Best Home Improvement Loans in April 2026

What is a home improvement loan? 

A home improvement loan is a way to finance renovations, repairs, upgrades, and other projects if you don't have the cash available to pay the entire cost up front. You can use a home improvement loan to make your home safer, more comfortable, or more livable, or to increase its resale value.

Common types of home improvement loans include:

• Installment loans, such as personal loans, home equity loans, and contractor financing
• Revolving credit, such as home equity lines of credit (HELOCs) and credit cards
• Mortgage refinancing (cash-out refinance)
• Government-backed loans

What to watch out for

Some experts recommend following the “30% rule” of home improvement, which says that renovation projects shouldn't cost more than 30% of your home's market value. This guideline can help you avoid taking on home improvements that you can't realistically afford or have a low return on investment (ROI).

Best personal loans for home improvement

Home improvement is one of the most common uses for personal loans on the Credible marketplace. According to personal loans data for March:

• More than 8% of personal loans were used for home improvement.
• More than $10.5 million in home improvement loans were disbursed.
• The average home improvement loan was $21,040.

Personal loans are often a good choice for financing home improvements if you don’t have home equity or if you do have equity but don’t want to use it. They also have an easier application process than equity-based financing, with a faster funding timeline and no inspections or closing costs. 

Tip: Check your homeowners association agreement before considering a home improvement project. Your HOA may have policies aimed at maintaining certain architectural or aesthetic standards, and you might need to have your project approved.

Personal loans

• Best for: Borrowers with low or no home equity

Personal loans are typically unsecured installment loans that provide you a lump sum repaid, plus interest and fees, over several years. The interest, repayment term, and loan amount depend primarily on your credit profile and income. Many lenders charge origination fees to cover the cost of underwriting and to offset their risk. Origination fees are typically deducted upfront from the loan amount. 

Home equity loans

• Best for: Borrowers with more than 20% equity

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. Since home equity loans are secured by your property, rates are often lower than personal loans. However, you risk foreclosure if you default.

Home equity lines of credit (HELOC)

• Best for: Borrowers with 15% - 20% equity

HELOCs, like home equity loans, are backed by the equity you have in your home, but instead of a lump sum, HELOCs give you access to a credit line you can use as needed during what’s called a “draw period.” 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 and you can no longer use the account. 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. 

Credit cards

• Best for: Borrowers with a high credit limit or eligibility for 0% APR offers

A credit card can be an excellent tool for smaller home improvement projects, especially if you qualify for a 0% introductory APR offer. Since standard credit card APRs are typically high, carrying a balance past the promotional period can be expensive. 

Cash-out refinance loans

• Best for: Borrowers with at least 20% equity and a high mortgage rate

Cash-out refinance loans involve taking out a new, larger loan to replace your existing mortgage and cashing out the difference. The Consumer Financial Protection Bureau warns that a cash-out refinance may increase the risk of foreclosure. Since a cash-out refinance replaces your original mortgage and often extends the repayment period, you could end up paying much more interest over the life of the loan.

Government-backed loans

• Best for: Projects to improve basic livability

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.

Contractor financing

• Best for: Borrowers seeking convenience who may not qualify elsewhere

Some contractors offer financing through third-party lenders as a "one-stop shopping" experience, and it may be easier to qualify for those with fair or bad credit. If you choose a deferred interest plan, make sure you repay the loan in full before the promotional period ends to avoid being charged interest retroactively. Money from the loan could bypass you entirely, going straight to your contractor. If you’re unhappy with their work, your options to get out of the project and the loan could be limited.

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:

• How much time do I have to repay the loan? 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.
• How much can I borrow?  Some personal loan lenders offer up to $100,000 for qualified borrowers to finance home improvements, and BHG Financial's maximum loan amount is even higher at $250,000. 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. 
• What will I pay in interest? Annual percentage rates (APRs) for personal loans, which account for the interest rate and upfront lender fees, typically range from 6.25% to 35.99%. The lowest rates are reserved for excellent credit borrowers, while borrowers with fair or poor credit tend to pay higher rates.
• Will I have to pay any 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.
• How quickly can I get the money? 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. 
• How does the lender treat its customers? 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 can you 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 list below shows some common uses.

• Swimming pool installation
• Roofing replacement
• Solar panel installation
• Kitchen remodel
• Bathroom remodel
• Deck addition
• HVAC replacement
• Professional landscaping

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 state to the lender when you apply.

Pros and cons of home improvement loans

Details on the pros

• Provide long-term financing and flexibility: Paying cash up front for an expensive project can be difficult. A loan offers a way to finance the improvements and repay what you've borrowed over a period of months or years.
• Unsecured loans available in days: Using an unsecured personal loan or a credit card doesn't require time-consuming inspections, appraisals, or closings (although home equity loans and HELOCs typically do).
• Some loans don't require home equity: You can qualify for a personal loan without having to meet any equity requirements, which benefits new homeowners.
• Your home’s value may increase: A loan can help you make improvements that might boost your home's resale value, from "curb appeal" projects like landscaping to HVAC replacements and other major renovations.
• Home equity loan or HELOC interest may be tax-deductible: For tax years 2025 and 2026, you may be able to deduct interest paid on home equity loans or HELOCs used to pay for home improvements.  
• A long repayment term = low monthly payments: An affordable monthly payment on a long-term loan can leave more room in your budget for cost overruns. Some home improvement loans have repayment terms lasting up to 15, 20, or 30 years.

Details on the cons

• Your home is at risk (home equity loans/HELOCs): These loans use your home as collateral, so failure to repay could lead to foreclosure.
• Long repayment term = long-term commitment: Unless you plan to remain in your house for the next several years, you could end up finishing repayment after you've moved. 
• Approval time (home equity loans/HELOCs): Between appraisals, inspections, and closing, you might have to wait several weeks to receive funding. 
• Some projects have a low ROI: In terms of boosting resale value, not all projects offer the same bang for the buck. For example, a cost-value analysis found that upscale bathroom additions and major kitchen remodels recouped 36% of their cost at resale. 
• Missed/late payments could damage credit: As with most other loans, your payment activity on a home improvement loan is typically reported to credit bureaus. Falling behind or defaulting on any loan can do harm to your credit score that could take a long time to recover from.
• Not borrowing enough: It can be hard to know exactly how much your project will cost until it’s finished, especially for larger renovations that involve demo work. While it’s generally not advisable to borrow more than you need, you may want to give yourself wiggle room by borrowing an extra 10% to 20% over your contractor’s quote or expected costs. 

Risks of home improvements 

Other potential downsides of home improvement require more context. One of them is that your project could cost more than you expected. 

• It's rare for a home improvement project to finish under budget. A 2024 survey found that the most common challenge faced by homeowners was budget constraints (27%). 
• The survey also found that 23% of projects ran into delays, which can also mean higher costs. 
• Sometimes the costs aren't financial. The survey found that 26% of homeowners cited stress as one of the complications of their home improvement project. 

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.