Home improvement is big business in the United States to the tune of$538 billion.
And that figure is expected to grow mightily in the next few years.
Specifically, a home improvement loan.
What Is a Home Improvement Loan?
A home improvement loan is financing thats specifically meant to pay for home-related expenses.
This includes things like repairs, or even an addition for your house.
Many brick-and-mortar banks, credit unions and fintech companies offer these types of loans.
(And sometimes this loan is simply referred to as apersonalloan.)
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Secured Loans vs.
Unsecured Loans
Lets take a quick detour to discuss secured loans and unsecured loans.
6 Types of Home Improvement Loans
You have several options when it comes to home improvement loans.
Heres what you’re gonna wanna know about the different types of loan funding.
1. Credit Card
OK, this isnt a loan, but its still an applicable payment option.
If youre in a pinch, you could put a home expense on an existing credit card.
before the higher interest rate kicks in.
Personal Loan
Apersonal loanis an unsecured loan that can be used to pay for just about anything.
If you need money quickly, this might be your best bet.
you might stick with your current bank or shop around for a personal loan that meets your needs.
Traditional banks, credit unions and financial institutions all offer personal loans with various conditions and rates.
The money is usually dispersed within one to two weeks.
Unlike a HELOC, interest rates and monthly payments are fixed.
Cash-Out Refinance
With acash-out refinance, you use some of the equity in your home to get cash.
(Note: Youll have to pay closing costs with this option.)
This bang out of loan offers fixed and adjustable rates and long repayment terms.
Ultimately, the best home improvement loans or funding will depend on your qualifications, needs and availability.
(Per the latter, some institutions have halted greenlighting HELOC loans with the current market in flux.)
(Which well touch on later in the article.)
Wells Fargo
Wells Fargo is a familiar name in the banking world.
Check out The Penny Hoarders overallreview of Wells Fargofor 2022.
Navy Federal has branches all around the world and offers many of the traditional banking products.
Discover
Discover is probably most known for being a credit card brand.
Check out The Penny Hoardersreview of SoFiChecking and Savings for 2022.
Its not the lender; rather, Upstart-powered bank partners handle all unsecured personal loans.
For each lender, its essential that you review the different loan options and terms for more information.
In some cases, you might find out you qualify for a loan in a short period of time.
You might choose to put household expenses on a credit card, for example.
That has its own pros and cons (like the other funding choices) that youll want to consider.
And of course, cash is king, as they say.
The best loan for you depends on many factors.
Many traditional banks, credit unions and financial institutions offer home renovation loans.
Depending on your qualifications and individual needs, the right or best bank for you will vary.
If you prefer a traditional bank with brick-and-mortar locations, Wells Fargo might be your preferred choice.
If youre OK operating entirely online, a lender like SoFi will likely meet your needs.
Once again, file this under: It Depends.
Its a good idea to list out the total amount of money you want to fund your project.
Compare different payment methods (loans, credit cards, home equity lines of credit, etc.)
and see which terms and conditions meet your needs.
She owns a content-writing business and her work has appeared in U.S. News, Clark.com and Well Kept Wallet.
Freelancer Larissa Runkle contributed to this report.
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