Grace Enfield, Content Writer
@grace_enfield
The main types of home improvement loans are personal loans and home equity loans. Both personal loans and home equity loans can be used for anything, including home improvements, and the biggest difference is that home equity loans are secured by your house, while personal loans are usually unsecured. Other ways to fund home improvements include home equity lines of credit and credit cards.
Types of Home Improvement Loans
Personal loans
Personal loans are a type of installment loan that can be used for multiple purposes, including home improvement expenses. You can typically get between $1,000 and $100,000 in funding with a payoff period of 12 to 84+ months. The APRs range from 4% to 36%, usually, and some loans charge an origination fee of 1% to 8% of the loan amount.
Credit score requirements for personal loans are usually between 585 and 700 among popular lenders. However, there are options for people with lower credit scores. You can typically avoid origination fees if you have a credit score of 660 or higher.
Home equity loans
You can borrow a portion of your equity in your home - the home's value minus your mortgage balance - with a home equity loan. These loans use your house as collateral, however, so if you don't pay off the loan, you risk foreclosure.
Home equity loans typically last for 5 to 30 years and have APRs of around 3% to 7%. Home equity loans can also be used for almost anything, including home improvements, and they require a credit score of at least 680 for approval.
Other Ways to Fund Home Improvement Projects
Home equity lines of credit
Home equity lines of credit allow you to borrow up to a certain amount whenever needed, like a credit card, rather than getting a lump sum from a home equity loan. Home equity lines of credit can be used for almost any purpose, including home improvement projects. They typically require a credit score of 680 or higher for approval.
Credit cards
Depending on how expensive your project is, you may be able to charge it (or at least some of it) to a credit card. If you can, you should take advantage of a card with a 0% introductory APR on purchases. You'll likely need a credit score of 700+ to get a card with a good 0% introductory APR.
Choosing which type of home improvement loan to get is up to you based on what you're qualified for, what you need the loan for and your financial standing. If you're ready to compare options, you can visit WalletHub's best home improvement loans page.
People also ask
How do you get a home improvement loan?
To get a home improvement loan, you need to first pick a loan type that meets your needs and compare offers from multiple lenders. The next step is to choose a loan offer based on factors like the APR range, loan amount and approval requirements, then submit an application. If you meet all of your chosen lender's requirements, you have a good chance of getting approved.
Steps to Get a Home Improvement Loan
- ...
Are renovation loans worth it?
A renovation loan can be worth it if it will help you improve the value and livability of your home without costing too much. If you want a loan with quick funding that doesn’t require you to use your home as collateral, getting a personal loan for renovations could be a good decision.
How worthwhile a renovation loan proves to be depends in part on which type of renovation loan you choose because interest...
read full answer by Gino Rodriguez, WriterCan you get a personal loan to remodel a house?
Yes, you can get a personal loan to remodel a house, as a personal loan can be used for just about anything. Most “home improvement” loans are actually just unsecured personal loans that you can use to finance your home projects. Below are a few of the pros and cons of getting a personal loan to remodel a house.
Good Personal Loans to Remodel a House
| Lender | APR ... | Loan Amount | Score Required |
Did we answer your question?
Important Disclosures
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers. For full transparency, here is a list of our current advertisers.
Advertising impacts how and where offers appear on this site (including, for example, the order in which they appear and their prevalence). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.
Advertising enables WalletHub to provide you proprietary tools, services, and content at no charge. Advertising does not impact WalletHub's editorial content including our best picks, reviews, ratings and opinions. Those are completely independent and not provided, commissioned, or endorsed by any company, as our editors follow a strict editorial policy.