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Best Renovation Loans for August 2022

Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

Nearly any personal loan can be used for home renovations. So, if you're looking to remodel your kitchen, upgrade baths, or build a patio, an unsecured personal loan from your bank, credit union, or an online lender will do the trick. We've combed through lenders to find those offering some of the best personal loans.

Ratings Methodology

As of Aug. 10, 2022

Lending Partner Min. Credit Score Loan Amounts APR Range Next Steps
LightStream
Rating image, 4.0 out of 5 stars.
Min. Credit Score: 660 Loan Amounts: $5,000 - $100,000 APR Range: 3.99% - 19.99% (w/ AutoPay*)
SoFi
Rating image, 5.0 out of 5 stars.
Min. Credit Score: 680 Loan Amounts: $5,000 - $100,000 APR Range: 7.99% - 22.73% (with all discounts)
Upstart
Rating image, 4.0 out of 5 stars.
Min. Credit Score: None Loan Amounts: $1,000 - $50,000 APR Range: 5.40% - 35.99%
Discover Personal Loan
Rating image, 5.0 out of 5 stars.
Min. Credit Score: 660 Loan Amounts: $2,500 - $35,000 APR Range: 5.99%-24.99%
Avant
Rating image, 4.5 out of 5 stars.
Min. Credit Score: 580 Loan Amounts: $2,000 - $35,000 APR Range: 9.95% - 35.95%
Upgrade
Rating image, 4.5 out of 5 stars.
Min. Credit Score: 620 Loan Amounts: $1,000 - $50,000 APR Range: 6.95% - 35.97%
Wells Fargo Personal Loan
Rating image, 4.0 out of 5 stars.
Min. Credit Score: 660 Loan Amounts: $3,000 - $100,000 APR Range: 5.74% - 20.99%
Disclaimers

*Upstart Loan Disclaimer

The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.

*SoFi Personal Loan Disclaimer

Fixed rates from 7.99% APR to 22.73% APR APR reflect the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi rate ranges are current as of 8/1/22 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account

Best for: Longer repayment terms

LightStream

Logo for LightStream
Rating image, 4.0 out of 5 stars.
4.0/5

Minimum Credit Score

660

Loan Amounts

$5,000 - $100,000

APR Range

3.99% - 19.99% (w/ AutoPay*)

Term Length

36 - 84 months
  • LightStream makes our best renovation loans list because of its high loan limit ($100,000), very low interest rates, and absence of fees. Lending requirements are strict, but qualified borrowers enjoy a very low cost loan. The repayment term on larger loans is up to 12 years.

    • One of the lowest APRs in the industry
    • Low-rate guarantee
    • Super fast funding
    • High maximum loan amounts
    • Strict qualification requirements

Best for: High loan limits

Logo for SoFi
Rating image, 5.0 out of 5 stars.
5.0/5

Minimum Credit Score

680

Loan Amounts

$5,000 - $100,000

APR Range

7.99% - 22.73% (with all discounts)

Term Length

24 - 84 months
  • We chose SoFi as a best renovation loans lender because of the high loan limit ($100,000). That amount will allow you to get significant work done on your home. SoFi offers low rates and does not charge loan fees. Members get perks like estate planning help.

    • Competitive interest rates
    • No fees
    • Paused payments for unemployment
    • High minimum loan amount

Best for: Flexible credit requirements

Logo for Upstart
Rating image, 4.0 out of 5 stars.
4.0/5

Minimum Credit Score

None

Loan Amounts

$1,000 - $50,000

APR Range

5.40% - 35.99%

Term Length

36 or 60 months
  • We selected Upstart as a best renovation loans lender because qualified applicants can get a competitive low interest rate here. Compared to credit cards or point-of-sale financing, some borrowers will save on interest by applying with Upstart.

    • Accepts borrowers with low credit scores
    • Wide range of loan amounts
    • No prepayment penalty
    • Payment grace period
    • High upper-range interest rate
    • High origination fees
    • No cosigner allowed

Best for: Debt consolidation

Discover Personal Loan

Logo for Discover Personal Loan
Rating image, 5.0 out of 5 stars.
5.0/5

Minimum Credit Score

660

Loan Amounts

$2,500 - $35,000

APR Range

5.99%-24.99%

Term Length

36 - 84 months
  • Discover makes our list of best renovation loan lenders because there is no origination fee (saving you up to 8% of your loan amount) and interest rates are lower than what many other lenders charge. You can borrow up to $35,000, which will cover many renovation projects. If you're approved for a debt consolidation loan, Discover will pay your creditors for you.

    • Competitive APRs
    • No origination or prepayment fees
    • Debt consolidation support
    • Long repayment term

    No cosigners accepted

Best for: Low credit scores

Logo for Avant
Rating image, 4.5 out of 5 stars.
4.5/5

Minimum Credit Score

580

Loan Amounts

$2,000 - $35,000

APR Range

9.95% - 35.95%

Term Length

24 - 60 months
  • We chose Avant as a best renovation loans lender because applicants with a score as low as 580 can borrow up to $35,000 for up to five years. Most loans fund within one day. If your project is small, you can borrow as little as $2,000.

    • Lower credit score requirements
    • Relatively low minimum loan amounts
    • Fast funding
    • No prepayment penalties
    • Higher APRs

Best for: Using collateral to lower interest rates

Logo for Upgrade
Rating image, 4.5 out of 5 stars.
4.5/5

Minimum Credit Score

620

Loan Amounts

$1,000 - $50,000

APR Range

6.95% - 35.97%

Term Length

24 - 84 months
  • We chose Upgrade for best renovation loans because you can borrow up to $50,000, which is enough for many renovation projects. Well qualified applicants can get a very low interest rate, including discounts for auto pay and for using their vehicle as collateral against the loan (if approved).

    • Low minimum loan amount
    • Get your funds within one business day
    • Auto secured loans available
    • Not available to residents of all states
    • APRs can be high
    • Origination fees

Best for: Signing with a co-applicant

Wells Fargo Personal Loan

Logo for Wells Fargo Personal Loan
Rating image, 4.0 out of 5 stars.
4.0/5

Minimum Credit Score

660

Loan Amounts

$3,000 - $100,000

APR Range

5.74% - 20.99%

Term Length

12 - 84 months
  • We chose Wells Fargo for renovation loans because rates are among the lowest you'll find (even for applicants with fair credit). Loans are available up to $100,000, which is enough to cover a wide range of renovation projects. Wells Fargo customers might qualify for a lower rate or higher limit. Co-applicants (which are different from cosigners) are also allowed, assuming your co-applicant has stronger credit.

    • High lending limits
    • Secured loans available
    • Consolidation funds paid directly to creditors
    • Best rates reserved for Wells Fargo banking customers
    • Non-customers must apply in person

What is a renovation or home improvement loan?

A home renovation loan or home improvement loan is a type of personal loan. Since most of the best personal loan lenders don't ask why you want to borrow money, you can use the funds on anything that strikes your fancy -- including as an unsecured home improvement loan. If your kitchen is so outdated June Cleaver would be right at home, you may be ready to modernize with the latest kitchen appliances and designs. And if your sump pump has stopped working and you have a flooded basement, you may need to make a home improvement. A home improvement loan is not your only option, but it may be one of the best.

Most of these loans are distributed in a lump sum you repay on a monthly basis. If your credit score is high enough, lenders offer you their best interest rates and repayment terms. If not, you may still qualify for a loan, but can expect to pay more in interest.

If you would prefer to tap into your home's equity, it's worth looking into a home equity loan or a line of credit (HELOC). A cash-out refinance is another way to finance home improvements. Mortgage terms vary, so check with your lender if you're considering one of these options.

READ MORE: How Much Personal Loan Can I Get?

What can I use a renovation loan for?

Many people finance home improvements with renovation loans. Here are some commonly-financed projects:

You can also use a loan to finance emergency home repairs.

What should I look for in a renovation loan?

The perfect loans for renovations offer a combination of low interest rates, comfortable repayment terms, and the right amount of money. The best way to get to the ideal loan is to ask yourself a few questions.

Do I want a secured or unsecured loan? With an unsecured loan, your signature serves as your promise of repayment. With a secured personal loan, you agree to put something of value up as collateral. This could be your home, vehicle, jewelry, property, or retirement plan. Secured loans feature lower interest rates. That's because lenders know that their interests are protected if you default on payments. In your loan shopping, choose the type of loan that best serves your needs.

Is my credit score high enough to land a low interest rate? Interest rates vary widely depending on your credit history. A higher score reassures lenders that you have a strong history of repaying debt on time. Lenders also want to know you earn enough money to cover the monthly payments. If your score is low and the renovations are not urgent, it may be best to pause the renovation process. First, improve your credit score enough to qualify for the best interest rates and terms. Your wallet will thank you.

Am I ready to take on the debt? None of us knows what the future holds. Even if you score a lower interest rate, ask yourself if you have an emergency fund in place with enough money in it to cover three to six months' worth of bills if anything goes wrong. Also review your monthly budget and make sure you can cover the monthly payment easily. No home renovation loan is worth sleepless nights.

Alternatives to home improvement loans

A personal loan is not your only path to home renovation. Here are some alternatives:

Cash: Cash is the best way to finance improvement projects, provided you have extra funds. Spending cash from your savings account means you know precisely how much you can afford to spend. Most importantly, it means you don't have any new debt.

Pay as you go: If you cannot afford to pay for an entire home renovation project at once, pay as you go. Let's say you abhor your current bathroom and want a total remodel. Perhaps you retile the floors when the funds are available. Months later, you paint the cabinets and replace the hardware. Doing a little at a time allows you to avoid more debt. In addition, taking your time gives you space to think about your renovations in detail.

Credit card: Using a credit card for a small renovation or home repair makes sense only if you qualify for a credit card with a 0% promotional APR. It's essential to remember how long the promotion lasts (typically 12 to 18 months). The moment the promotion expires, the interest rate on the card will revert to its regular rate.

Home equity loan: This type of loan uses the collateral in your home to finance your loan. A home equity loan typically offers a lower interest rate. That's because lenders know that if you fail to make payments they can repossess your home, sell it, and recoup their losses.

Home equity line of credit (HELOC): Another type of secured loan is a HELOC. What sets a HELOC apart from a home equity loan is that a HELOC allows a borrower to open a revolving line of credit and tap into home equity as needed. Once you receive loan approval, you're offered a borrowing limit. Say you borrow $40,000. Once that money is repaid, you can borrow that amount again until the loan term ends. One thing to keep in mind is that your payment can change, based on how much you borrow at any given time.

Cash-out refinance: If you want to make home renovations while taking advantage of current low mortgage refinance interest rates, a cash-out refinance is a viable option. Imagine that your home is worth $300,000, but you only owe $150,000. That means you have $150,000 in home equity. Say your home needs $50,000 in renovations. You refinance the mortgage at today's low rate and pull out $50,000 to complete the projects around your house. Keep in mind that you now have $50,000 less in home equity, but you didn't go deep in debt to improve your home.

HomeStyle® Renovation loan: A HomeStyle® loan is backed by the federal government through the Fannie Mae program. It's available to new buyers and to homeowners who would like to refinance a mortgage and add enough to the principal to make home renovations.

VA loan: Similar to the home improvement mortgage loans mentioned, the Veteran's Administration now backs the VA renovation loan, incorporating the cost of home improvements into the primary loan. This VA loan covers both the cost of financing (or refinancing) a home and upgrades.

FHA 203k loan: Roughly speaking, the 203k loan is the FHA's version of the HomeStyle® Renovation loan or VA loan with home renovation capabilities. With as little as 3.5% down, an FHA borrower can take out enough money to purchase a home and make renovations using one simple mortgage.

Whether your interest in renovation financing has to do with creating your dream home or simply making sure your house functions as it should, you are wise to investigate your options. Take a look at the full costs of several types of renovation loans. In addition to the annual percentage rate you're charged, don't forget to factor in costs like the origination fee (if there is one) and closing costs. Finally, be sure you can easily afford the repayment term included in your loan offer.

Lending Partner Min. Credit Score Loan Amounts APR Range Best For
LightStream 660 $5,000 - $100,000 3.99% - 19.99% (w/ AutoPay*) Borrowers with good credit
SoFi 680 $5,000 - $100,000 7.99% - 22.73% (with all discounts) Low APR for borrowers with high income
Upstart None $1,000 - $50,000 5.40% - 35.99% Reducing high interest debt
Discover Personal Loan 660 $2,500 - $35,000 5.99%-24.99% Debt consolidation
Avant 580 $2,000 - $35,000 9.95% - 35.95% Borrowers with poor credit scores
Upgrade 620 $1,000 - $50,000 6.95% - 35.97% Debt consolidation and fair credit
Wells Fargo Personal Loan 660 $3,000 - $100,000 5.74% - 20.99% Low APR and fast funding

FAQs

  • Typically, there is nothing that sets an unsecured renovation loan apart from any other type of unsecured personal loan. That means that the lender has little interest in how the funds are used or what kind of renovations they cover. The thing the lender cares about is whether the loan is repaid as promised.

  • How much you can borrow for home renovations is primarily based upon two factors: Your credit score and debt-to-income ratio.

  • It depends on the lender. Some lenders can fund your loan within a day while others take up to two weeks. If loan funding time is important to you, it's a good idea to ask this question of lenders before applying for a loan.

  • It is possible to qualify for a personal loan with a credit score as low as 580. The caveat is this: The lower your credit score, the higher the interest rate you can expect to pay. If your credit score impedes your ability to land a low interest rate, you may want to consider working to boost your score before taking out a loan.

  • While there are exceptions to the rule, personal loans terms typically run from one to 10 years. It is common to find loan terms ranging from three to five years.

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