The Best Home Improvement Loans: A Breakdown of the Top Loan Options for Renovations, Repairs and Upgrades

There's no single best home improvement loan.

Personal loans work well for smaller, faster projects with rates typically ranging from 6.5% to 36%, while home equity loans and HELOCs offer lower rates (often 6% to 11%) for larger renovations but use your home as collateral.

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The right choice depends on your project size, credit score and how much equity you have.

Key Takeaways

• Loan type should match project size.

  Smaller or mid-size projects may fit an unsecured personal loan, while major renovations or additions may be better served by tapping home equity or using an FHA Title I loan.

• Personal loans deliver fast, predictable funding.

  Lenders like LightStream, SoFi, Discover and Upgrade can fund a lump sum within one to two business days at fixed APRs, but you'll need solid credit for the lowest rates.

• Home equity loans and HELOCs typically cost less but carry more risk.

  Rates often run 6% to 11%, well below most unsecured personal loan rates, but missing payments on a secured loan can put your house at risk.

• A good credit score (670 or higher) unlocks the best rates.

  Most lenders in this space set minimums between 580 and 700 depending on the loan type.

• The FHA Title I program helps homeowners with limited equity.

  It caps single-family loans at $25,000 and doesn't require collateral for loans of $7,500 or less.

Summary generated by AI, verified by MoneyLion editors

What Are the Best Home Improvement Loans?

The right home improvement loan depends on your project, credit profile and how much home equity you have. Here's a breakdown of standout options for different needs:

Best for Quick Approval: LightStream

LightStream is a solid choice if you need funds fast. With loans ranging from $5,000 to $100,000, LightStream offers same-day approval and funding with competitive interest rates. You'll typically need a good-to-excellent credit score of around 700 to qualify, and there are no origination fees to worry about.

Best for No Fees: SoFi

SoFi is worth a look if you want to avoid extra costs. With no origination fees, no prepayment penalties and loan amounts from $5,000 to $100,000, SoFi offers flexibility without hidden charges. You'll generally need a credit score of at least 680 to qualify, and perks like unemployment protection can add extra value.

Best for Fair Credit: Upgrade

If your credit isn't perfect, Upgrade may still work for you. It specializes in loans for borrowers with fair credit, with a minimum credit score around 580 to 600, and offers loans up to $50,000 with quick approval. The trade-off is a slightly higher interest rate and an origination fee between 1.85% and 9.99%.

Best for Low Interest Rates: Discover

Discover Personal Loans offers some of the lowest fixed APRs in this category, starting around 7% with no fees. It lends up to $40,000 for renovations, though you'll generally need a credit score of 660 or higher to qualify. Flexible repayment terms and no prepayment penalties round out the appeal.

Best for Home Equity Loans: U.S. Bank

If you've built equity in your home and want a larger loan, U.S. Bank offers competitive home equity loans with rates lower than most personal loans. You'll need a solid credit score and meaningful home equity to qualify.

Best for a HELOC: Bank of America

For borrowers who want flexibility, a home equity line of credit from Bank of America is worth considering. Low introductory APRs and the ability to draw from your credit line as needed make it a good fit for ongoing projects. Lenders typically require meaningful equity in your home and a good credit score, so it's worth confirming the exact requirements directly before applying.

Best for FHA-Backed Loans: Wells Fargo

Wells Fargo's FHA program suits major renovations that need government-backed financing. Depending on the program, you may be able to borrow based on your home's future value, with the Federal Housing Administration backing the loan. This option can work well if you need extensive repairs and don't qualify for conventional financing, though it typically requires a credit score of at least 580 and comes with mortgage insurance premiums.

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms and fees from different lenders and choose the best offer for you.

How Do Home Improvement Loan Types Compare?

Each loan type balances cost, speed and risk differently.

Rates and terms reflect industry averages as of mid-2026 and vary by lender and borrower profile, so confirm current figures directly before applying.

What Credit Score Do You Need for a Home Improvement Loan?

FICO scores run from 300 to 850 and break into five tiers: poor (300 to 579), fair (580 to 669), good (670 to 739), very good (740 to 799) and exceptional (800 to 850).

Most home improvement lenders set minimum credit score requirements somewhere in the fair-to-good range, typically 580 to 700, though a good credit score or higher generally unlocks better rates and larger loan amounts.

Beyond your score, lenders also weigh your income, employment history and debt-to-income ratio before approving a loan. Review our full list of personal loan requirements before you apply.

How Do You Compare and Choose the Best Home Improvement Loan?

1. Check your credit score. Higher scores usually mean access to better rates and more loan options.

2. Compare offers from multiple lenders. Don't settle for the first offer. MoneyLion can help you compare personal loan offers from top providers based on the information you share.

3. Look at the total interest cost, not just the rate. A lower interest rate typically means less money paid back over time, so run the numbers on how loan interest is calculated.

4. Consider loan term and repayment period. Shorter terms mean higher monthly payments but usually less total interest.

5. Evaluate fees and closing costs. Some loans, especially secured ones, come with origination fees, appraisal costs or closing costs that add to the total price.

6. Get prequalified before applying. Prequalification gives you an estimate of what you might borrow without affecting your credit score.

Is Home Improvement Loan Interest Tax-Deductible?

It depends on the loan type.

Interest on an unsecured personal loan used for home improvements generally isn't tax-deductible. Interest on a home equity loan or HELOC may be deductible if the funds are used to substantially improve the home that secures the loan, subject to IRS limits.

Our guide on whether home improvement loan interest is tax-deductible offers a fuller breakdown, and it's worth talking to a tax professional before assuming a deduction applies to your situation.

Nail Your Home Improvement Financing

Choosing the right loan for your home improvement project balances cost, convenience and risk. Whether you're after a quick personal loan or leveraging your home's equity for a bigger project, understanding the loan types available and comparing offers side by side will help you make the best decision for your budget.

Bottom Line

The best home improvement loan depends on your project size, credit profile and how much home equity you have.

Personal loans from lenders like LightStream, SoFi and Discover offer fast funding at fixed rates typically between 6.5% and 36%, while home equity loans, HELOCs and FHA Title I loans generally cost less but put your home on the line as collateral.

Compare a few lenders across both categories, check your credit score and run the total interest cost before you commit to a loan.

Key Terms

• Home improvement loan: A loan used to pay for repairs, upgrades or additions to a home, often structured as a personal loan, home equity loan, HELOC or renovation mortgage.

• Personal loan: An unsecured installment loan that gives you a lump sum you repay in fixed monthly payments, usually over one to 10 years.

• Home equity loan: A fixed-rate, lump-sum loan secured by your home that lets you borrow against your equity and repay it over a set term, often at lower rates than unsecured credit.

• Home equity line of credit (HELOC): A revolving line of credit secured by your home that lets you draw, repay and redraw funds up to a limit during a set draw period, usually with a variable rate.

• FHA Title I loan: A government-backed loan insured by the Federal Housing Administration that lets homeowners with limited equity finance property improvements, capped at $25,000 for a single-family home.

• Annual percentage rate (APR): The yearly cost of borrowing expressed as a percentage, including the interest rate and certain fees, so you can compare loan offers.

• Origination fee: An upfront fee some lenders charge to process and fund a loan, usually shown as a percentage of the loan amount.

• FICO score: A credit score ranging from 300 to 850, split into poor, fair, good, very good and exceptional tiers.

Summary generated by AI, verified by MoneyLion editors

Sources

• Consumer Financial Protection Bureau: What Is a Personal Installment Loan?

• Consumer Financial Protection Bureau: What Is a Home Equity Loan?

• Federal Trade Commission: Home Equity Loans and Home Equity Lines of Credit

• U.S. Department of Housing and Urban Development: Title I Property Improvement Loans

• myFICO: What's in My FICO Scores?

Summary generated by AI, verified by MoneyLion editors

FAQ

Here are quick answers to common questions about home improvement loans:

What is the easiest home improvement loan to get approved for? Personal loans from lenders that accept fair credit, generally scores as low as 580 to 600, tend to be easier to qualify for than secured loans, though you may pay a higher interest rate and origination fee.

Is a personal loan or a home equity loan better for renovations? It depends on your project. Personal loans work well for smaller, faster projects since they don't require home equity, while home equity loans and HELOCs typically offer lower rates and larger amounts for bigger renovations, at the cost of using your home as collateral.

How much can I borrow for a home improvement loan? Personal loans for home improvement generally range from $1,000 to $100,000, while home equity loans and HELOCs depend on how much equity you've built.

Do home improvement loans hurt your credit score? Applying for a home improvement loan typically triggers a hard credit inquiry, which can cause a small, temporary dip in your score. Making on-time payments afterward can help offset that over time.

Can I get a home improvement loan with bad credit? You may still qualify for a personal loan with bad credit, but you'll likely face a higher interest rate and possibly an origination fee. A secured loan option may offer better terms if you have collateral available.