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Home Improvement Loans of december 2022 in the United States

Apply for home improvement loan from companies verified by our specialists. On 03.12.2022 you have access to 0 home loans with a low rate. Increase your chances of getting money — fill out a multi-application with a free credit rating check.

Home Improvement Loans calculator in the United States

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Types of mortgage loans

Arrowhead Advance
3.2
Olivia H
Olivia H
01.12.2022 at 06:07
My experience with getting a personal loan from this company was quite pleasant. The service was fast, no one asked about any collateral or my creditworthiness. Such things are always annoying...
Review
Spotloan
4.4
Noah J
Noah J
30.11.2022 at 20:45
Before taking out a loan, I compared Spotloan with other lenders and found out that their rates are the most acceptable. The mobile application works flawlessly. I quickly received approval...
Review
Spotloan
4.4
Isabella H
Isabella H
30.11.2022 at 20:40
At first, I liked everything in this company. I needed a payday loan and they offered a good alternative. Almost no documents are needed, it's true...
Review
Spotloan
3.8
Camila J
Camila J
30.11.2022 at 20:40
Spotloan is like a good old friend to me. I always try to make payments on time, so I usually have no problems with creditors. This company has simplified all possible procedures for obtaining a loan...
Review
Spotloan
3.6
Emma S
Emma S
30.11.2022 at 20:40
A very convenient application of the company. You can borrow small amounts starting from $3,000. In addition, the company operates in most states...
Review
Spotloan
4.6
Mateo J
Mateo J
30.11.2022 at 20:35
If you've never seen a company that can give you a maximum of $800, then this is just about it. But they respond to the application very quickly, they also quickly approve and transfer money to you...
Review
Home Improvement Loans of december 2022

Homeowners should consistently renovate their houses in order to maintain or increase the house value. It is an obligation for homeowners. Home improvement project can cost large sums, and to cover such amounts, and your savings may be insufficient. Moreover, you need to pull money into renovation over and over again.

Home improvement loans are exactly the funding you can opt for to cover such expenses.

What is a home improvement loan?

A home improvement loan is an unsecured personal loan used for covering home renovation projects. The minimum loan amount on home improvement personal loans is typically $1,000 and can reach up to $100,000. The interest rate is generally fixed, and the loan repayment terms are in the form of installments. This means you will be paying back equal amounts until you pay back the entire sum. The loan term is from two to 15 years.

Unsecured home improvement personal loans don't require you t provide any collateral. The lenders will determine if you are eligible based on your credit score, income, and DTI ratio. You can take a home improvement loan from traditional lenders, like banks and credit unions, and from private lenders.

If you are approved for a loan, the lender sends you the entire amount at once. You can use them to make renovations. You start paying back one month after you sign the contract. The loan costs include both your interest rate and loan balance. The interest payments vary depending on the lender. There are also fees and penalties, and the most common is an origination fee in the amount of 5% of your loan balance.

The loan is not revolving. You take a loan amount and spend it. Once you pay back, you need to start the application procedure again to get more funds.

Pros and cons of home improvement loans

Pros

  • You get a loan with fixed monthly payments. You will pay back monthly until you pay off the total loan cost.

  • If you apply for an online lender, your application will generally take several minutes, and you will get money within two days.

  • There is no collateral. You don't need to provide any assets to secure the loan, so the lender cannot use any property of yours to cover the debt.

  • Most lenders provide unsecured home improvement loans with fixed interest rates. If you pay on time, your monthly payments won't change.

Cons

  • Some personal loans have high interest rates. As it is an unsecured personal loan, your interest rate will be based on your credit history and income. If you have poor credit, your interest rate will be higher.

  • There is no option for a tax deduction on the home improvement loans.

  • The lenders can charge numerous fees, which increase the total cost of your loan.

Types of home improvement loans

Home improvement loans come in different types. You can use any of them towards your home improvements.

  1. Personal loan. This is an unsecured loan you can use for any personal purpose. They are good for borrowers wishing to avoid collateral. However, because you don't provide collateral, you must have an excellent credit history to get favorable terms.

  2. These personal loans may have high interest rates, fees, and penalties. You should carefully read your contract before signing it. Address your lender if you have trouble understanding the terms, as they are obliged to educate you on the loan details.

  3. Opt for personal loans if you know how much funding you need and have excellent credit. Compare the personal loan lenders and calculate the monthly payment amounts.

  4. Home equity lines of credit. HELOCs are revolving loans secured by your house. You take money to cover expenses related to the house as you need them. It is good for large purchases, and you don't need to know the exact sum to borrow.

  5. As you pay back, you can take the amount up to the approved limit as many times as you need throughout the personal loan term.

  6. Your home will be collateral. This means your lender can sell the house to cover the debt if you fail to pay it back. However, this helps you to get lower interest rates.

  7. A home equity loan is a lump-sum loan you can use for home improvement projects. It is a secured form of funding, so you sign your home as collateral. This allows you to receive a lower interest rate, but you may lose your home if you don't meet the payment schedule.

  8. Home equity loans are good for applicants who want to get lower interest payments and know the amount they want to get. You need to conduct an appraisal on your home, which extends your approval duration.

Home improvement loans vs. equity financing

Home improvement loans suit homeowners with not enough equity in their homes or who want to avoid collateral. They are unsecured, fast, and have interest rates depending on your personal credit.

You can finance home improvement projects with an unsecured home improvement loan on the amounts.

  • Not exceeding 90% of the home's selling price for primary use from top-tier developers

  • Not exceeding 80% of the home's appraised value for primary use from individual sellers or non-top-tier developers

  • Not exceeding 60% of the home's selling price or appraised value for investments or secondary home, or if the loan's purpose is home equity.

The repayment terms with lenders can range from a minimum of one year to a maximum of 25 years for a house and lot, 20 years for a townhouse or duplex, 15 years for a vacant residential lot, or 20 years for a condominium unit.

Equity loans use the home appraisal and require submitting your home as collateral. This way, you can get lower interest and pay less interest amount over time. The monthly payments don't change, as they are fixed and equal.

How to choose a lender?

To receive good loan terms, you need to focus on choosing the right for your financial situation lender. Compare the loan options based on the following:

  • Determine how much funding you need. Each lender has its own offers with various maximum loan amounts. Review your home improvement project and estimate the total amount of money you need to cover all the expenses. This will help you find loans with suitable limits.

  • Pre-qualify with several lenders. Financial companies have general terms on their websites, but this is not what you get. Your loan details can be quite different, and the lender will send you how much they are ready to offer you. Pre-qualification also helps to eliminate the lenders who are not ready to approve you for the loan.

  • The lenders usually issue at least one type of fee. You need to determine what fees will be charged on your loan. These can be origination fees, late payment fees, and prepayment penalties, which increase the total cost of your loan.

  • Check if the lender is approved by legitimate organizations and if they are an Equal housing lender. You can see if the lender itself is legitimate. Reviews are another helpful indicator. You can find out the common problems borrowers encounter with a particular lender.

  • Use a loan calculator to figure out how much you will be paying back and whether you can afford it. A loan calculator can also help you to see how much you will overpay on the loan interest.

How to get a home improvement loan

As you compare online lenders or traditional financial institutions and choose some of them, you can proceed with the application.

Prepare your documents

The general home improvement personal loan eligibility details lenders require from applicants are the following:

  • A filled-out and signed application form

  • Clear copy of a valid ID of a borrower, a spouse, or a co-borrower and signatories of the loan

  • Proof of income, which may be a Certificate of Employment and Compensation, Income Tax Return, the latest 3 months' Payslips, or the latest 3 months' Bank Statements

  • A filled-in Mortgage Redemption Insurance (MRI) application form

  • Relevant collateral documents

For self-employed borrowers, the proof of income can be as audited financial statements, bank statements, lease, or rental contracts.

Corporate borrowers must attach the company's background, owners, key officers, SEC Registration and General Information Sheet, bank statements (latest 3 months), income tax return with audited financial statements, suppliers' contact info, customer's contact info, authorization letter, Mortgage Redemption Insurance (MRI) application form, and relevant collateral documents.

Submit an application

You can apply in person at banks or credit unions or online. You can receive a decision from your lender within one or two business days after you apply. They will contact you via e-mail or phone.

You will have to sign the loan agreement. Review all the terms stated there and sign only if you agree. You will get funds in your savings or checking account or in cash.

If you receive a rejection, ask what the reason for such a decision is. If it is because of your credit score, you can try to improve it. You can boost it by taking a smaller loan and paying it back on time. Check if your credit has improved and try to apply for a home improvement loan again.

If the lender states such reasons as improper debt-to-income ratio, you need to reduce your debts or try to increase your income. Home equity may be another reason for rejection. If your home doesn't have enough, you may have to make improvements using other loan funding options, like a personal loan.

FAQ

What is the easiest way to get money for home improvements?

The cheapest options to receive funds for home improvements are borrowing from friends or family, taking a cash-out mortgage to refinance, home equity line of credit, HUD or FHA loans, home equity loan, credit card, and home improvement loans.

Which loan is best for home improvements?

You might consider getting an FHA loan if you know the exact amount you need. It is backed by the government, so you will have such benefits as a low down payment or the ability to apply with a less-than-perfect credit score.

Is a home improvement loan hard to get?

Homeowners wishing to add value to their homes can apply for home improvement loans. If you have good credit and a high income, these unsecured personal loans are easy to get. On this fixed-rate loan, you can get affordable monthly payments.

What credit score is needed for a renovation loan?

The credit score you need for home improvement loans will depend on the loan type and the lender you try to qualify with. The minimum credit score requirement generally is a minimum of 620 FICO scores. If you apply for home equity loans or HELOCs, the requirements will generally be around 660-700 and higher.