USAA’s home improvement loans are general-purpose personal loans for $2,500 to $50,000 paid back over 12 to 84 months. The APRs range from 9.49% to 17.65%. The rate you get depends on your credit history, income and other factors. USAA doesn’t charge an origination fee. And they offer quick decisions, typically within 1 business day. They usually deliver funds 1 - 3 business days after that. USAA doesn’t publicly give a minimum credit score requirement for their personal loans.
Most banks and credit unions only offer general personal loans, as opposed to loans specifically for home improvement. So USAA is not unusual. You can use a personal loan for whatever you wish, including home improvements.
Some people also use home equity loans for home improvement, since home equity loans can be used for almost anything. However, that is not currently an option with USAA. Their website states that they are not taking new applications for home equity products at this time.
Home improvement loans give homeowners the funds needed to complete projects related to maintaining or increasing the value of a home and the surrounding property, such as remodeling a room, putting on a home addition, or replacing a roof. Although they have a unique purpose, loans for home improvement function just like most other loans. The borrower receives a lump sum of money and must pay it back, along with interest, over a certain number of months.… read full answer
Most lenders actually don’t differentiate home improvement loans from their other personal loans. Personal loans can typically be used for any purpose, including home improvement. Some lenders, such as LightStream, give specific interest rate ranges for home improvement loans versus other types of personal loans. But they are not common.
The interest rate on a home improvement loan depends on the borrower’s credit and income, among other factors. And the lender may charge additional fees, such as an origination fee for processing the loan.
How home improvement loans work:
Application process: Before applying for a personal loan for home improvement, it’s good to check for pre-qualification to see approval odds and estimated rates. Borrowers can do that with WalletHub’s free pre-qualification tool and then apply for the loan on the issuer’s website.
Approval: Lenders should usually come to a decision within 7 business days of receiving a personal loan application.
Loan funding: The lender gives a lump sum of money to the borrower, usually as a direct deposit to a bank account but sometimes as a check. It typically takes only a few business days after approval to receive the funds.
Home improvement: The borrower can used his or her personal loan to purchase the home improvement goods and services needed to complete the job.
Payoff: The borrower must make a set minimum payment each month until the loan is paid off. The total cost of the loan will include interest and any applicable fees.
It’s useful to note that while most “home improvement loans” are just personal loans used for the purpose of home improvement, there are other types of loans you can use for home improvement as well.
Another type of loan commonly used for home improvement is a home equity loan. Like a personal loan, a home equity loan can be used to pay for just about anything. The difference is that with a home equity loan, your home serves as collateral and could be foreclosed on by the lender if you default. But that risk comes hand in hand with the benefits of low APRs and the potential for large loan amounts.
There are also home equity lines of credit, which don’t give you a lump sum at the beginning but let you withdraw up to a certain amount whenever you want, like a credit card.
Finally, you might consider getting a government-backed loan for home improvement. The Federal Housing Administration offers “Title I” loans, which can be used for anything that makes your home “more livable and useful.” The loan is usually secured by your house if you borrow more than $7,500 and unsecured otherwise. The payoff period is 20 years for a single-family house, and you’ll need a debt-to-income ratio of 45% or lower to qualify. Other government-backed options for home projects include Energy Efficient Mortgages for improving the home’s energy use and Single Family Housing Direct Loans from the USDA for people in rural areas. The latter can be used to either purchase a home or renovate one.
An unsecured home improvement loan is a home improvement loan with no collateral involved. The borrower doesn’t have to put their property at risk in order to take out the loan. In contrast, a secured home improvement loan requires some collateral, such as an auto title, real estate, stocks or a certificate of deposit. The lender can take ownership of the collateral if the borrower is unable to pay back the loan.… read full answer
Because it carries more risk for the lender, an unsecured home improvement loan is harder to get than a secured one. While you should be able to get a secured loan with nearly any credit score, an unsecured home improvement loan will typically require a credit score of at least 660. Some lenders will consider applicants with lower credit scores, though.
Before you apply for an unsecured home improvement loan, you should pre-qualify to check your chances of approval and see an estimate of the rates you’d get if approved. WalletHub’s free pre-qualification tool can help you check your status with various lenders.
Once you apply for an unsecured home improvement loan and get approved, you can use the funds for any home improvement expense. That could include remodeling a basement or bathroom, putting on a roof, or building a deck, to name a few things.
Best Unsecured Home Improvement Loan Offer
The best unsecured home improvement loan comes from LightStream, where you can borrow $5,000 to $100,000 for 12 to 144 months. The interest rates are quite low, too, only ranging from 4.99% to 15.79%. There’s no origination fee, either.
Alternatives to an Unsecured Home Improvement Loan
Other ways to get money for home improvements include using a home equity loan or home equity line of credit (HELOC). However, these options are both secured – they use your house as collateral. So if you find yourself unable to make payments on a home equity loan or HELOC, the lender could eventually foreclose on your house.
If your expenses are on the smaller side, you might also consider charging them to a credit card with a 0% introductory APR. But these 0% APRs only last for 6 - 24 months, after which any remaining balance is subject to the card’s high regular APR.
There are plenty of home improvement loans with no equity needed. Only home equity loans and home equity lines of credit require the borrower to use the equity in their home. The best way to get a home improvement loan with no equity is by applying for an unsecured personal loan. Personal loans base eligibility on your credit and income, so you don’t need to own property worth a certain amount of money to take one out. And you can use personal loans for home improvements or pretty much anything else. That’s not your only option, though.… read full answer
How to Get Home Improvement Loans with No Equity:
Take out an unsecured personal loan. You’ll usually need a credit score of 660+ to get an unsecured personal loan, but some lenders accept applicants with scores as low as 585. These loans have absolutely no collateral.
Get a secured personal loan. If you’re willing to put up something other than your home as collateral (e.g. a car, stocks, or money in a bank account), you can take out a secured personal loan even with bad credit. These loans tend to have lower APRs than unsecured personal loans, but if you default the lender can keep your collateral.
Get a government-backed home improvement loan. The government offers a few loan options that don’t require any equity. The U.S. Department of Housing and Urban Development helps insure property improvement loans of $7,500 or less. These are called FHA Title 1 loans. If you’re a veteran, you can also look into a renovation loan through the Veterans Administration.
All in all, if you don’t have any home equity, there are still plenty of avenues for you to pursue. A personal loan is probably the most convenient.
However, there are both pros and cons to getting a home improvement loan with no equity. The biggest benefit is that you won’t risk losing your home because you won’t be able to secure a loan with it. You’ll also likely get quicker approval and funding timelines if you apply for a personal loan rather than a home equity loan.
Drawbacks to getting a home improvement loan with no equity include the fact that you may not be able to borrow as much as you could with a home equity loan. You’ll also likely have much higher APRs if you get your home improvement financing through a personal loan rather than a home equity loan.
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