Tips for Comparing Home Improvement Loans

Consider these tips when comparing home improvement loans:

  • Consider how much money you need. Different home improvement loans offer various loan limits. Before applying for a loan, review your project and identify how much it is going to cost. Based on that information, compare loan options that can provide a sufficient amount of funds.
  • Where possible, prequalify. Many personal loan providers offer prospective borrowers the ability to prequalify for a loan with only a soft credit inquiry, so it won’t ding your credit score. This means the applicant can submit details about their financing needs, income, housing situation and other relevant information to find out what kind of loan amounts, rates and repayment terms they are likely to qualify for.
  • Keep an eye out for additional fees. Some lenders offer fee-free home improvement loans that help borrowers avoid origination fees, late payment fees, prepayment penalties and other common loan costs. However, this is more the exception than the rule, so it’s important to ask about fees when shopping for the best loan terms.
  • Evaluate the lender’s customer support options. While customer support may not seem like a big deal in the honeymoon phase of your loan, it can make a huge difference if you encounter issues with payments or face a financial hardship during your repayment period. Review the lender’s customer service resources and read reviews from past and current borrowers to make sure it’s a good fit.

Methodology

We reviewed 18 popular lenders based on 14 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the six best lenders based on the weighting assigned to each category:

  • Loan details: 20%
  • Loan cost: 35%
  • Eligibility and accessibility: 20%
  • Customer experience: 15%
  • Application process: 10%

Within each category, we also considered several characteristics, including loan amounts, repayment terms, APR ranges and applicable fees. We also looked at minimum credit score requirements, whether each lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like prequalification and mobile apps.

Where appropriate, we awarded partial points depending on how well a lender met each criterion.

Updated: March 12, 2022 — 2:21 pm