Looking to undertake a home improvement project but worried about the cost?
With the best home improvement loans of 2023, you can make your dream home a reality without draining your savings.
Whether you plan to renovate your kitchen, upgrade your bathroom, or invest in solar panels or a new roof, these loans offer competitive interest rates and flexible repayment terms to suit your budget.
So why wait?
Keep your house in top shape and increase its value with the best home improvement loans of 2023.
Table of Contents
Find The Best Loan Providers
Many loan providers are ready to help you find the loan you need to fund your projects.
Here are some of the top loan providers to consider when finding the best home improvement loan.
1. Monevo
With Monevo, you can find a great loan option for almost anything. That includes home improvements.
Borrow up to $100,000 with no collateral in a few simple steps.
Monevo is an award-winning personal loan matching service, so you know you’re working with a reputable company.
2. PersonalLoanPro
PersonalLoanPro is not a lender, but they help you find the best loans available for your needs.
All you need to do is share some information about yourself, including credit and the type of loan you want.
Then, PersonalLoanPro will search through thousands of different providers to find the best loans for you.
The one downside is that the range typically ends at $50,000, meaning you’ll only be able to fund smaller projects.
Despite not finding loans with lots of money, it is a good start when you start small.
If you’re going for a whole house remodel, then there are plenty of other options on this list to help you out.
3. QuickenLoans
Ready to find a loan from America’s #1 lender?
Not only can you get your mortgage financed through QuickenLoans, but you can also find great deals on home improvement loans with real-time quotes.
Approval is quick with Rocket Mortgage.
You need to have a minimum of 620 on your credit score to receive loans.
The only bad thing about the company is that it doesn’t provide HELOC.
Unless you were fixing on getting a Home Equity Line of Credit, QuickenLoans offers many other loans.
4. Lending Tree
Lending Tree is not a lender, but they search through thousands of different lenders to find you the best deals.
They also have plenty of financial resources available to people needing a little extra help.
The best part is that all these resources, including the company’s services, are free to use without obligations.
You just need to sign in with your account.
You can also get up to 5 quotes to help ease the task of finding the best home improvement loan.
5. Discover
Discover Home Loans give you the highest amount you can borrow for a loan – up to $300,000.
It will also help cover the most costs for the most extensive home renovation projects.
You don’t even have to worry about an application or appraisal fees.
The process is done primarily online with help from live agents, who’ll take your information and help you.
One of the greatest assets of Discover is its policy of no application, origination fees, and zero closing costs.
6. Bankrate
Bankrate is there for all your financing needs. Yes, that includes tools for home financing.
They offer a unique asset of a home affordability calculator to help you set up a budget for your home.
From then on, you can use various comparison tools to help find the money for your home needs.
These can include mortgages, loans, and more.
Bankrate’s Spring EQ focuses primarily on HELOC and Home Equity Loans.
Their specialty is ensuring their customers get their money quickly and straightforwardly. You may be able to get your cash in only 14 days after approval.
They also offer free quotes.
7. Net Credit
The net credit is another lender focusing on providing customers with personal loans up to $10,000.
You have the flexibility to decide what you need first before signing any contract.
A unique feature of Net Credit is that you can grow your credit score for whatever loan you sign up for.
It is because Net Credit records your payments to credit bureaus so that every on-time payment can help increase your score.
It helps if you don’t start with the best score from the get-go. Just make sure you make on-time payments.
8. Figure
The Figure is a HELOC lender that can get your money daily.
Most HELOC lenders take a week or two to get your money, and it is because Figure deals with transactions mainly online using blockchain technology.
It also helps to say transactions were less costly, so you get more money for your loans.
Not to mention since this is a HELOC, you may be eligible to obtain cash up to $250,000 or more.
The Figure also offers a unique feature: the initial interest rate will stay fixed and be calculated based on the current market conditions.
It means that your payment will remain the same no matter what, so you don’t have to worry about fluctuating prices.
9. Veterans United Home Loans
This lender offers a way to help refinance your home improvement loans.
With its helpful tools, you can lower your interest rate or payment, change your loan term, take out cash on your home, and more.
Even if you don’t want to refinance, Veterans United Home Loans can get you a regular loan for your home improvement projects.
Related Post: Best Home Improvement Loans For Bad Credit
What Loans Do You Need For Home Improvement?
Even with small projects, home improvements can get pricey.
So, unless you’ve saved up thousands of dollars for these projects, you’ll want to look into acquiring a loan to help pay for them.
Once your budget is ready through sites like Goodbudget.com, you can search for suitable loans.
1. FHA 203k Loan
These types of loans are a great way to help pay off your home improvements.
Not only do they merge with your mortgage to ensure easy payment, but they also have a low-interest rate.
However, this type of loan isn’t easy to get.
If you are lucky enough to get approved for one, you must know the restrictions associated with this loan.
Below are a few requirements necessary to obtain an FHA 203k loan:
- Down Payment
- Proof of employment
- MIP (Mortgage Insurance Premium)
- %43 Debt-to-Income Ratio
- The home must be a primary residence
Keep in mind that some FHA 203k loans may have other requirements than those listed.
Make sure you understand the needs for the loan you want to take out. Contact your lender for more details about your FHA 203k loan.
2. Refinance Your Existing Loan
Did you know that some providers offer you a way to refinance your home improvement loans?
It is especially useful if you’ve already taken out a loan for previous projects. Like with many refinancing options, you may get a better interest rate.
3. HELOC
HELOC or Home equity line of credit is a type of credit.
It means you’ll be able to take out as much as you need from your lender.
There usually is a limit to how much you can take out.
However, you need to be able to pay off your loan at a variable interest rate.
Thankfully, these interest rates tend to be lower than other loans.
The HELOC does require you to have a high credit score to start.
The good thing about HELOC is that you can raise your credit score because this type of credit offers some flexibility to your repayment plan.
You still need to make continuous on-time payments, and it helps even if you don’t have the best score.
4. Home Equity Loan
So, what’s the difference between a HELOC and Home Equity Loan?
A HELOC is a line of credit, while Home Equity Loan acts more like a loan.
With a Home Equity Loan, you get to borrow a lump sum of money, and the value of your home is used as collateral to borrow money.
It ensures that you make regular payments to pay off your loan.
A Home Equity Loan is often called a second mortgage due to being a large loan that you’ll usually have to pay off along with your regular mortgage.
Don’t default on this loan, as doing so may cause foreclosure.
You also need to pay closing costs, unlike with other loans.
Despite some concerns, these loans are good because they usually have low fixed interest rates and are generally easier to qualify for than other loans.
5. Personal Loan
Yes, you can even use a personal loan for home improvements.
These loans will usually have a higher interest rate.
Your approval for these loans depends heavily on your credit score and income.
The best thing about them is that they are unsecured, so you need not worry about your loan being tied to an asset.
One of the best things about personal loans is that you don’t always need the best credit score to obtain one.
However, remember that a good credit score will help you get more money.
As long as you have a good history of payments and a debt-to-income ratio, you should have no problem finding a lender.
Note that Personal loans do tend to have a higher interest rate.
Pros And Cons Of Home Improvement Loans
Pros:
1. Access to funds: Home improvement loans provide access to the funds you need to complete your renovation project without tapping into your savings or home equity.
2. Fixed interest rates: Most home improvement loans offer fixed interest rates, which means your monthly payments will remain the same throughout the loan term.
3. Flexible repayment terms: Many lenders offer flexible repayment terms, allowing you to choose a repayment plan that fits your budget and timeline.
4. Potential tax benefits: Sometimes, the interest paid on a home improvement loan may be tax-deductible, potentially reducing your tax liability.
Cons:
1. Additional debt: Taking out a home improvement loan means adding to your debt load, which can negatively impact your credit score and financial situation.
2. Interest charges: Home improvement loans typically offer lower interest rates than credit cards, but you’ll still need to pay interest charges.
3. Fees: Some lenders may charge fees, such as origination fees, application fees, and prepayment penalties, which can increase the overall cost of the loan.
4. Risk of default: If you cannot make your loan payments on time, you risk defaulting on the loan, which can lead to additional fees and damage to your credit score.
Few things you may need a home improvement loan for:
- Additions
- Decks and Patios
- Flooring
- Landscape
- Heating and Cooling
- Décor
- Construction and Remodeling
- Walls and Painting
- Electrical
- Real Estate
- Windows and Doors
- Roofing
- Shower and Bath
- Plumbing
As you can see, home improvements cover a wide range of different projects.
Each of these projects can fit under a general goal of the homeowner, and some can even work under multiple purposes.
Here is a list of some plans homeowners usually fit their home improvement projects under:
(1) Maintenance
Probably one of the most common home improvement projects of the homeowner.
How often have you had to call the plumber because your toilet would overflow on a rainy day?
Or maybe some shingles came loose on the roof after a particularly windy day?
These improvements are vital for keeping your home and lawn in tip-top shape.
Maintenance is also essential to prevent costlier accidents from happening down the road. Be sure to always maintain your home.
(2) Comfort
Remember the swimming pool that we mentioned?
Maybe you have enough room that you finally decide you want to add in a hot tub.
But comforts don’t just stop with luxuries.
Upgrading ventilation so the airflow is adequately distributed can be just as comfortable for your home on a hot summer day then adding in an expensive pool addition.
It can also help reduce energy costs.
(3) Safety
Increasing the safety of your home can be as simple as installing a security system on your doors.
More extreme cases are bunkers and bomb shelters, which can cost a pretty penny, especially if your bunker is not being used.
In any case, ensure you understand your area’s risks to prepare yourself properly.
For example, suppose your neighborhood is prone to be the target of burglars.
In that case, investing in a security system will be wise.
It isn’t saying you should only skimp out on an alarm if you live in a high-risk area.
If you need to increase your home’s security regardless, don’t hesitate to install what you need to keep you and your family safe.
(4) Saving Energy
Upgrading your home’s electrical systems can save you money and help keep you safe.
No homeowner wants to receive a call that their home burned down due to faulty wires.
Upgrading and regular maintenance will help keep you safe and save you tons of money in the long run.
In addition, there are many other ways to help reduce costs for your home.
Going green with solar panels, wind turbines, and moss gardens is becoming a popular trend to save money economically.
You can save hundreds on your energy bill with the proper installations.
(5) Real Estate
Home improvements are a great way to up your home’s overall value.
By spending a little bit of extra money on a few improvements here and there, you can see the value of your home increase by the thousands.
These projects are mainly for people who eventually want to sell their homes.
However, that doesn’t mean they can’t benefit your other goals.
A great example would be the use of solar panels.
Solar panels typically increase a home’s value by 4%, and not to mention they also can save you thousands on your energy bill.
Does Home Improvement Require Loans?
It all depends on you and your projects.
In truth, the total cost of your home improvement project will come down to your research.
To determine the correct price for your renovations, you must consider many factors.
Some of these factors include where you live, the type of project, the home’s size, and the quality of materials.
Unfortunately, you can even come across some nasty hidden costs if you’re not careful.
We’ve compiled a list of things to consider while budgeting for your home improvement loans.
Do You Have The Right Permit For That?
If you’re doing a simple project like painting, you don’t need to worry about permits.
However, if you have bigger plans, you may need to look into whether or not you need access.
Usually, you only need to worry about permits if you do any construction, outdoor projects, or anything electrical.
These permit costs range from a measly $100 to a whopping $8,000. Again, this cost depends on where you live and your project.
Don’t ever skimp out on getting a permit.
The cost may seem like an inconvenience now, but it’ll help save you thousands in the future if you’re caught without one.
It’s best to be prepared.
Where Do You Live?
The cost of living in some places can be determined again by several factors.
If you plan on doing some home renovations, be aware of the cost of living in your area.
In New York, for example, you may be paying up to $100,000 on average for home renovation.
This price is drastically different than if you’d live in Arlington, Virginia, which averages $45,000.
Even though the costs vary from state to state, the mid-range for an entire house remodel averages about $40,000-$75,000.
But, of course, this is for a whole-house renovation, so you may pay less if you only work on small projects.
What Room Are You Renovating?
Did you know that certain rooms cost more to renovate than others?
Typically, the bathroom and kitchen are the most expensive rooms for a homeowner to renovate, and this is likely due to the appliances and plumbing for sinks and toilets.
Bathrooms range from $6,000 to $35,000, while the highest you can go on a kitchen reaches up to $50,000 or higher.
Still, it all depends on what you need for your situation.
The cheapest rooms to renovate are usually bedrooms and living rooms.
It makes sense since the main upgrade cost is usually just for the walls.
An average square foot of drywall costs around $5.00 making it one of the least expensive renovations.
The highest you may pay for any of these rooms is $6,000 on average.
Below is a complete list of the average cost to renovate each room according to HomeGuide:
- Whole House: $15,000-$200,000
- Gutting and Remodeling: $100,000-$200,000
- Exterior: $6,000-$20,000
- Roofing: $5,000-$11,000
- Kitchen: $10,000-$50,000
- Bathroom: $5,000-$25,000
- Bedroom and Living Room: $1,500-$10,000
- Basement/Attic: $20,000-$75,000
Again, these are just the average costs based on research from many different homes across America.
Are You Getting The Best Quality Materials?
I think it goes without saying, but better-quality material tends to lean toward the expensive side of the spectrum.
To help you decide what kinds of materials you need, you have to ask yourself serious questions.
Do I need that fine marble countertop?
Do you want porcelain flooring, or can you make do with tile?
The best way to find out what you need is to find the correct balance between quality and functionality.
Keeping up with the Joneses may seem like the best way to go until you find out you can spend less on materials that look and act as good as the more expensive ones.
Don’t ever fall under the trap that better quality means better because it’s more costly.
Can You Cut Costs With DIY?
The answer is yes.
If you know how to DIY appropriately, you could save hundreds of dollars on labor costs.
Work with caution, though, since a lousy DIY may cost you big time in the long run.
In short, make sure you know what you’re doing before you begin a project on your own: research until you know your project inside and out before starting.
One of the worst things you can do as a homeowner is to cut costs by making something yourself, only to find out later that the plumbing you installed in your bathroom last month burst unexpectedly.
Now you need to pay that extra labor to get your pipes reinstalled, including all the damage done.
It may not be a problem if you only want to paint your living room.
Bigger Isn’t Always Better
It is valid for your wallet when making home improvements.
Of course, we can’t fault you for having a big home, but a larger house does cost more to renovate.
On average, a home costs around $60 per square foot to renovate if you’re doing a full remodel.
So, the only way to save money is to scale down so you won’t have to pay as much for a bigger home.
How Old Is Your Home?
Older homes tend to cost more to renovate than older ones, and it is likely due to the cost of upgrades needed to keep outdated materials from falling on you.
When you enter an old house, you may notice the cracked ceiling, the weather-beaten exterior, and the carpet stains.
Older homes seldom have a spot on them needing repairs or upgrades.
Some bigger improvements could lie in the faulty electrical system if the previous owners didn’t take the time to upgrade it.
It’s easy to patch up a cracked wall but harder to install a new plumbing or electrical system.
To avoid getting scammed, you need to guess it, research, and understand the underlying costs required for your older home if you choose to buy one.
Otherwise, you’ll find yourself working on a new renovation every year.
Who Is Your Contractor?
Every contractor has a price to pay for their labor and skills.
Finding the best contractor for you is as easy as getting on their website and seeing what they offer.
It goes hand in hand with DIY costs.
You may start a project on your own and hit a roadblock.
Your contractor may be able to finish it for you for a lower cost than you would if you relied on them for the whole project.
Your contractor can also help you estimate the cost of your home with a detailed estimate.
With this, you can see a detailed list of all the expenses needed for the project.
It can save you time planning out everything for yourself.
One thing to note always does the proper research yourself on what your home would cost to avoid being scammed for stuff you don’t need.
Don’t Forget To Plan For Those Unexpected Road Bumps
Whether we like it or not, there will always be certain costs that creep upon us.
It is especially true when working on a home.
Maybe you’ll find out your home’s septic tank is in the wrong spot and needs to be moved.
Or you find mold in the walls and need a team to fumigate your house.
Always make sure you plan for unexpected costs in your budget.
As you can see, there are many different factors to consider when budgeting for your home.
It’s all up to you to find out when you’ll need it.
The next step would be to finance your home improvement projects with the right loans.
Conclusion
Investing in your home’s improvement is a wise decision, but it can come at a cost.
That’s why the best home improvement loans of 2023 are here to help.
From upgrading your kitchen to adding a new room, these loans can give you the financial support needed to keep your house in shape.
So, go ahead and start your dream project – with the right loan, it’s easier than you think!
FAQs
There are various types of loans you can consider for home improvements, such as a home equity loan, personal loan, or a government-backed loan like an FHA Title 1 loan.
The best option for you depends on your financial situation and credit score.
The loan term for a home improvement loan can vary depending on the lender and loan type. It can range from a few months to several years.
Sometimes, the interest paid on a home improvement loan may be tax-deductible. However, this depends on the loan type and your specific situation. You should consult a tax professional to determine whether you qualify for a deduction.
The interest rate on a home improvement loan can vary depending on the lender, loan type, and your credit score. Generally, interest rates on home improvement loans are lower than credit cards but higher than mortgage rates.
The credit score required for a home improvement loan can vary depending on the lender and loan type. However, most lenders prefer a credit score of at least 620.
Yes, there may be fees associated with home improvement loans, such as origination fees, application fees, and prepayment penalties. It’s important to carefully review the terms and fees of the loan before signing up for it.
