Best Home Improvement Loans of 2026

A home improvement loan is a personal loan used to pay for home renovations, upgrades and repairs. You can use secured or unsecured personal loans to finance virtually anything, from HVAC replacements to bathroom remodeling. Personal loans typically have fixed interest rates and monthly payments, allowing you to repay the money you borrowed over a set period of years.

Home improvement loan amounts can range from $1,000 to $100,000 or more, which gives you the flexibility to finance minor or major projects if you don’t have tappable equity – or if you simply don’t want to use your home as collateral. That being said, you can also use home equity loans and lines of credit, or HELOCs, to pay for home improvements.

If you need to borrow money to finance home improvements, interest rates will depend on which type of loan you choose. Unsecured personal loans used for home improvement will typically carry higher interest rates than home equity loans, but you may be able to qualify for a competitive rate if you have good or excellent credit.

Home improvement loan rates can range from 6% to 36%, but the average rate on a two-year personal loan was 11.86% in May 2026, according to the Federal Reserve. Loans with longer repayment periods may carry higher interest rates, especially for applicants with fair or bad credit. You may be able to find more competitive rates through a credit union.

If you were to choose a HELOC instead of a loan, keep in mind that interest rates are variable – meaning they could fluctuate over time. On the other hand, personal loans and home equity loans typically offer fixed interest rates, which stay constant while you repay the loan.

The average rate for a $30,000 HELOC is at 7.43% as of July 15. This average is based on a FICO score of 700 and a combined loan-to-value ratio of 80% for primary single-family detached homes.

This analysis is powered by Bankrate, which gathers data from applicants who prequalify for HELOCs through its website and affiliates.

You can use this calculator to estimate your monthly payment on a home improvement loan. Not sure how much your project will cost? Get a rough idea of how much money you could expect to spend on some common renovations in the table below.

Consider your eligibility. Generally, you’ll need at least a 620 FICO credit score to be approved for a home improvement loan, but having a higher credit score will afford you lower interest rates. Review your credit report to check for errors, and work on paying down debt before you apply for a home improvement loan.

Applicants with very good or excellent credit will qualify for the best terms on home improvement loans. That said, some personal loan lenders like the ones listed above will work with borrowers who have low credit scores, although the interest rates will likely be high. Here are a few tips for borrowing a home improvement loan if you have less-than-stellar credit:

Before you choose a loan, be sure to read the terms carefully to ensure you’re working with a legitimate company and not a predatory lender, like a title loan company or payday lender.

Personal loans are commonly used to pay for home improvements, but they’re not the only way to finance upgrades and repairs to your home. For homeowners with sufficient equity, it may be worthwhile to consider options like home equity loans and HELOCs, which may come with more competitive interest rates and repayment choices.

A home equity loan is a second mortgage from a bank, credit union or other lender enabling you to borrow against the equity in your home. Interest rates are typically fixed and fluctuate with greater market conditions. Lenders usually limit you to borrowing against 80% to 90% of your home’s value. You will repay the balance with equal monthly payments over a fixed term, in addition to your original mortgage.

A HELOC allows you to borrow money during a designated draw period and repay it at a fixed or variable interest rate. Most HELOCs still come with variable rates, but fixed-rate HELOCs are also widely available. Like home equity loans, HELOC borrowing is limits run 80% to 90% of the property value. Compared with home improvement loans and home equity loans, HELOCs may be a better option if you’re unsure of your project’s final costs, since you only pay interest on the amount you borrow.

However, tapping equity to pay for home renovations comes with its fair share of drawbacks, especially for smaller loans. With home equity loans and HELOCs, you’ll have to go through a closing process and pay for a home appraisal, which means it could take weeks to receive the money you wish to borrow. And for lower loan amounts, the up-front costs can be high compared to the amount borrowed. The biggest risk is that home equity loans and HELOCs are secured by your home, meaning you could lose it if you don’t repay the money you borrowed.

A cash-out refinance replaces your mortgage with a new home loan for more money than you owe on the original mortgage, giving you the difference in cash at closing. Lenders usually allow cash-out refinances to 80% of the home’s value, but some programs allow more. With VA home loans, you can get cash out up to 100% of your property value. Your refinanced home loan will have a new balance, payment, interest rate and repayment terms.

Compared to other unsecured options, mortgage refinancing can offer lower interest rates and comes with the added benefit of the mortgage interest tax deduction. (Check with a tax pro before refinancing if this is important to you.) However, cash-out refinance charges apply to the entire loan balance, not just the cash out, which can make this an expensive choice if you want to borrower a smaller amount. Finally, you’ll owe more on your mortgage, since you’re refinancing to a higher balance.

Charging home improvements on your credit card may sound like an easy way to fall into debt, but it can be effective if you exercise a good amount of discipline. Applicants with very good or excellent credit may qualify for a credit card with an introductory 0% APR period which typically lasts anywhere from six to 24 months. This can enable homeowners to finance small renovations at zero interest if the money is repaid before the 0% APR period ends.

Be sure to get a few estimates to see if a credit card can cover the costs, since the maximum amount you can borrow with a credit card may not be enough to finance the cost of big-ticket renovations like a roof replacement. And come up with a realistic repayment plan as the total cost can add up if you don’t repay the amount you borrowed before interest begins to accrue.

Backed by the Federal Housing Administration, a Title 1 loan is used to finance the cost of certain repairs and upgrades to a home, including livability improvements (replacing the plumbing or HVAC system), accessibility improvements (adding ramps for wheelchair access) or green improvements (installing solar panels). You can borrow up to $25,000 secured by your home, depending on the project, or up to $7,500 unsecured.

An FHA Title 1 loan gives low- to moderate-income homeowners an alternative to tapping home equity to pay for home improvements, but these loans have strict requirements for how you can use the funding, as well as who qualifies for funding. Not all lenders offer FHA Title 1 loans, so it may be challenging to find a lender to work with.

The Department of Veterans Affairs offers renovation loans that let you buy or refinance a property and roll the home improvement costs into the mortgage. Eligible military personnel and their families may be able to borrow up to 100% of the home’s as-completed value. Like with an FHA Title 1 loan, VA renovation loans cannot be used to finance luxury improvements like building a pool.

You can get a competitive rate on a VA home loan with 0% down. However, this type of loan can only be used to buy a new home or refinance your current mortgage, so you can’t just borrow on top of your original loan. Also, you’ll need to meet the VA’s military service requirements in order to be eligible for a VA renovation loan.