • 24- to 60-month repayment terms
  • Minimum credit score: 600
  • User star rating: 4.1

FreedomPlus is an online lender that offers personal loans from $5,000 to $50,000 for various uses, including home improvement loans.

Loan terms range from 24 to 60 months. Most FreedomPlus personal loans have a loan origination fee of 4.99%, although you could end up with a lower fee. There are no fees for paying off your loan early.

FreedomPlus provides loans through Cross River Bank or MetaBank, but not in all states.

You can read more about FreedomPlus' products in our review.

  • No prepayment penalty
  • Competitive rates for individuals with excellent credit
  • Funding within 24 to 72 hours
  • Higher minimum loan amount
  • Shorter repayment terms than competitors

What do reviewers say?

Reviews from ConsumerAffairs readers are mixed when it comes to FreedomPlus’ customer service. While some felt the service was subpar, often taking too long to respond or unwilling to assist with hardships during the COVID-19 pandemic, one Nebraska reviewer said that working with FreedomPlus was “the easiest and fastest loan process” they’ve experienced, and a reviewer from Ohio echoed those sentiments, saying “the process was quick and painless.”


Marcus by Goldman Sachs
  • $40,000 max loan amount
  • 36- to 72-month repayment terms
  • Minimum credit score: 660
  • User star rating: 3.9

Marcus by Goldman Sachs provides online banking, credit cards, investment and lending products and services. It’s a good option for those looking for a home improvement loan that doesn't require collateral or a home appraisal.

Borrowers can get home improvement loans ranging from $3,500 to $40,000, with repayment terms ranging from three to six years. Loans come without fees — including no late fees — and you can get funds within one to four business days. There is also an on-time payment reward, which allows borrowers one deferred payment after making 12 consecutive payments.

You can read more about Marcus by Goldman Sachs in our review.

  • No fees
  • Savings with autopay
  • Payment deferral reward for making on-time payments
  • No joint applications
  • Lower maximum loan amount

What do reviewers say?

Most of the reviews from ConsumerAffairs readers are about Marcus by Goldman Sachs’ credit card or other banking products. Of reviewers who used a loan, some were upset at poor communication or application denial, while others were pleased with the customer service and loan terms. A New York City reviewer loved their loan experience with Marcus by Goldman Sachs, raving about the bank's excellent client services and how the loan helped raise their credit score.

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    How to get a home improvement loan

    Home improvement loans can help cover upfront costs for home repairs, additions, electrical work, appliance upgrades and more. If taking out a home improvement loan makes sense for your situation, follow the steps below to apply for a loan. The application process may vary depending on the lender and underwriting requirements.

    1. Determine your needs

    Loan amounts and rates vary between lenders. Understanding how much you need to borrow will help you narrow your search. Most lenders allow you to use loan funds to finance whatever home repair projects you want. Some options include:

    Determine how much money you need to borrow to fund your projects. Get quotes, if possible, from contractors and/or other service providers so you can find the best deal and don’t borrow more money than you need.

    2. Know your score 

    Look up your credit score and history to get an idea of where you stand in the eyes of creditors. Lenders typically reserve the best rates for those with excellent credit. Checking your credit reports will also help you spot any negative marks or errors that could affect your eligibility for a loan.

    3. Shop around

    Some lenders allow you to check rates for a personal loan without any hit to your credit score. That's because they rely on soft credit pulls for pre-qualification. Only once you formally apply do most lenders perform a hard credit pull, which can cause your credit score to drop temporarily.

    By shopping around, you can see which lender offers the best rates and terms, including how much you can borrow, the loan length and the APR. It also gives you a sneak peek into what it's like to work with a particular lender.

    4. Apply for a loan

    Once you've narrowed things down to one lender, apply online (or over the phone or in person with some lenders) for a home improvement loan. Depending on the lender, the process could take several business days to complete. You can speed up the process by having all the necessary documentation ready and following up promptly on any lender requests.

    After you are approved, the lender will present you with the loan agreement. Read through it carefully, ask any questions you have, and sign the necessary paperwork. Depending on your lender, you may get funds on the same day you are approved. You can then negotiate with your contractor for the work you need done.

    FAQ

    Is it hard to get a home improvement loan?

    It depends on the applicant. If you have good credit, you will likely have an easier time getting approved than if your credit is fair or poor. However, regardless of your credit score, you must still meet a lender's income, debt-to-income (DTI) ratio and other requirements to qualify for a home improvement loan.

    What are some alternatives to home improvement loans?

    A home improvement loan is not always suitable for everyone. Alternative funding options include a home equity loan, a home equity line of credit (HELOC), mortgage refinancing, credit cards or saving money in a separate fund to cover home improvement expenses.

    Can I get a home improvement loan if I have negative equity?

    Yes, you can qualify for a home improvement loan with no equity or negative equity. Many home improvement loans are unsecured loans and do not require collateral. Lenders look at a borrower's creditworthiness and other factors to determine eligibility for a loan.

    How does a home improvement loan affect your credit score?

    Lenders perform a hard credit inquiry during the loan application process, which lowers your credit score by a bit temporarily. A home improvement loan can improve your credit score by helping you establish on-time payment history, adding to your credit mix or reducing your credit utilization ratio (by replacing credit card debt). On the other hand, if you don’t make monthly payments on time, your credit score could suffer.

    Bottom line

    A home improvement loan helps fund home improvement projects or pay for unexpected or necessary repairs to your home. Before taking out one of these loans, take stock of your options. Compare loan offers from various lenders, and choose a loan from a lender you feel comfortable working with that has the most favorable terms.

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