Best Home Improvement Loans in 2021
A home improvement loan is often sought to upgrade or remodel a big property and add to its resale value. Home improvement loans prove beneficial as they finance everything from construction to repairs to renovations, and whatnot.
Home improvement loans come in handy when you don’t want to provide your house as collateral and do not have sufficient equity. If you are researching ways to finance your home renovations, we have compiled some of the best options available in the market currently.
What are home improvement loans?
These loans are serviced over monthly installments within a specified period of few years. These loans can be up to 1000 000$ and have an annual percentage rate between 6%-36%.
How does a home improvement loan works?
A home improvement loan is typically an unsecured loan that has to be paid over 12 years with fixed monthly installments. Once you decide to opt for a home improvement loan, there are various lenders online who may fund you along with credit unions, banks, etc.
What do you need to qualify for a home improvement loan?
A good credit score is required to qualify for a home improvement loan. You will also need to make sure you have all the documents to prove your income. If you plan a loan by providing collateral, you need to get an appraisal done on the house to determine its value.
How to choose the best home improvement loans?
Choosing the best option for a home improvement loan depends upon the factors like the project you need to finance, the project timeline, creditworthiness, etc. If you need a loan quickly and don’t want to provide collateral, you need to narrow down your search to unsecured personal loans.
But if you are up to using your home as collateral, having a well-established credit history may help you qualify for a secured loan with relatively lower interest rates. Thus the factors to consider while selecting the best home improvement loan are as follows:
Lower Interest rates: Search for lenders that offer low-interest rates. Even if your credit score is not that strong, research for lends with maximum low-interest rates.
Loan amount: How much do you need to borrow? Are you tackling a significant renovation or just buying a piece of new equipment? Estimate the amount you need and search for lenders that offer the amount accordingly.
Fees: Lenders charge an origination fee, late payment penalties, miscellaneous fees on top of the principal amount and interest. Make sure you are aware of the fee payment that comes with the loan.
Repayment: Consider the period you have to repay the loan. Long-term repayment comes with lower monthly payments. Make sure you choose accordingly.
Thus, home improvement loans are a great option to make changes to your house and increase its resale value. However, make sure you have researched all options to find your best fit.
Top 10 Best Home Improvement Loans
The top five Home Improvement Loan options are as follows:
SoFi offers an attractive interest rate of 5.99% and as large as a $100,000 amount of loan to finance your home improvement needs. Be it a small renovation job or an extensive one, SoFi can cover all your needs.
Moreover, SoFi approves loans to its applicants without any hard credit inquiry and does not charge them any late fee, prepayment, or origination fee.
- SoFi does not require collateral.
- It provides an option to pause the payments in case of any difficulties temporarily.
- Funding takes a long time and might take up to one week to receive funds.
- A good credit score is required to qualify for a loan.
With Upgrade, you can get the annual percentage rate that you qualify for within minutes of filling the application form. They also provide quick processing and funding as compared to other options.
Upgrade offers personal loans of up to 50,000$ with low fixed rates. They offer affordable monthly payments that suit your budget and have no prepayment penalties.
- Upgrade offers secured, co-signed, and joint loan facilities.
- They offer rate discounts on direct payment to creditors with debt consolidation loans.
- Upgrade charges origination fees and penalties for late repayment.
Wells Fargo personal loans
Wells Fargo has multiple options to finance your home improvement loan, including an unsecured loan. You may be eligible to take a personal loan without collateral.
Wells Fargo has many branches all over the United States and might be an appealing option to the borrowers who would prefer discussing ways to finance a loan in person.
- Wells Fargo provides an option for unsecured home improvement loans.
- You can loan an amount as small as 3000$.
- There are three options available for the service: online, over the phone, and at the branch.
- The application process can be lengthy and can take a long time.
- Hard credit inquiry may be required.
- You need to be a customer of Wells Fargo to qualify for their online or over-the-phone application.
Light Stream is best suited for borrowers having an excellent credit score. The annual rate percentage on loans starts at 3.99%, and the lender charges no other extra fees. Well-qualified borrowers are eligible to borrow an amount of 100,000$ with no home equity requirements.
- Light Stream has low-interest rates starting from 3.99%
- Funding is quick, and borrowers may receive funds on the same day.
- Light Stream does not have home equity requirements and does not need appraisals.
- There is no pre-approval option available.
- It is tough to qualify for a loan if credit history is not stellar.
- 99% APR only applies to loans ranging from 10,000$ to 24,999$.
When your credit rating is not stellar, Avant is the right option for you to get a Home Improvement loan. The annual percentage rate (APR) of Avant starts at 9.95%, and they have administrative fees up to 4.75%. This option is specifically best suited for middle-income-borrowers. Though it is not the most affordable financing, they have attractive options to offer.
- Avant does not require any home equity to qualify for a loan.
- Funding is quick, and one can receive funding within a day.
- A soft credit history that has no impact on your credit history tells you if you qualify for a loan.
- The administrative fee of 4.75% may increase the amount of your loan.
- You may get lower interest rates from elsewhere.