Best Home Improvement Loans in September 2025

Average home improvement loan rates

Interest rates on personal loans for home improvement can vary widely, typically between 6.49% APR and 35.99% APR, depending on individual financial factors, market conditions, the specific lender, the loan amount, and the loan's repayment term.

The chart below shows the average APRs on personal loans for home improvement, by credit score, according to Credible data on closed loans from September 2024 through August 2025:

• Excellent credit (800-850 FICO): 10.34%
• Very good credit (740-799 FICO): 13.09%
• Good credit (670-739 FICO): 21.56%
• Fair credit (580-669 FICO): 29.72%
• Bad credit (below 580 FICO): 31.39%

Home improvement is one of most common uses for personal loans on the Credible marketplace, after debt consolidation and credit card refinancing. In August 2025:

• More than 9% of Credible personal loan borrowers used their loan for home improvement.
• More than $8.8 million in home improvement loans were disbursed.
• The average home improvement loan was $21,409.

What is a home improvement loan?

There are several options for financing home improvements. Home equity loans and home equity lines of credit (HELOCs), personal loans, cash-out refinancing, credit cards, and government-backed loans are the most common. The lenders below offer personal loans for home improvement. These options are best if you don’t have home equity, don’t want to use it as collateral, or need an easy application process and quick funding. 

Best home improvement loan lenders of 2025

Types of home improvement loans

Below are some of the loan types you can use to finance a home renovation. Bear in mind that requirements vary by lender, and some loan types may not be available to new homeowners without sufficient equity.

Personal loans

Personal loans are typically unsecured installment loans. A lender loans you a lump sum that you repay, plus interest and fees, over a set period. The interest, repayment term, and loan amount depend primarily on your credit profile and income.

• APRs: Personal loan borrowing costs are measured in terms of annual percentage rates (APRs), which account for both the interest rate and any upfront lender fees, such as origination fees. APRs generally range from 6.49% to 35.99%. 
• Loan amounts and repayment terms: Loan amounts typically range from $1,000 to $50,000, with a few lenders offering loans of $100,000 or more. Repayment terms range from two to seven years in most cases, although some lenders offer longer terms specifically for home improvement loans.
• Fees: Many lenders charge origination fees to cover the cost of underwriting personal loans and to offset their risk. Origination fees are typically deducted upfront from the loan amount. Other common fees include late fees and nonsufficient funds fees (NSF).
• Collateral: Unlike home equity loans and HELOCs, unsecured personal loans don’t require collateral — meaning you don't risk losing your house to foreclosure if you default on a personal loan.
• Funding and approval: With online personal loans, application and approval can take only minutes. Some lenders offer funding for personal loans as soon as the same day. By contrast, HELOCs and home equity loans can take weeks to process.

Home equity loans

Home equity loans, also called second mortgages, are secured installment loans backed by the equity you have in a home. Like personal loans, you receive a lump sum amount. But lenders require an appraisal of your home to assess its current fair market value and then determine the amount you can borrow based on their loan-to-value (LTV) guidelines.

• Loan amounts and repayment terms: Loan amounts depend on how much equity you have, your interest rate, the monthly payment you can afford, and the lender  — you can often borrow up to 85% of your home’s equity. Loan terms generally range from five to 30 years. 
• APRs: Like a first mortgage, home equity loans have interest rates (often fixed) and closing costs. The APR you get will depend on your credit profile, but home equity loan rates may be below 8% if you have very good credit.
• Collateral: Since home equity loans are secured by your property, failure to repay the loan can result in foreclosure. 
• Funding and approval: The approval and funding process can take a month or more.

Home equity lines of credit

HELOCs, like home equity loans, are backed by the equity you have in your home. 

• Loan amounts and repayment terms: You can often borrow up to 85% of your home’s equity. However, instead of a lump-sum loan that’s repaid over a set term, HELOCs give you access to a credit line that you can use as needed for a set term — typically 10 years.
• APRs: APRs may be slightly higher than home equity loan APRs, and rates are typically variable. 
• Collateral: Since HELOCs are secured by your property, failure to repay the loan can result in foreclosure.
• Funding and approval: The approval and funding process could take several weeks.

During the draw period, you can withdraw funds up to your credit limit, and lenders may only charge you interest on the outstanding amount. Once the draw period ends, the repayment period begins, which generally lasts up to 20 years.

Some HELOCs don’t have closing costs, while others may charge an origination fee or other upfront fees. If your property value decreases during the draw period, the lender may not allow you to borrow more money.

Cash-out refinance loans

Cash-out refinance loans involve taking out a new, larger loan to replace your existing mortgage and cashing out the difference. 

• Loan amounts and repayment terms: You can often borrow up to 80% of your home’s value. A cash-out refinance has closing costs, a new interest rate, and a new term (typically 30 years). 
• APRs: Slightly higher than mortgage refinance rates (without cash-out).
• Collateral: Like other loans that require a home appraisal, your home is on the line if you miss payments.
• Funding and approval: Like other loans that require a home appraisal, a cash-out refi could take weeks or longer to close.

Since a cash-out refinance replaces your original mortgage and extends the repayment period, you could end up paying much more interest over the life of the loan.

The Consumer Financial Protection Bureau warns that a cash-out refinance may increase the risk of foreclosure. 

Credit cards

For smaller home improvement projects, a credit card can be an excellent tool.

• Loan amounts and repayment terms: Since credit cards are a revolving form of credit, like HELOCs, you don’t have a set repayment schedule and can borrow against your credit limit on an ongoing basis. Borrowing limits are often lower than other loan types, and not all contractors accept credit cards. 
• APRs: The average APR for a credit card is 21.16%, according to the Federal Reserve. But some credit card issuers offer an introductory 0% APR for up to 21 months. You can avoid paying interest during the introductory period, although the card's regular APR takes effect afterward.  
• Collateral: Most credit cards are unsecured.
• Funding and approval: Approval is typically quick and you could make purchases the same day you apply with a virtual credit card. However, you typically need good credit or better to qualify for a 0% APR offer.

Government-backed loans

The Federal Housing Administration (FHA) and the U.S. Department of Veterans Affairs (VA) may insure eligible home loans offered by private lenders, which can have easier qualification requirements and lower closing costs.

Other types of government-backed loans include Title 1 Property Improvement Loans insured by the U.S. Department of Housing and Urban Development. Eligible homeowners can use these loans to enhance the safety and livability of their homes with repairs or upgrades to HVAC systems, for example. Also, some states offer incentives for renewable energy and energy-efficient home projects.

How to compare home improvement loans

Most personal loans for home improvement are unsecured, unlike home equity loans, which come with a risk of foreclosure in the event of nonpayment. However, some personal loan lenders offer secured loan options that could have lower interest rates than unsecured loans. 

As you research lenders offering personal loans for home improvement, consider the following features:

• Repayment terms: Most lenders require you to repay a personal loan within 7 years, but some lenders offer longer repayment terms. For example, LightStream offers home improvement loans with repayment terms up to 20 years. 
• Loan amounts: Some personal loan lenders offer up to $100,000 for qualified borrowers to finance home improvements. If you’re seeking a home equity loan, the loan amount is dependent on the amount of equity you have. Keep in mind, the amount you qualify for also depends on your credit score, income, and other financial factors. 
• Interest rates: Annual percentage rates (APRs) for personal loans, which account for the interest rate and upfront lender fees, typically range from 6.49% to 35.99%. The lowest rates are reserved for excellent credit borrowers, while borrowers with fair or poor credit tend to pay higher rates.
• Fees: Many lenders charge an origination fee for personal loans, which is deducted upfront from the loan proceeds. Origination fees typically range from less than 1% to as much as 15% of the loan amount (the fee is likely to be on the high end of the range if you have bad credit). Other fees can include late fees and insufficient funds fees. Some lenders, like Citibank, Discover, and LightStream, don’t charge any fees.  
• Funding times: Personal loans offer a speedy application process, and most lenders can distribute the funds directly to your bank account within a few business days of approval. Some lenders even offer funding as soon as the same day. Home equity loans can take over one month to approve and fund due to the home appraisal and other closing requirements. 
• Lender reputation: Check customer reviews on third-party sites like Trustpilot to determine if borrowers are generally happy with their experiences, and make sure the lender you choose is licensed in your state. 
   

Related: How Do Personal Loans Work?

How to use a home improvement loan

You might use cash from a home improvement loan to pay contractors, buy paint, appliances, or fixtures, or purchase new furniture. The chart below shows some examples of common home improvement projects and their estimated average costs. Note that prices vary depending on where you live, the size of your home or scope of the project, the materials used, and other factors.

Note: When you apply for a personal loan for home improvement, you need to specify that as the purpose. Being specific can help you get enough money for your project, open up longer repayment terms, and potentially lower your rate. You’re obligated to use the loan for the purpose you stated to the lender when you applied.

Sources:

^[1]The Journal of Light Construction, “2024 Cost vs Value Report”

^[2]Angi, “How Much Does an Inground Pool Cost? [2025 Data]”

^[3]EnergySage, “Solar panel cost in 2025: It may be lower than you think”

^[4]Angi, “How Much Does Landscaping Cost? [2025 Data]”

^[5]Angi, “How Much Does HVAC Replacement Cost? [2025 Data]”

Pros and cons of home improvement loans

Pros

• Cash to complete home renovations and repairs
• Lower interest rates than credit cards, on average
• Same-day home improvement loans may be available
• Repayment terms can extend up to 20 years
• Unsecured personal loans are available — if you don't have home equity for a home equity loan or don't want to use it
• Responsible repayment can improve your credit
• Your home’s value may increase by making improvements
• Interest on some loan types may be tax-deductible

Cons

• Your home is at risk if you default on a home equity loan or HELOC
• A long repayment term creates a long-term financial burden
• Home equity loans and HELOCs can take a month or more to approve
• Late payments can hurt your credit
• Home improvements may not increase your home’s value

Related: Should I Get a Personal Loan?

Methodology

Credible's rating system incorporates 1,216 data points across 32 partner and non-partner lenders. We rate lenders based on these weighted categories:

• Rates and fees: 18.75%
• Eligibility and options for bad and no credit: 17.5%
• Availability: 12.5%
• Loan amounts and terms: 10%
• Customer satisfaction: 10%
• Customer service: 10%
• Efficiency and fund delivery: 10%
• Discounts: 7.5%
• Credible proprietary data: 3.75%

Credible's team of experts gathers information from lender websites and directly from our partners. We consider partner lenders' statistics over a 12-month period — including average rates, average funding times, and average credit scores for approved applicants. Each data point is verified by a senior editor to make sure it's accurate at the time of publication. 

Learn more about how Credible rates lenders by exploring our personal loans lender rating methodology.

Where we get our data

Credible is a personal loans marketplace that partners directly with lenders to offer loans for a wide range of credit profiles and loan purposes. Because of these relationships, we have access to the most current interest rates that real borrowers are being approved for, along with average rates by credit score and loan purpose, approval rates overall and by lender, and more. The data we use is primary source data, updated weekly, and does not include any personally identifiable information about borrowers.