Personal Loans for Home Improvement

A personal loan can be used for repairs or renovations to your home.

If you have good credit, you may be able to qualify for a personal loan faster and easier than home equity loans, and you don’t have to use your home as collateral.

These loans also offer many benefits that could be useful when working on one-time projects in your home, such as predictability, convenience, and the ability to finance projects to increase your home’s value. 

How to get a Personal Loan for Home Improvement?

In order to qualify for a personal loan that can be used for home improvement, applicants must meet certain criteria, such as having a minimum annual income and creditworthiness, which will be affected by factors like your credit mix and your debt-to-income ratio. Specific requirements for personal loans will vary from lender to lender.  

Once you’re approved for the loan, you receive the amount you are eligible for as a lump-sum payment, which you will then repay in fixed monthly installments. 

The process of applying for a personal loan for home improvement will also differ from lender to lender. Most lenders will let you apply online or at a branch and will evaluate your application based on factors such as annual income and creditworthiness.

If your lender informs you that your chances of qualifying are low based on your credit score, consider spending some time working to improve your credit.

Benefits of Using a Personal Loan for Home Renovation

Your home could be one of the largest investments you will make, and you may want to make improvements that help increase its resale value. Since personal loans for home renovation are not secured by your home, they may help you achieve these goals without you having to offer the equity in your home as collateral.

Additionally, home improvement loans could be more convenient for you since you’ll receive the money you need in a lump-sum with a faster application process.

Your payments also stay the same for the duration of the loan term, which could make budgeting for repayment more straightforward.

Alternatives to Using a Personal Loan for Home Improvements

You can also consider financing your home improvements using home equity loans, home equity lines of credit, cash-out refinancing, or credit cards. Based on your individual circumstances, one of these may be a suitable option for you.

Cash-out Refinance

Cash-out refinances leverage your home’s equity to secure a new mortgage. This new mortgage repays the original one, and the difference is accessible to you as cash. 

Home Equity Loan & HELOC

Home Equity Loans and Home Equity Lines of Credit (HELOC) are both types of secured loans where the equity in your home acts as collateral. These can also be called second mortgages. The difference is simply that a home equity loan provides a lump-sum payout with fixed interest rates, while a HELOC allows you to borrow continuously over time but may have variable interest rates.

Credit Cards

You can use credit cards to pay for smaller repairs or renovation projects as long as the amount you need to spend is less than your credit limit. You may want to look for a low intro APR credit card that allows you to minimize interest for a limited time.

Credit cards may also offer benefits such as cashback and reward points. However, using a credit card for large-scale home repairs means you will risk incurring interest if you cannot pay off your balance in full by the due date.

When should you consider a Personal Loan for Home Renovations?

Since you get a lump sum payment, it’s best to use personal home renovation loans for one-time projects or necessary repairs. For that same reason, you’ll want to stay away from using a home renovation loan for a project with an unclear cost or timeline.

If the cost of the renovations required is well below the market value of your home, then using a personal loan for home improvements is a practical choice, but it’s important to be realistic about valuations. Not every upgrade necessarily equates to a better listing price.

Consider a couple common home renovation projects and whether they will add value to your home before taking out a personal loan to finance them.

Kitchen remodeling

Kitchens can be a major selling point for homes, so undertaking a limited remodeling project can be worthwhile. Outdated appliances, cabinets or tile countertops can be swapped for more up-to-date alternatives.


Landscaping gives your home some instant curb appeal. Trees, in particular, are highly sought after and can add to your home’s value.

Other features like a fire pit, irrigation system, outdoor lights, a neat lawn, or even a water feature can be great additions. Considering the added value, landscaping projects could be a good fit for a personal loan.

Is a Personal Loan the right choice for your Home Improvements?

A personal loan for home improvement may be the best choice for you if the work needed is well-planned and not too large in scale. If you know the cost of your project, you can take out a personal loan for home improvement that directly matches those expenses without having to resort to alternatives.

You should also consider your ability to repay the loan. Since defaulting can hurt both your credit score and your ability to borrow in the future, it's advisable to borrow only if you know you can repay. 

Personal Loans for Home Improvement: Frequently Asked Questions

What are the term lengths of Personal Loans for Home Improvement?

The loan term defines how long you have to repay the loan. Depending on the financial institution, terms length can vary, and you can choose the loan term that makes the most sense for your situation.

For home improvement projects, keep your overall spending low since you want your expenditure to be proportional to the value added to your home. 

How much can you borrow with a Personal Loan for Home Improvement?

The maximum personal loan available to you for home improvements depends on factors like your income, existing debt and creditworthiness. Financial institutions offer loan amounts ranging from $2,000 to $100,000. You can apply online and depending on the financial institution receive funds the same day your application is approved. 

Disclaimer: Citi offers personal loans to both existing Citi customers and new Citi customers that meet specific eligibility criteria, including an established credit and income history along with additional factors determined by Citi. If you think you could benefit from a Citi Personal Loan, apply online today.

Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.

©2023 Citibank, N.A. NMLS# 412915. Member FDIC and Equal Housing Lender. Citi, Citi and Arc Design and other marks used herein are service marks of Citigroup Inc. or its affiliates, used and registered throughout the world.

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