Product matching is a result of many factors, including provider marketing criteria. Matches or products included are from providers who compensate us. This compensation may impact which products appear and how they appear.
Compare Home Improvement Loans in November 2024
Find Your Custom Home Improvement Loan
Est. APR: 5.40% – 35.99% APR
Loan Amount: $600 to $100,000
Credible
Est. APR: 8.99-23.43%
Loan Amount: $5,000-$100,000
SoFi
Benefits of Home Improvement Loans
Home improvement loans are designed specifically to finance home renovation or remodeling projects. Here are some benefits of using a home improvement loan:
Dedicated funding
Home improvement loans provide you with a dedicated source of funding for your renovation projects. Instead of using personal savings or credit cards, these loans offer a specific amount of money to be used solely for home improvements.
Flexible loan options
Home improvement loans come in various forms, including personal loans, home equity loans, and home equity lines of credit (HELOCs). This provides flexibility in choosing the loan type that best suits your needs, financial situation, and preferences.
Lower interest rates
Home improvement loans often come with lower interest rates compared to credit cards or personal loans. If you have good credit, you may be able to secure a favorable interest rate, reducing the overall cost of borrowing.
Fixed repayment terms
Home improvement loans typically come with fixed repayment terms, allowing you to budget and plan for the monthly payments. This stability helps you manage your finances effectively and ensures you’ll pay off the loan within a specified timeframe.
Potential tax benefits
Depending on your country’s tax laws, the interest paid on a home improvement loan may be tax-deductible. This can provide additional savings and make the loan even more cost-effective. Consult with a tax professional to understand the specific tax implications in your jurisdiction.
Increase home value
By investing in home improvements, you can potentially increase the value of your property. Upgrades such as kitchen renovations, bathroom remodeling, or energy-efficient enhancements can enhance the appeal and functionality of your home, leading to a higher resale value.
Avoid tapping into savings
Using a home improvement loan allows you to avoid depleting your savings or emergency funds. Instead, you can preserve your cash reserves for other purposes, such as emergencies or future investments.
Quick access to funds
Home improvement loans often have a straightforward application process and a relatively quick turnaround time. Once approved, you can access the funds promptly and begin your home improvement projects without unnecessary delays.
Remember to carefully consider your budget, repayment capacity, and the potential return on investment for your planned renovations. It’s essential to compare loan options from different lenders, review the terms and conditions, and choose the loan that best meets your specific needs.
Frequently Asked Questions (FAQ)
What are home improvement loans?
Home improvement loans aren’t like student loans or mortgage debt, where you take out a loan that can only pay for education or buying a home. Home improvement loans are any type of personal loan used to make changes to your house. These changes can be cosmetic or required for safety reasons like removing a tree branch that fell onto your roof during a storm. There are two types of loans available for home improvement: secured and unsecured.
What are secured home improvement loans?
Secured debt requires collateral for approval. One common type of secured debt is a mortgage loan. With a mortgage loan, your real estate property is an asset attached to the loan as collateral. It means that if you default, or can’t pay the loan, the lender takes the property to make up for the loss.
Another type of secured debt is a credit card. Secured credit cards are most common for people looking for ways to build credit. With a secured credit card, cash is put into a savings account with a bank to serve as collateral for a loan. The money in the account can’t be accessed until the end of a term set by the lender. The lender can collect the cash at any moment if you fall behind on payments.
Secured debt might seem like a win-win situation, but it comes at a higher cost to you than the lender. You could lose hard-earned cash or your home if you face an unexpected financial crisis. But lenders are more willing to offer secured loans because they are less risky. Interest rates on secured debts are usually much lower than that of unsecured debt. Lower interest rates mean lower monthly payments.
Another benefit of secured debt is getting access to more jumbo loans. Lenders extend more credit to borrowers who have a guaranteed way to repay if they fall behind on their loan payments. You can also expect a more extended repayment period on secured debt. Lenders make money on your loan by charging interest. The lender makes more money on the longer term loans. That is also a perk for borrowers because it means stretching out the loan balance over a longer time and lowering your payments.
What are unsecured home improvement loans?
Most people think of credit cards when thinking of unsecured debt. Unsecured debt isn’t attached to an asset. If you can’t repay the debt, the lender loses money. That makes unsecured loans much riskier for lenders than borrowers.
The pros of unsecured loans are that there’s no risk of your losing personal property or valuables if you default on the loan. You can also expect a shorter repayment period, which is better if you have a reasonable interest rate on your loan.
But the riskier loan comes at a higher cost to borrowers. Because lenders have no guarantee of repayment, getting a low-interest rate is more difficult unless you have excellent credit. Lenders are also less likely to provide unsecured loans in large amounts. If you don’t have good credit, it’ll be hard to qualify for an unsecured loan at all because lenders don’t have proof that you have proper financial management.
Advertising Disclosure
We are an independent, advertising-supported comparison service. The offers that appear on this site are from companies from which we receive compensation. This compensation may impact how and where products appear on this site, including for example, the order in which they may appear within listing categories. The ranking is determined at our own discretion and should not be considered an endorsement (express or implied). The information and vendors which appear on this site is subject to change at any time. To the extent that ratings and rankings appear on this site, these are determined by both our subjective opinion and based on a methodology that aggregates a number of factors, including but not limited to, our analysis of brand market share based on origination volume and number of leads purchased, reputation according to such factors as JD Power customer service awards, compensation paid to us, and general consumer interest and awareness. For Credit Cards, Quicken Compare has partnered with CardRatings for our coverage of specific credit card products. Quicken Compare and CardRatings may receive a commission from card issuers.
Quicken Compare Score
The Quicken Compare score is based on multiple factors such as the most popular choice, consumer feedback and our internal evaluation. The score is unbiased and its goal is to provide you with a relative recommendation of offers as you compare the brands listed in our marketplaces. We do receive monetary compensation if you utilize the brands listed which allows us to keep this service free.
Editorial Note
Quicken Compare, a LMB Opco, LLC company, is compensated by third-party advertisers, however, any opinions, analyses, reviews or recommendations expressed in editorial content are of the author alone and have not been reviewed, approved, or otherwise endorsed by the advertiser. We make every effort to provide up-to-date information, however we do not guarantee the accuracy of the information presented. Consumers should verify any terms and conditions with the institution providing the products. Articles may contain some sponsored content, content about affiliated entities or content about clients in the network. QuickenCompare does not include all lenders or offers available in the marketplace. The content displayed on QuickenCompare or in this video does not provide legal, financial, accounting or tax advice. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.