CNBC's best home-improvement loans of 2024

Whether you're considering a simple paint job or a gut renovation, home improvements can be expensive. Rocket Mortgage found that, on average, Americans spent over $20,000 on a single home improvement project in 2023. As a result, many homeowners turn to home improvement loans to finance these costly projects.

A home improvement loan is a personal loan used to cover renovation expenses. To help homeowners make the most of their renovation projects in 2024, CNBC Select rounded up this year's best home improvement loans based on factors like interest rates, fees, loan terms, plus other features including how funds are distributed, autopay discounts and customer service. (Read more about our methodology below.)

Who's this for? LightStream is an online lender that offers low-interest loans with flexible terms for people with good credit or higher. It does not charge any origination fees, administration fees or early payoff fees. This lender offers loans with some of the highest borrowing amounts ranging from $5,000 to $100,000, making it ideal for those borrowing larger amounts.

Standout benefits: LightStream offers the longest-term option among the lenders on this list, which typically means lower monthly payments and less pressure when repaying debt. On the flip side, a longer term also means you'll accrue more interest charges over the long run.

Who's this for? PenFed is a federal credit union that anyone can join. While 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. It 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.

Standout benefits: PenFed primarily provides its funds in the form of a paper check. If you live near a PenFed location, you can pick up your check directly from the bank. With a personal loan, though, you also have the option to have funds deposited into your PenFed savings or checking account or transferred to you via ACH transfer, according to the lender's website.

Who's this for? If you need to make home improvements but worry that a low credit score would disqualify you from many loans, the good news is that Upstart offers you an option for funding. Upstart is an AI lending platform that partners with banks and credit unions to offer personal loans and other lending products. It is ideal for individuals with a low credit score or even no credit history because it considers factors like education, employment, credit history and work experience.

Standout benefits: Borrowers can apply for as little as $1,000, making Upstart another fairly strong contender for those who may only need to borrow a small amount of money. Prospective borrowers can check their interest rate before applying with a soft credit inquiry.

Who's this for? SoFi is an online lender known for 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 favor smaller monthly payments over a longer repayment term.

Standout benefits: SoFi offers personal loan amounts up to $100,000, making it ideal for those who have more costly, higher-lift home improvement projects to take on. Many personal loans come with a fixed interest rate, but SoFi allows borrowers to choose between a fixed and variable APR.

Who's this for? Discover® is a big-name lender that stands out for its fast funding. Its personal loans are ideal for those who need funding in a pinch for a home renovation that's more of an emergency since borrowers can receive their funds as early as the next business day. Of course, to get your funds quickly, you must submit an application that is complete and doesn't contain errors (you'll also want to make sure the loan is funded on a weekday).

Standout benefits: Discover® doesn't charge an origination fee for its personal loans. This lender also doesn't charge a prepayment penalty, so borrowers can make extra payments each month to save on interest over the life of the loan and pay it off sooner.

Who's this for? Citi® is one of the nation's largest brick-and-mortar banks 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 allows 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.

Standout benefits: Citi offers a 0.50% rate reduction for borrowers who enroll in autopay. This is a fairly generous discount since many other lenders only offer a 0.25% interest rate reduction for enrolling in autopay. It also doesn't charge origination, early payoff or late fees.

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

• Co-applicants or joint applications: A co-applicant is a broad term for another person who helps you qualify by attaching their name (and financial details) to your application. A co-applicant can be a co-signer or a co-borrower. Having a co-applicant can be helpful when your credit score isn't so great, or if you're a young borrower who doesn't have much credit history. If your co-applicant has a good credit score, you might be offered better terms, including qualifying for a lower APR and/or a bigger loan. At the same time, both applicants' credit scores will be affected if you don't pay back your loan, so be sure that your co-applicant is someone you feel comfortable sharing financial responsibility with. 
• Co-signers: A co-signer agrees to help you qualify for the loan, but 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-signers credit will be negatively affected if the main borrower misses payments or defaults.
• Co-borrower: Unlike a co-signer, a co-borrower is responsible for paying back the loan and deciding how it is used. Co-borrowers are usually involved in decisions about how the loan is used. Some lenders will only consider two co-borrowers who share a home or business address, as this is a firm indicator that they are sharing the responsibility of money in mutually beneficial ways. Both co-borrowers' credit scores are on the hook if either one stops making payments or defaults.
• Direct payments: Some lenders offer direct payments when you select debt consolidation as the reason for taking out a personal loan. With direct payments, the lender pays your creditors directly, and then deposits any leftover funds into your checking or savings account. Until you see your account balance is fully paid off, it's best to keep making payments so that you don't get hit with additional late fees and interest charges.
• Early payoff penalty: Before you accept a loan, look to see if the lender charges an early payoff or prepayment penalty. Because lenders expect to get paid interest for the full term of your loan, they could charge you a fee if you make extra payments to pay your debt down quicker. The fees could equal either the remaining interest you would have owed, a percentage of your payoff balance or a flat rate.
• Origination fee: An origination fee is a one-time upfront charge that your lender subtracts from your loan to pay for administration and processing costs. It is usually between 1% and 5%, but sometimes it is charged as a flat-rate fee. For example, if you took out a loan for $20,000 and there was a 5% origination fee, you would only receive $19,000 when you got your funds. Your lender would get $1,000 of the loan off the top, and you'd still have to pay back the full $20,000 plus interest. It's best to avoid origination fees if possible. Having a good to excellent credit score helps you qualify for loans that don't have origination or administration fees. 
• Unsecured versus secured loans: Most personal loans are unsecured, meaning they are not tied to collateral. However, if your credit score is less-than-stellar and you're finding it hard to qualify for the best loans, you can sometimes use a car, house or other assets to act as collateral in case you default on your payments. When you put an asset up as collateral, you are giving your lender permission to repossess it if you don't pay back your debts on time and in full.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal loan review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best home improvement loans.

To determine which personal loans are the best for home improvements in 2024, CNBC Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions, that come with no origination or signup fees, fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.

When narrowing down and ranking the best personal loans, we focused on the following features:

• No origination or signup fee: None of the lenders on our best-of list charge borrowers an upfront fee for processing your loan.
• Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan's term, which means your monthly payment won't vary, making your budget easier to plan.
• Flexible minimum and maximum loan amounts/terms: Each lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
• No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
• Streamlined application process: We considered whether lenders offered same-day approval decisions and a fast online application process. 
• Customer support: Every loan on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
• Fund disbursement: The loans on our list deliver funds promptly through either electronic wire transfer to your checking account or in the form of a paper check. Some lenders (which we noted) offer the ability to pay your creditors directly.
• Autopay discounts: We noted the lenders that reward you for enrolling in autopay by lowering your APR by 0.25% to 0.5%.
• Creditor payment limits and loan sizes: The above lenders provide loans in an array of sizes, from $500 to $100,000. Each lender advertises its respective payment limits and loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be for such an amount.

After reviewing the above features, we sorted our recommendations by best for overall financing needs, debt consolidation and refinancing, small loans and next-day funding.

Note that the rates and fee structures advertised for personal loans are subject to fluctuate per the Fed rate. However, once you accept your loan agreement, a fixed-rate APR will guarantee interest rate and monthly payment will remain consistent throughout the entire term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To take out a loan, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more. 

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