Some of the best home improvement loans of 2021


Our goal here at Credible Operations, Inc., NMLS Number 1681276, hereinafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote products from our partner lenders who reward us for our services, all opinions are our own.

Man doing home renovations together with his little yellow dog (iStock)

Your home is one of the biggest purchases you will ever make and where you will spend most of your time outside of work. At some point you may reach a point where you want or even need to start improving your property, either to enhance its function for your family or to create the home of your dreams.

But dreams don’t come cheap when you want to remodel your home with a home improvement or two. In fact, even a small kitchen remodel costs more than $ 26,000 on average, and putting in a new deck alone can easily cost over $ 16,500. So how do you pay the bill for these improvements?

Fortunately, there are a couple of great ways to finance a home improvement when you don’t have cash on hand. Even better, some of them don’t require you to tap into your home equity.

What is a home improvement loan?

A home improvement loan – which is essentially a private loan that you take out to fund your home improvement project – may provide the funding needed for a repair or a project that adds value to a home.

Unlike many other types of loans (which we will discuss later), a home improvement personal loan is typically unsecured and generally not tied to your home’s equity. This means that you don’t have to use your property as collateral for the loan.

How do construction loans work?

A home improvement loan works like most other personal loans. Whether or not you are approved – and the loan limit, interest rates, and terms you receive – generally depend on yours. away Credit health.

To get a home improvement loan, you need to apply through the lender of your choice. In some cases, you might want to Check rates from multiple lenders at once. Credible can help you compare home loan interest rates.

Your application will ask for some personal and financial information that your prospective new lender will use to verify your creditworthiness and make a credit decision. If you are approved, you will be offered certain loan repayment terms. The loan term, monthly payments, and interest rates can vary widely based on your loan history, the loan amount requested, and even factors such as your current income.

The best home loans

Here are eight lenders to consider when looking for the best home improvement loans this year. Credible rated personal lenders by looking at eight different data points, including the lender’s minimum fixed rate, available maturities, fees, discounts, customer experience, time to funding, maximum loan amounts, and other factors.

The following four lenders are credible credit partners.


Credit terms: One to five years

Loan Amounts: Up to $ 35,000

Issuing fee: 0% to 2%

Other fees: $ 15 late payment fee

Financing time: Next working day

Best for: Fast financing and affordable prices for applicants with excellent credit ratings

Best egg

Credit terms: Three to five years

Loan Amounts: Up to $ 35,000

Issuing fee: 0.99% to 5.99%

Other fees: $ 15 late payment fee, $ 7 check processing fee, $ 15 unsuccessful payment fee

Financing time: One to three working days after the review

Best for: Competitive prices and higher loan amounts


Credit terms: Three to seven years

Loan Amounts: Up to $ 35,000

Issuing fee: None

Other fees: $ 39 late payment fee

Financing time: The next working day

Best for: Long credit periods and no commitment fees


Credit terms: One to five years

Loan Amounts: Up to $ 35,000

Issuing fee: None

Other fees: $ 29 late payment fee

Financing time: Usually two working days after verification

Best for: Smaller loans for borrowers in all 50 states

The following lenders do not partner with Credible.

PNC bank

Credit terms: Six months to five years

Loan Amounts: Up to $ 35,000

Issuing fee: None

Other fees: The late payment fee is $ 40 or 10% of the amount owed, whichever is greater

Financing time: One to three working days after verification

Best for: Common borrowers

US bank

Credit terms: One to five years

Loan Amounts: Up to $ 50,000

Issuing fee: None

Other fees: None

Financing time: One working day

Best for: Current US bank customers looking for higher credit limits

SunTrust Bank

Credit terms: Two to 12 years

Loan Amounts: Up to $ 100,000

Issuing fee: None

Other fees: None

Financing time: In some cases, the same day

Best for: Immediate funding, large loans, and long payback periods

TD Bank

Credit terms: Three to five years

Loan Amounts: Up to $ 50,000

Issuing fee: None

Other fees: Interest on late payment of $ 10 or 5% of the minimum payment amount due, whichever is lower

Financing time: Next working day

Best for: Competitive prices and no fees


Credible evaluates credit and lender data in seven categories. The data points considered include interest rates, fees, repayment terms, discounts, eligibility requirements, minimum deposit, and customer service.

Because lenders have their own borrower rating systems, your individual circumstances and your most important credit characteristics will determine which loan or lender is best for you and what interest rate and terms you may qualify for.

The advantages and disadvantages of construction loans

As with any other financial product, taking out an unsecured home finance loan for your next project has both advantages and disadvantages.


  • You will not put your home at risk. Since you typically don’t need to put collateral on a home loan (like your property’s equity), a home loan can be a safer loan option than that Home loan.
  • They can help you add value to your home. You can use home renovation loans for a variety of projects and improvements, from home repairs and remodeling to installing a new pool. These improvements and repairs, when completed, can add value to your home or increase its resale value.
  • They can mean quick financing in one lump sum. Construction loans are installment loans, which means that after approval you will receive a one-time lump sum payment for the entire loan amount. In some cases, you can get funding the same day.


  • They can cost more. Since construction loans are generally unsecured, you may find that they have higher interest rates than secured financing options.
  • There is no tax break. Some home improvement secured funds (like a HELOC) may allow you to claim a tax deduction on the interest paid. But unsecured loans have no such benefit.
  • It can be difficult to borrow enough money. Many unsecured home loans have a limit of $ 35,000 to $ 50,000, assuming your credit score is high enough to qualify for that much. If you have a low credit score or need more cash on a larger project, this type of loan may not be for you.

What alternatives to building loans are there?

If a home improvement loan is not right for you or does not provide enough financing, there are some other alternatives that you should consider.

  • Home loan: A home loan can offer lower interest rates and higher credit limits because your property is used to secure the debt.
  • Home Equity Line: Home equity lines of credit, or HELOCs, provide a revolving line of credit that you can use at any time, often at competitive rates.
  • Cash-out refinancing: Although the process is a little more complicated, Cash-out refinancing allows you to draw on your property’s existing equity to fund anything from home improvements to paying off debts or buying a second property.
  • Renovation mortgage: A Renovation mortgage can be an easy loan option if you are looking to buy a property that is already in need of improvement or repair.

Home improvement projects can be expensive at times, but they can add to both your enjoyment of the property and its overall value. However, it is not always possible to pay for these improvements out of pocket. So take your needs and personal situation into account when looking for the right home loan product.

Credible makes it easy to compare personal loan and mortgage rates from multiple lenders.


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