Finding the Best Home Improvement Loans

Sometimes you don’t want to wait to turn your house into your dream home. If you’re looking to make renovations but don’t yet have the cash flow, a home improvement loan is a solid way to get the funds you need, with terms that won’t hurt your wallet.

Home improvement loans can also help you out in case of emergency repairs. If you have leaky pipes in the basement or a termite problem and can’t wait to save up enough money for repairs, a home improvement loan can help you finance home repairs on your own terms.

Typically these are some of the best personal loans and can be secured quite quickly online, and there are plenty of easy-to-use lending companies that are happy to sort you out.

The best loans for home improvement


Types of home improvement loans

  • Personal home improvement loan: This is a great option if you need a relatively small amount of money and you want to pay the loan off in between 2 to 5 years. Since personal loans to finance home improvement are unsecured loans given out by lending agencies, you don’t need to put up collateral. The interest rate will be higher than for a secured loan, and will typically depend on your credit rating as well as the amount and term of the loan.
  • Personal line of credit: These loans give you a loan in the form of a line of credit you can use for any purpose. These loans typically are unsecure and don’t require collateral, meaning the interest rates can be high. At the same time, these loans do offer you the freedom to draw from the credit line as needed.
  • Home equity loans: If you have equity on your home you can apply for a home equity loan to cover your renovations. You’ll need to borrow against your home, but typically the interest rates are lower than with other loans.

Why get a home improvement loan?

Home renovations can add great value to your house. If you’re looking to sell your house in the next few years, taking a loan to do renovations could be a great way to add value to your closing price which would cover the loan – and then some. Emergencies can also require renovations. A leaky roof could get worse – and more expensive – if you wait until you save up the money to fix it. Get a loan and fix it before it gets more expensive and you’ll end up saving yourself money.

Also, home equity loans are tax deductible and can help you get a bigger refund when you file your taxes, if you needed to sweeten the deal a little more. Finally, your happiness is important. If you plan on living in this house for the foreseeable future, then performing renovations can make you happier in your home, long before you were able to save that money on your own. It’s hard to put a price tag on that.


What to consider when taking out a home improvement loan?

Make sure before agreeing to a loan that you can pay it off within the agreed time frame. If you can’t make the payments on a line of credit over the next 12 to 18 months, you may need to reconsider. When deciding between an unsecured home improvement loan and a home equity loan, you’ll have to reconsider what’s more important: not having to put up collateral with an unsecured home improvement loan, or paying less interest with a home equity loan where your property is used as collateral.

If possible, do your best to predict any possible cost overruns over the cost of the renovation that could potentially require you to take out another loan down the road. It goes without saying, but make sure to use contractors you trust, who will make a proposal and stick to it.


What are the pros and cons of home improvement loans?

ProsCons
  • Wide range of loan amounts
  • Could hurt credit record or lose home if default
  • Tax deductible
  • Interest can be based on market conditions
  • Locked-in rate
  • If real estate declines, home improvement may not help value of home  
  • Improving value of your property can pay for the loan and more  

 

  • Money to pay for repairs before they worsen
 

How to apply for a home improvement loan

Like with any financial decision, you’re going to want to start by doing a lot of research. First find out the total cost of your home improvement project, and if possible leave a little wiggle room in the off chance there is a cost overrun. Shop around with various contractors until you find one with recommendations and the professionalism necessary to get the job done on time and on budget.

Look at your finances and see how much of the renovations you’re able to pay for up-front with cash. This will lower the amount of money you’ll need to take out in the loans, and should help you keep the interest lower.

If you’re looking to get a home equity loan, you may need to get your house appraised.

Decide what matters more to you – paying more interest or higher monthly payments. Finally, after getting all your documents in order, shop around with the leading online lenders, and you should be able to find a company that has what you’re looking for.


Industry leaders for home improvement loans

SoFi​ 

ProsCons
  • Unemployment protection
  • Minimum 660 credit score required
  • No hidden fees
  • Minimum $5,000 loan
  • Personal loans up to $100,000
 

Founded in 2011 to help students repay their student loans, SoFi​ is used to helping borrowers who have very specific needs and often varied credit and financial histories. The application process takes a bit longer than with other companies, but it should still be a breeze for most people. The company advertises no hidden fees and unemployment protection that will freeze your loan payments if you lose your job. Sofi also offers to help you find a new job. You do need a minimum credit score of 660 to qualify, but once you do, SoFi has experience in making customizable loans for less traditional borrowers.

The company offers fixed personal loan rates from 5.49% - 14.24% APR

Visit SoFi


LendingTree

ProsCons
  • Wide range of payment options
  • Possible calls and/or emails down the road
  • Lenders are brought to you and you decide
  • Details can be overwhelming to new borrowers
  • Saves you the trouble of shopping around
 

Founded in 1996, LendingTree​ has for years been a leading name in the online lending industry. The company helps you compare from several different lenders at once and pick the best loan for you based on what you’ve punched in. The company offers to find users a wide range of secured and unsecured personal loans running from $1,000 to $35,000 with APR as low as 6.79%.

LendingTree doesn’t lend out money, the company simply asks you what you’re looking for and then casts a wide net to bring you several possible lenders who can provide the loan you need.

Visit LendingTree


GuidetoLenders

ProsCons
  • Flexible payment plans
  • Limited customer support
  • Specializes in quick loans
  • Cannot guarantee rates
  • One application for several lenders
 

GuidetoLenders​ is another company that shops around for you, presenting you with different loan options that can work for your wallet. The company specializes in financing projects that require quick’s funds, making it a solid option for home renovation loans.

There is no charge for finding you a loan and the company offers flexible loan options, with loans from $1,000 to $40,000 with APRs as low as 3.831%, according to the company website.

The available payment plans are more varied than most companies, ranging from 24 to 84 months.

GuidetoLenders also is devoted to trying to educate borrowers and has many helpful resources on their website. Educational resources for borrowers 24 to 84 months is more than most companies offers. Limited customer support.

Specializes in unsecured personal loans 1k – 40k loans.

Visit GuidetoLenders


LendingClub 

ProsCons
  • Extensive customer service
  • Tax records and credit score of 660+ required
  • Free interest rate quote
  • Application could affect your credit score
  • Proven interest rate savings
 

LendingClub​ is an award-winning peer lending company that offers approval within minutes on loans ranging from $1,000 to $40,000, with APR ranging from 5.99% to 35.89% APR on payment plans between 36-60 months.

The company has an extensive online knowledge base and more than customer service options than many competitors.

The company specializes in consolidating debt and should be available to help you find the right loan option.

Application process requires tax records and a credit score of 660+.

Application requires hard pull credit check which could hurt credit score.

Visit LendingClub


Conclusion

Now more than ever, there’s no reason to postpone putting off those renovation plans you’ve been dreaming about. A home renovation loans is easy to get online with rates and conditions that can fit your needs. Find out what type of work you want to get done, what it should cost you, and then start combing the web, it’s never been easier to find a company that can find you the right home improvement loan.

To read more about any of these loan companies or other companies, check out our in-depth reviews.

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