CNBC's top home improvement loans for 2024.

Home renovations can be costly, with the average American spending over $20,000 on a single project in 2023. Due to the high expenses, many homeowners opt for home improvement loans to finance these projects.

A personal loan is used by homeowners to cover renovation expenses. To assist homeowners in making the most of their renovation projects in 2024, CNBC Select has compiled this year's top home improvement loans based on various factors, including interest rates, fees, loan terms, and other features such as how funds are distributed, autopay discounts, and customer service. (Learn more about our methodology below.)

Best for borrowing larger amounts

Who is LightStream for? LightStream is an online lender that provides low-interest loans with flexible repayment options for individuals with good credit or higher. The lender does not charge any origination fees, administration fees, or early payoff fees. LightStream offers loans with some of the highest borrowing amounts ranging from $5,000 to $100,000, making it an ideal choice for those borrowing larger sums of money.

LightStream provides the longest repayment term among the lenders on this list, resulting in lower monthly payments and less financial stress. However, this also means that you will accumulate more interest charges over time.

Best for borrowing smaller amounts

Who is PenFed for? PenFed is a federal credit union that anyone can join. Although you don't need to be a member to apply for a loan, you will need to sign up for a PenFed membership and keep $5 in a qualifying savings account to receive your funds. PenFed offers loans of as little as $600, making it ideal for those who may not necessarily need a massive home improvement undertaking but need a little extra cash for a smaller fix.

PenFed offers a paper check as its primary funding method. If you are close to a PenFed branch, you can pick up your check in person. However, with a personal loan, you can choose to have the funds deposited into your PenFed savings or checking account or transferred to you via ACH transfer, as per the lender's website.

Best for lower credit scores

If you're concerned about your low credit score preventing you from obtaining loans for home improvements, Upstart offers a solution. Upstart is an AI lending platform that collaborates with banks and credit unions to provide personal loans and other lending products. It is particularly suitable for individuals with a low credit score or no credit history, as it takes into account factors such as education, employment, credit history, and work experience.

Upstart offers borrowers the option to apply for as little as $1,000, making it a strong contender for those who need to borrow a small amount of money. Prospective borrowers can check their interest rate before applying with a soft credit inquiry.

Best for long repayment terms

What is SoFi known for? SoFi is an online lender that provides competitive interest rates and flexible loan terms. It offers repayment terms that are longer compared to those of most other lenders: Borrowers have 24 to 84 months to pay back the loan. This can be ideal for borrowers who prefer smaller monthly payments over a longer repayment term.

SoFi offers personal loans of up to $100,000, making it an excellent option for those with expensive, high-impact home renovation projects. Unlike many personal loans, SoFi allows borrowers to choose between a fixed and variable APR.

Best for fast funding

Who is Discover® for? Discover® is a well-known lender that is known for its fast funding. Its personal loans are perfect for those who need money in a hurry for an emergency home renovation project. Borrowers can receive their funds as early as the next business day. However, to get your funds quickly, you must submit a complete and error-free application, and the loan must be funded on a weekday.

Standout benefits of Discover's personal loans include no origination fee and no prepayment penalty, allowing borrowers to save on interest and pay off their loans sooner.

Best from a big bank

For whom is this? Citi® is one of the largest brick-and-mortar banks in the country with thousands of branches you can visit. Existing Citi® deposit account customers can receive their loan funding as quickly as the same business day since the funds can be deposited directly into their accounts. This enables you to start your home improvement project as soon as possible. If you don't have an existing Citi deposit account, it can take up to two business days to receive the funds.

Citi provides a more substantial discount of 0.50% for borrowers who opt for autopay, compared to the typical 0.25% interest rate reduction offered by other lenders. Additionally, Citi does not charge origination, early payoff, or late fees.

What are some common personal loan definitions I should know?

Here are some common personal loan terms you need to know before applying.

• Co-applicants or joint applications: A co-applicant is someone who helps you qualify for a loan by attaching their name and financial details to your application. They can be a co-signer or a co-borrower. Having a co-applicant can be beneficial when your credit score is low or if you're a young borrower with limited credit history. If your co-applicant has a good credit score, you may be offered better loan terms, such as a lower APR and a larger loan amount. However, both applicants' credit scores will be affected if the loan is not paid back on time, so it's important to choose a co-applicant with whom you feel comfortable sharing financial responsibility.
• If a co-signer agrees to help you qualify for a loan, they are only responsible for making payments if you are unable to. The co-signer does not receive the loan, nor do they necessarily make decisions about how it is used. However, the co-signer's credit will be negatively affected if the main borrower misses payments or defaults.
• Unlike a co-signer, a co-borrower is responsible for repaying the loan and has a say in how it is used. Co-borrowers are typically involved in decisions about how the loan is spent. Some lenders only accept two co-borrowers who live at the same address, as this suggests that they are jointly responsible for managing their finances. If either co-borrower fails to make payments or defaults, both of their credit scores will be negatively impacted.
• Lenders may offer direct payments when you choose debt consolidation as the reason for obtaining a personal loan. Through direct payments, the lender will pay your creditors and then deposit any remaining funds into your checking or savings account. It is recommended to continue making payments until your account balance is fully paid off to avoid additional late fees and interest charges.
• Before accepting a loan, be aware of the possibility of an early payoff penalty. Lenders may charge a fee if you pay off your debt early, which could be equal to the remaining interest, a percentage of your payoff balance, or a flat rate.
• An origination fee is a one-time charge that your lender deducts from your loan to cover administrative and processing expenses. It typically ranges from 1% to 5%, but can sometimes be a flat-rate fee. For instance, if you borrowed $20,000 and paid a 5% origination fee, you would receive $19,000 when you received your funds. Your lender would keep $1,000 of the loan amount, and you would still need to repay the full $20,000 plus interest. It's best to avoid origination fees if possible. Having a good to excellent credit score can help you qualify for loans that don't have origination or administrative fees.
• Secured versus unsecured loans: While most personal loans are unsecured, you can use collateral to secure a loan if your credit score is poor and you struggle to qualify for the best loans. By putting an asset up as collateral, you give your lender the right to repossess it if you fail to repay your debts on time and in full.

Why trust CNBC Select?

Our mission at CNBC Select is to deliver top-notch service journalism and in-depth consumer advice to our readers, enabling them to make well-informed decisions when it comes to their finances. Each personal loan review we publish is the result of thorough reporting by our team of expert writers and editors, who possess extensive knowledge of loan products. At CNBC Select, we maintain the highest journalistic standards and ethics, and we earn a commission from affiliate partners on many offers and links. However, our content is created independently by our team, without any input from our commercial team or external third parties. To learn more about our methodology and how we select the best home improvement loans, please refer to our detailed guide.

Our methodology

In 2024, CNBC Select evaluated numerous U.S. personal loans from both online and physical banks, including credit unions, that do not charge origination or signup fees, have fixed-rate APRs, and offer flexible loan amounts and terms to accommodate a range of financing requirements.

We prioritized the following features when evaluating and ranking personal loans.

• No upfront fee for loan processing: Our top lenders do not charge borrowers for loan processing.
• A fixed rate APR ensures that your monthly payment remains constant, making it easier to plan your budget. However, variable rates may fluctuate over the course of your loan.
• Each lender offers a range of financing options that you can tailor to your monthly budget and repayment timeline.
• Our list of lenders does not charge borrowers for paying off loans early.
• We evaluated lenders' same-day approval decisions and fast online application processes for a streamlined application process.
• Our customer support team offers customer service via telephone, email, or secure online messaging for every loan on our list. Additionally, we have chosen lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
• Disbursement of funds: Our loans provide prompt payment through electronic wire transfer or paper checks. Some lenders allow direct payment to creditors.
• Autopay discounts: We observed that certain lenders offer incentives for enrolling in autopay, which can result in a reduction of your APR by 0.25% to 0.5%.
• Loan sizes and payment limits: The lenders offer loans ranging from $500 to $100,000. Each lender specifies its payment limits and loan sizes, and a preapproval process can help you determine your interest rate and monthly payment for a specific amount.

We ranked our recommendations for overall financing needs, debt consolidation and refinancing, small loans, and next-day funding based on their suitability.

The interest rate and monthly payment for personal loans may change based on the Fed rate, but once you agree to the loan agreement, a fixed-rate APR will ensure consistency throughout the loan term. Your APR, monthly payment, and loan amount are determined by your credit history and creditworthiness. To obtain a loan, lenders will perform a hard credit inquiry and require a full application, which may include proof of income, identity verification, proof of address, and more.

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