When preparing to make home improvements, an unsecured personal loan may make a lot of sense—especially if you haven’t built up much equity in your home. While some options like HELOCs, home equity loans, and cash-out refinancing can help you fund your home upgrades, they may not be practical. A personal loan could help you accomplish your dream home improvement project, such as a new kitchen or bathroom. To help you, we reviewed over 50 lenders, evaluating each one for how much you can borrow, interest rates, fees, repayment options, and more to determine the best home improvement loans (that are unsecured) so you can achieve your home goals. These are the best home improvement loan rates to consider.
Best Home Improvement Loans of 2021
|Lender||Why We Picked It||Fixed APR||Minimum Loan Amount||Maximum Loan Amount||Terms||Recommended Credit Score|
|LightStream||Best Overall, Low Rates & Flexible Repayment Options||3.99%-16.99% with autopay*||$5,000||$100,000||24-144 months*||680+|
|SoFi||Best for Large Improvements||5.99%-25.05% with autopay||$5,000||$100,000||24-84 months||680+|
|Marcus by Goldman Sachs||Best for Low Fees||6.99%-28.99%||$3,500||$40,000||36-72 months||660+|
|Prosper||Best for Small Improvements||7.95%-35.99%||$2,000||$40,000||36 or 60 months||640+|
|Avant||Best for Bad Credit||9.95%-35.99%||$2,000||$35,000||24-60 months||600+|
LightStream: Best Overall, Best for Low Rates, and Best Flexible Repayment Options
If you’re hoping for an unsecured personal loan to help you complete your home renovations, LightStream may be a solid choice. You can borrow up to $100,000, with low rates that range from 3.99% to 16.99% APR when you sign up for automatic payments. Plus, if you’re approved by LightStream and a competing lender offers you a good rate, LightStream will aim to beat it by 0.10 percentage points. And on top of that, borrowers have the option to repay large home improvement loans ($25,000 to $100,000) for up to 12 years. This makes LightStream the best home improvement loan on our list.
Rate Beat Program
No fees or home equity requirements
No preapproval process
LightStream Personal Loan Details
|Fixed APR||3.99%-16.99% with autopay*|
|Loan Terms||24-144 months*|
|Time to Receive Funds||As soon as the same day|
|Recommended Credit Score||680+|
Read the full review: LightStream Personal Loans
SoFi: Runner-Up and Best for Large Improvements
SoFi also offers up to $100,000 in an unsecured personal loan, which can be used to make home improvements. Fixed rates are available, starting from 5.99% to 25.05% APR with autopay. However, even though it’s possible to get a 7-year repayment term, there isn’t a special extension for home loans like with LightStream. Nevertheless, there are perks that come with being a SoFi member. For example, SoFi’s unemployment protection can help you if you find yourself without a salary. If you lose your job (and it’s not your fault), you can delay your monthly payments in three-month increments, up to 12 months.
Extra membership perks
Fixed and variable rates
Good or better credit recommended
SoFi Personal Loan Details
|Fixed APR||5.99%-25.05% with autopay|
|Loan Terms||24-84 months|
|Fees||No late fees or origination fees|
|Time to Receive Funds||Typically within a week|
|Recommended Credit Score||680+|
Read the full review: SoFi Personal Loans
Marcus by Goldman Sachs: Best for Low Fees
If you’re comparing the best home improvement loans and looking for a lender that charges no fees, Marcus by Goldman Sachs is your best bet. In addition to no origination fees, borrowers also don’t have to worry about paying late fees if they accidentally miss a payment date or prepayment fees if they pay off their loan early (though interest still accrues on the balance). Marcus has a minimum loan requirement of $3,500, but a lower maximum than SoFi and LightStream—just $40,000. Rates start a little higher than others on our list, ranging from 6.99% to 28.99% APR. Repayment terms range from three to six years.
No fees, including late fees
Ability to borrow a smaller amount
Easy to use website
Good or better credit recommended
Joint applications not accepted
Marcus by Goldman Sachs Personal Loan Details
|Loan Terms||36-72 months|
|Fees||No late fees or origination fees|
|Time to Receive Funds||As little as 1 to 4 business days|
|Recommended Credit Score||660+|
Read the full review: Marcus Personal Loans
Prosper: Best for Small Improvements
If you’re making small home improvements and only need to borrow a couple thousand, Prosper may be a good option. It’s one of the best home improvement loans because the minimum to borrow is just $2,000 and the repayment terms are fixed at three or five years. Rates range from 7.95% to 35.99% APR. Prosper also charges origination fees between 2.40% and 5% of the loan amount, which will be deducted from what you borrow, so be sure to apply for enough to cover your project. You may have to wait for your loan to be funded, too, as the average time to receive funds is about five days.
Loan amounts from $2,000 to $40,000
Allows joint applications for co-borrowers
A variety of potential fees
May have to wait for funds
Prosper Personal Loan Details
|Loan Terms||36 or 60 months|
|Fees||Late fee of $15 or 5%, origination fee between 2.40%-5%|
|Time to Receive Funds||As little as 1 to 5 business days|
|Recommended Credit Score||640+|
Read the full review: Prosper Personal Loans
Avant: Best for Bad Credit
What if your credit isn’t good enough to qualify for one of the other best home improvement loans? In that case, you might be able to turn to Avant. While its average customer has a credit score between 600 and 700, Avant works to offer loans to a wide variety of borrowers, which may help if you have poor credit. However, with interest rates that range from 9.95% to 35.99% APR, and an administration fee of up to 4.75%, you might end up paying the price for getting a personal loan with poor credit. Loan amounts range from $2,000 to $35,000, with repayment terms of two to five years.
Options for less than fair credit
Low starting loan amount
Most borrowers receive funds by the next business day
High starting APR
Fixed administration fee
Avant Personal Loan Details
|Loan Terms||24-60 months|
|Fees||Late fee of $25, administrative fee up to 4.75%|
|Time to Receive Funds||At least 1 business day|
|Recommended Credit Score||600+|
Read the full review: Avant Personal Loans
How Does a Home Improvement Loan Work?
With a personal loan for home improvements, you’re borrowing unsecured money to pay for upgrades to your house, and you don’t usually have to use your home as collateral. There are some situations where you might have to secure a personal loan with your home, but, for the most part, you can use the money to make renovations without putting your house at risk.
And because it’s a personal loan, it’s possible to use the money for just about anything you want. So, if you still have money left after you complete your home renovation projects, you can use it for other costs, such as consolidating debt or buying new furniture. However, it might make the most sense to put the leftover money toward paying down your loan faster.
When Does Using a Personal Loan for Home Improvements Make Sense?
If you have a small amount of equity in your home and you don’t want to put your home at risk, a personal loan might be your best bet—even though you might have to pay a little more in interest. Plus, a personal loan can be used for just about anything. So if you’re looking to renovate your kitchen and purchase all new furniture for your patio, you can do both with your personal loan.
As of May 1, the average interest rates advertised by the 26 lenders we track is 16.83%.
Many of the alternatives to an unsecured personal loan require you to have equity in your home. Additionally, you secure these loans with your home, so if the unexpected happens and you aren’t able to make payments, you could lose your house. These other loans include home equity lines of credit (HELOCs), home equity loans, and cash-out refinancing options, and can be used for home improvements.
Another option may be credit cards with promotional financing. If you’re able to sign up for a credit card with a flexible credit limit and a low introductory APR, you may be able to pay for your home improvements while saving on fees and interest. For example, a credit card may have a promotional offer with 0% APR for the first 15 months, plus no annual fee. That means you can put renovation costs on the card and pay them off over those 15 months without accruing interest charges. Just keep in mind that you may not have a high enough credit limit to pay for many renovations, and after the promotional period expires, you’ll start racking up interest. Average credit card interest rates generally top 20.00%.
A personal loan will almost always come with an APR, and some have origination fees—those can eat into your loan amount and add to the interest that you pay over time.
Pros & Cons of Home Improvement Loans
Low- and no-fee loans available
Equity isn’t required
Options for those with fair or poor credit
Might pay higher APRs
Limits to the amount you can borrow
Can’t borrow repeatedly against your equity like you would with a HELOC
How Should I Choose a Personal Loan for Home Improvements?
When comparing the best home improvement loans, consider your needs and financial situation. Look at how much you’ll pay overall for the loan, including interest rates and fees. In many cases, it’ll make the most sense to go with the lowest-cost loan.
However, you also need to pay attention to your practical needs. If you need more than $35,000 or $40,000 for your home improvements, you might want to look at lenders like LightStream or SoFi. On the other hand, if you have small improvements, lenders with low minimums of $2,000 or $3,500, like Marcus or Avant, might work better.
You’ll have to find a lender that will approve you based on your credit score. If you have poor credit, you might need to choose a lender with a higher APR because it may give you a loan when other lenders won’t. But, while securing a new loan may ding your credit, paying it back on time and in full can help you build a better credit history and score.
How We Chose the Best Home Improvement Loans
Our writers spent hours researching loan options from over 50 lenders, looking at loan amounts, interest rates, fees, repayment terms, and more to determine which loans are likely to meet various needs. Loan recommendations take into account the needs and situations of various borrowers. One home improvement loan may not be right for every borrower, so consider all of your options before applying and securing your next personal loan.
Compare Personal Loan Rates With Our Partners at Fiona.com
*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.
Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of 3 years would result in 36 monthly payments of $303.99.
Truist Bank is an Equal Housing Lender.
LightStream. "Kitchen Remodel Financing." Accessed Dec. 28, 2020.
SoFi. "Personal Loans." Accessed Dec. 28, 2020.
SoFi. "Disclosures & Disclaimers." Accessed Dec. 28, 2020.
Marcus by Goldman Sachs. "Personal Loans." Accessed Dec. 28, 2020.
Prosper. "Help Center: What Types of Fees Are Charged on Loans?" Accessed Dec. 28, 2020.
Prosper. "Prosper Personal Loans." Accessed Dec. 28, 2020.
Avant. "What Is the Typical Credit Score of an Avant Customer?" Dec. 28, 2020.
Avant. "Apply for a Loan Online, Check Your Loan Options." Accessed Dec. 28, 2020.