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Best Home Renovation Loans

Can you borrow money to make home renovations? Yes, you can borrow money for home renovations… and it’s probably much easier to qualify than you think! Keep reading to learn everything you need to know about borrowing money for home renovations.

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How to finance a home renovation:

One of the easiest and fastest ways to borrow money for home renovation is using a personal loan. You can secure a personal loan through a bank, credit union, or online lender. Online lenders offer competitive rates and may be easier to qualify for. Acorn Finance is a top-rated online platform that can help all credit types qualify for a personal loan.

What are my options for borrowing money for home renovations?

Two of the most popular options for borrowing money for home renovations are secured and unsecured loans. Unsecured loans (also known as personal loans) can be less risky and easier to qualify for. In most cases, unsecured loans do not require collateral, money down, or equity in your home. If you use a secured loan such as a home equity loan, you will borrow against the equity in your home and use it as collateral. To qualify for a secured loan you will most likely need good credit and plenty of equity in your home. If you default on payment or the market changes drastically, you may risk losing your home. In addition, secured loans can have a longer approval and funding process.

Should I consider a home renovation loan?

Yes, you should consider a home renovation loan. Making home renovations or improvements can increase home value while creating a more functional living space. Some of the top home renovation projects that can have the highest return on investment include kitchen remodels, garage door replacement, siding replacement, landscaping, and window replacement.

Where to borrow money for home renovations?

If you are looking for an unsecured home renovation loan you should go to www.acornfinance.com. Acorn Finance partners with reliable lenders that offer home renovation loans up to $100,000 with interest rates starting at just 6.99%. In addition, their lender partners offer flexible repayment terms up to 12 years. Acorn Finance offers a secure platform that allows you to compare multiple personalized home renovation loan offers without affecting your credit score. To get started, submit an application online. Within seconds of submitting the application, you can receive multiple personalized home renovation loan offers with seconds. Acorn Finance partners with lenders that can assist all credit types. If you have good credit you may be able to qualify for a home renovation loan with a bank or credit union. However, online lenders usually offer very competitive rates and terms. Compared to banks and credit unions, online lenders usually have a much faster approval and funding process.

When should you borrow money for home renovations?

If you want to make home renovations but are short on cash on hand you should absolutely look into a home renovation loan. Even if you have the cash on hand, a home renovation loan may still make sense. If you can qualify for a low-interest rate, keeping your cash on hand and using a home renovation loan may have more financial value. Home renovation loans can also be useful in the event of an emergency repair.

What should I consider when borrowing money for home renovations?

When borrowing money for home renovation you should consider...

#1. How much will the renovations cost?
Before applying for a home renovation loan you may want to get an estimate for what the improvements should cost. This way you can apply for the appropriate amount.

#2. What kind of monthly payment can I afford?
Determining your monthly budget for repayment can help you select the most suitable loan terms. You can use loan payment calculators to help you estimate monthly payments.

#3. How much can I qualify for?
To figure out how much you qualify for without affecting your credit, you should apply online through Acorn Finance.

See also: Home Improvement Financing



How To Finance Major Home Improvements

Financing may offer an affordable solution to make your home renovation or repair to do list more manageable. So how do you finance home renovations or repairs? Keep reading to find out the easiest and best options for financing major home renovations or repairs. We will cover different home renovation financing options. home repairs and costs, how to get a home renovation loan if you have bad credit, and so much more.

What are common home repairs and their costs?

In most cases, home repairs cannot be fixed with a bandaid. Most home renovations or repairs require extensive labor and materials, which adds up quickly. Let's take a look at some of the most common home repairs and what they cost...

#1. Foundation repair

Foundation damage can occur from a variety of factors including shifting, weather, or expanding and contracting soil. If you have foundation problems you should repair them as soon as possible. Neglecting or ignoring foundation problems can lead to even more expensive repairs and severe damages. In some cases, foundation damage is not obvious for quite some time. However, there may be signs of damage such as doors sticking or not closing properly, sagging or uneven floors, counters and cabinets separating from the wall, and gaps around exterior doors or window frames. There are many different types of foundation problems including...

Foundation cracks, wall cracks, or fractures

Foundation settling or sinking

Foundation upheaval

Homeowners report paying an average of about $4,000 for foundation repairs. If you have major structural repairs it may cost $10,000 or more. If you need minor patching of small cracks it may only cost you about $500 or so.

#2. Electrical issues

While some home repairs can be done DIY style, electrical repairs are usually best suited for professionals. In most cases, electrical repairs are pricey. While basic electrical repairs may only cost a few hundred dollars, major electrical repairs can cost $15,000+.

#3. Roof repair

Next to a solid foundation, a functional roof is very important. If you are noticing leaks or missing shingles you may need roof repair. Similar to foundation problems, it's important to address and fix roof problems immediately. Roof repairs can range from $650 to $10,000 and up. Installing a new roof can help increase your home value significantly.

#4. Water heater

Water heater repair or replacement is one of the more affordable home repairs on our list. In most cases, water heaters do not last forever. This means at some point they will require replacement or repair. Water heater repairs can cost about $500 while water heater replacement can cost about $1,000.

#5. Water damage

The cost of water damage can vary significantly. In some cases, water damage repair is minimal while in other cases it can cause major damage. In most cases, water damage costs at least a few thousand dollars or more.

Why Acorn Finance for Home Repair Loans?

Acorn Finance puts you in control of your financial future – we let you compare personalized offers from lenders in our network, with no impact to your credit score. That means multiple loan offers for your home renovation projects in seconds. We'll help you check for pre-qualified home renovation loans in seconds with our broad network of national lending partners. You can easily sort the offers based on what's most important to you: interest rate, payment amount, length of the loan term. Our 100% online, customer-friendly process is designed to help you find affordable payment options with lenders that can quickly finance your renovation project.

How to finance major home renovations

When it comes to financing major home renovations you should look into a personal loan or a home equity loan. However, home equity loans may be riskier and do not work for everyone. In the next section, we will explain personal loans and home equity loans in more detail.

What are my options for financing a home renovation?

#1. Personal Loan

Using a personal loan through Acorn Finance is usually the best option for financing home renovation. Personal loans do not require collateral and have a fixed interest rate, making them a less risky option compared to home equity loans.

Acorn Finance can connect you to multiple top-rated lenders that offer personal loans for all credit types. Although you can shop online to see what different banks and lenders offer, you do not know what they will offer you until you apply.

Applying to multiple lenders can affect your credit score. However, applying through Acorn Finance should not affect your credit. You can submit one application and receive multiple personalized personal loan offers within seconds.

Acorn Finance offers personal loans up to $100,000 with rates starting at 6.99% and terms up to 7 years. You can use the funds for all of your home renovation or repair needs.

#2. Home Equity Loan

Home equity loans may have lower interest rates than personal loans but they can be harder to qualify for. In order to qualify for a home equity loan, you should have a decent amount of equity in your home. When you use a home equity loan you are essentially borrowing against your home. Using your home as collateral can make the loan less risky for the lender but riskier for the homeowner. In addition, home equity loans can have a longer approval process. However, in some cases, a home equity loan may be a good option for financing home renovation.

How to finance home renovation without equity

If you do not have equity in your home you should use a personal loan to finance a home renovation, improvement, or repair. Personal loans do not require collateral or down payments making them an easy financing solution for home renovation.

Is it hard to get a home renovation loan?

Getting a personal loan for home renovation through Acorn Finance is easy and fast. If you choose another option it may take more time and cause more headaches.

What credit score is needed to get a home renovation loan?

Acorn Finance offers home renovation loans for all credit types. Most lenders evaluate borrowers based on credit score, income, debt-to-income ratio, age of credit, and more. Therefore, even if they have a minimum credit score requirement you may still qualify. Most lenders like to see a credit score of 580 or higher.

Can you get a home renovation loan with bad credit?

If you have bad credit, you can still qualify for a personal loan. If you can add a cosigner with good credit to your application it can increase your chance of approval and help you lock in a lower rate.

What kind of loan is best for home renovations?

In most cases, a personal loan is the best and easiest option for financing home renovations. However, each homeowner has their own situation so you should explore all options to determine which is best for you. Other options can include a home equity line of credit, home equity loan, mortgage refinance, or credit cards.

Home equity lines of credit and home equity loans can involve more risk and be more complicated than personal loans. If you use a home equity loan you should have a fixed interest rate, similar to personal loans.

Home equity loans and home equity lines of credit are not the same thing. Home equity loans allow borrowers to borrow in a lump sum and make fixed monthly payments. Home equity lines of credit are similar to a credit card.

Borrowers receive a maximum amount available and are able to borrow money multiple times as long as they do not exceed the maximum amount. Refinancing your mortgage can make sense in some situations. You should consult a professional to determine if refinancing is a good option.

Out of all the options, credit cards will most likely have the highest interest rates.

What are the costs and fees involved with a renovation loan?

If you are using a personal loan for home renovation you may have interest charges, origination fee, late payment fees, and in some cases early payoff penalties. It's important to compare offers rates and terms. Most lenders have origination fees of about 2%-3%. If you have excellent credit you may qualify for a lender that does not charge an origination fee. Most lenders do not have early payoff penalties. It's important to read the terms before signing into the loan.

How do you renovate a house with no money?

Renovating a home with literally no money is impossible. If you are living in an unsafe home that needs renovations that you are unable to afford, you may want to contact local charities. In some cases you may be able to secure some type of funding to help fund home improvements. Your local Housing and Urban Development (HUD) may be able to notify you of local grants in your area. In addition the National residential Improvement Association may be able to assist.

Home improvement grants are designed to remove health and safety hazards that might be present in your family home. If you decide to go this route, be prepared to meet strict criteria. If you are over the age of 62 years old, you may qualify for a grant with the Rural Development arm of the U.S. Department of Agriculture (USDA). Some of the basic criteria you will need to meet includes owning and occupying the home, must meet income requirements, and must be unable to qualify for affordable credit. If you do qualify for a USDA award, you can receive a lifetime award up to $7,500. The funds can only be used for hazardous repairs, not cosmetic repairs.

Low income individuals may also be able to access assistance through the HOME Investment Partnership Program. HOME is a division of HUD. If you need weather or emergency repairs, you may want to contact HOME. The USDA and HUD can also help lower-income homeowners make home repairs by providing affordable loans.

While you may be able to make temporary repairs that cost little to no money, you will need money to renovate your home or make home repairs. Even if you can do most of the work yourself, you'll still need the right materials and equipment, which can cost money.

Can you borrow money for renovations?

Yes, you can borrow money for renovations. In fact, you can secure financing for just about any kind of renovation. Whether you want to install a pool and landscape your yard or build a sunroom, you can borrow money. You can also borrow money to make necessary repairs such as replacing an HVAC system or treating termites. Before you jump to securing a loan for renovations, you should determine what renovations will cost and how much you need to borrow. In some cases, you may only need to borrow a portion of the project cost. In other cases, you may need to borrow the full amount. It may be a good idea to borrow a little more than you think you need in the event you encounter some surprises.

If you are purchasing a home that needs renovations completed before you move in, you may be able to use a Fannie Mae HomeStyle renovation loan. This is a non-government loan that allows homebuyers to use one loan for the purchase and renovations. Lenders can use the expected property value to determine how much they can loan. If you want to use a Fannie Mae HomeStyle renovation loan you will need to find a private bank or mortgage companies that can offer them.

If you already live in the home that needs renovations, you may want to consider a secured loan such as a home equity loan or line of credit. However, you will need to have equity in your home to qualify for these options. In addition, you will need to borrow against the equity in your home.

For home renovations less than $100,000, you may want to consider an unsecured personal loan. Whether you live in the home or are purchasing the home, you can secure a personal loan to pay for home improvements. Unsecured personal loans do not require collateral making, equity, or money down.

Can you borrow against your home for renovations?

If you have equity in your home, you can borrow against your home or use it as collateral. This can actually be a smart way to finance home renovations. If you borrow against your home equity you are most likely using a secured loan such as a home equity loan or line of credit. Secured loans can offer low interest rates and long repayment terms, which can make home renovation financing more affordable. However, before committing to a secured loan you should consider the risks as well. If you default on a secured loan, the lender can repossess your home. Afterall, that was the point of offering it as collateral. When lenders have collateral, such as real estate, their risk is reduced. If you default on the loan, they can take ownership of the collateral. In exchange, the bank may offer a lower interest rate or longer repayment term. Whether you pay the loan off on time or default, they have a chance to financially gain.

If you are confident that you can repay the secured loan, it can be a cost-effective way to finance home renovations. However, if you are barely covering your mortgage as it is, you should think twice before borrowing even more money. To qualify for a home equity loan you will need to have equity in your home, plenty of income, and a reasonable debt-to-income ratio. Most lenders require that homeowners have at least 15% equity in their home. Some may assume that you can qualify for a home equity loan with bad credit since you are proving collateral but this is not always the case. You should have a credit score 620 or higher to qualify for a home equity loan.

What is the cheapest way to borrow money for home improvements?

The cheapest way to borrow money for home improvements can vary. If you can pay cash for home improvements, this is ultimately the cheapest route. When you get into financing you usually run into interest and other fees that cause the cost of renovations to increase. In some cases, you may be able to purchase materials such as flooring from a retailer that offers promotional financing. In some cases, a retailer may offer 0% financing for a short term. If you can cover the monthly payment and pay of the loan before the promotional period ends, this can be a cost effective way to finance some or all of your project costs. However, since promotional financing is usually only offered for short terms, the monthly payments may be out of your budget.

The cheapest way to borrow money can vary depending on the situation. As a homeowner, you should compare financing offers to determine which offer makes the most financial sense. While you may get one offer and be able to cover the money payment, you should always compare loan offers before accepting one.

Can you get a home renovation loan with bad credit?

You can get a home renovation loan with bad credit, but it's important that your expectations are realistic. If you are looking to borrow thousands of dollars with a single digit interest rate, you may be setting yourself up for failure. Even lenders that work with bad credit borrowers will usually charge high interest rates. Your best option is to rebuild your credit and pursue a home improvement loan at a later date. However, if you feel that you can't wait, you should compare offers. You may also want to consider different types of loans such as secured loans or FHA loans. If you have a willing cosigner with good credit this can also help increase your chance of approval. It can also help you qualify for a lower interest rate.

Can you get a home renovation loan with bad credit and no equity?

If you don't have any equity in your home, you won't be able to get a home equity loan to pay for your home renovations. You might be able to still get a personal loan though. If your credit is fair or bad, you might need to get a secured personal loan or a cosigner to get better interest rates that are more affordable. Overall, regardless of the type of loan, borrowing money with bad credit should be avoided. You should address why your credit is bad and work on rebuilding credit before applying for a loan. If you have already done this, you may need to borrow small amounts of money again to start rebuilding your credit score. If this is the case you should consider using a personal loan.

Is getting a home renovation loan with bad credit impossible?

Getting a home renovation loan with bad credit is not impossible, but it may be harder than for someone who has good or excellent credit. You might need to spend more time shopping around for lenders and finding companies who are willing to work with you.

You might also need to look at fair credit borrowers and see if they are more willing to help. You also might not be able to qualify for a loan of the amount you need, but rather a smaller amount that the lender considers less risky. You might also have high interest.

Can you finance home renovation with a personal loan?

Yes. Homeowners often use unsecured personal loans as a way to finance home improvements or home renovations. Personal loans are often called home improvement loans. Home improvement loans can be used without providing collateral, which is attractive to some borrowers. If you don't have equity in your home a personal loan may be one of your only financing options. However, there are many homeowners that just prefer not to use their home as collateral. In addition, the process is much simpler for an unsecured loan. If you have good to excellent credit, you should be able to get a low-interest loan with competitive repayment terms.

Can you get a home renovation loan with a 600-credit score?

It is possible to get a home renovation loan with a 600-credit score. Lenders might even be more willing to give you a loan if you have a high income or a low debt-to-income ratio. Each lender is different, so it is worth it to shop around for lenders before choosing one.

Fair credit lenders will also work with people who have a credit score of 600 or less. They might offer high-interest loans though. Always compare rates and fees when looking at lenders.

What lenders provide home renovation financing for bad credit?

Some lenders may specialize in helping borrowers with bad credit. If you have bad credit you will want to find one of these lenders. However, just because they can approve your loan does not mean they are willing to take the risk for free. If you have bad credit there is really no way around the fact that you will probably have to pay high interest rates. If you need an emergency home repair you may have no other choice but to borrow the money.

While every lender is different, here are some lenders that are known for giving personal loans to people with bad credit:




Universal Credit



You can also check with your bank or credit unions to see if they have options for lending to people with bad credit.

How to finance home renovations with bad credit?

If you have bad credit and you want to finance home renovations, you can consider getting a home equity loan. Usually, these loans are given out to people who have substantial equity built up in their homes. A good to excellent credit score is usually not required in many cases. However, you will need to have high equity in your home before applying.

You can also try to qualify for loans offered by online lenders or credit unions. An FHA loan may also be an option. Try to find a lender that looks at more than just your credit score when it comes to borrowing. If you have a high income or a low debt-to-income ratio, you might be able to get a loan based on those factors instead.

While there are ways to get financing with bad credit, you should address your credit score at some point. It may feel impossible to get away from a bad credit score but just know it is possible. While you may need to borrow money and establish better credit to boost your credit score, you may have to pay a premium to borrow the money. If you are using the funds to make home improvements at least you are increasing the value of an asset.

What is considered bad credit when looking for home renovation financing?

The first thing lenders will probably look at when they are considering giving you a loan is your credit score. Some lenders will only look at your credit score to determine whether they will give you a loan or not. You'll want to ensure you have the credit score that's needed before applying to a lender for a loan.

Poor or bad credit is considered less than 580. However, just because you have a higher score than 580 does not mean you will get the loan you are applying for. Most lenders require you at least to be in the fair range, which is between 580-669. Even more so, lenders will want to see a score of at least 640.

This is considered a below-average score, but on the end closer to the "good" range when it comes to credit. Having a score of 640 means you are less risky as a borrower and lenders will be more willing to lend funding to you. If you are wondering what your credit score is, you might want to check with an online resource before you begin applying for a loan.


If you are looking for a home renovation loan you should take advantage of Acorn Finance. Home renovation loans can be a wise investment that can increase your home value or provide a more functional living space for your family. Acorn Finance offers a secure platform that allows you to compare personalized personal loan offers without affecting your credit.

Take advantage of low-interest rate home renovation loans... apply online today!

Visit Acorn Finance to learn more, or check offers directly below!

Is borrowing money for a home renovation right for me?

Now that you have more knowledge on home improvement loans, it's time to determine if borrowing money for a home renovation is right for you. In most cases, home renovation loans make sense. However, if your debt to income ratio is off, you may want to pay down some debt before taking a home renovation loan.

If you are a homeowner looking to borrow money for home renovations you should use Acorn Finance. Acorn Finance can help you avoid unreliable online lenders while saving you tons of time and money. Their platform is designed to help homeowners find the best offer for home renovation financing. Even if you are just playing with the idea of making home renovations, you can apply online with Acorn Finance without affecting your credit score. Seeing what you can qualify for can help you decide if a home renovation loan is right for you.

Can you add renovation costs to a mortgage?

You can definitely add renovation costs to a mortgage but there are things to consider.

First, you have to qualify. Qualifications are based on a number of factors including:

Your credit score-usually a minimum of 620 is needed

The value of your home

How much equity you have in your home

What your home will be worth when the renovations are complete

Income to support the loan

There are a number of ways to fund renovations with a mortgage as we will see. Financing home renovations can be a complicated process and many people don't know how to finance home renovations. Some of the advantages of adding renovation costs to your mortgage is that if you are borrowing a large amount you can spread the payments over many years. This will help keep your monthly payment lower than if you had to pay back the same amount of money in a shorter time period. You may also get a lower rate than with an unsecured loan. Since the lender is using your house as security, mortgage rates are normally lower than personal loan rates. You need to remember though, that if you are paying it off over a longer period of time you could pay more in interest costs.

Some disadvantages of adding renovation costs to your mortgage is that it may be difficult to qualify for, depending on the lender. Sometimes the borrower qualifications can be strict. They can also be a paper nightmare. Not only do you normally have to provide the normal documentation to qualify for a mortgage, you may need to provide blueprints, cost estimates from the contractor, or building plans. If the mortgage is based on the value of the home after renovations, the money is usually only released as the work is completed. The disbursement of funds is typically managed by a construction specialist. As you can imagine, this can be an expensive process involving a lot of fees that you will have to pay for. The lender may add them to your loan but you still have to pay them.

How do you fund a renovation?

Sometimes the best way to finance home renovations (and the easiest way) is to pay cash. Most people, though, don't have the necessary funds for major home improvements. Even small projects can cost a lot of money so people may look at borrowing as an option. The least complicated options for borrowing include unsecured credit products like a personal loan or personal line of credit.

At Acorn Finance, you can check unsecured home improvement loan offers within 60 seconds or less with no impact on your credit score.

You can also get a mortgage for home improvements. There are a few options that you can explore. One option is a government backed mortgage (Fannie Mae). to qualify, you'll need a credit score of at least 620. Construction plans will be required and the homeowner will need at least 10% of the appraised costs in cash to cover any cost overruns. The money is distributed as work is completed and disbursements are managed by a construction specialist. The maximum loan amount is 75% of the appraised value of the home after construction is complete.

Another option is FHA 203k Rehab mortgages. The minimum amount is $5,000 and the work needs to be completed within 6 months. The borrower needs a credit score of at least 620 and has to have a minimum of 3.5% equity in the home. Like the Fannie Mae mortgage, the funds are managed and released by a construction specialist. These mortgages have fees associated with them so you will need to inquire about the costs before you proceed.

You can also use a cash out refinance or a home equity line of credit (HELOC). These options do not require any documentation for renovations. The cash out refinance is funded in a lump sum and borrowers can proceed with home renovations as they choose.

The home equity line of credit has a limit that can be accessed so people can pay for renovations as they do them. In both cases, the homeowner should have a minimum of 20% equity in the home.

What are the requirements for a renovation loan?

The requirements for a renovation loan can vary, depending on the type of renovation loan you are using. If you use an unsecured home improvement loan, you may only need a good credit score, stable income, and a reasonable debt-to-income ratio to qualify. However, if you are using a secured loan, you will need collateral or plenty of equity in your home, in addition to good credit, stable income, and so on. Requirements may also vary depending on the lender.

If you are unsure of where to start or worried you may not qualify for enough money, you should check your credit score. If you check your score and it's 600 or above, you may want to see if you qualify. At Acorn Finance, you can check unsecured personal loan offers without impacting your credit score. If your credit score is below 700, you may want to work on improving your credit score before applying for a renovation loan of any type.

Which bank is best for a renovation loan?

It depends what you are looking for. Two banks that rated highly for home renovation loans are SoFi and LightStream. LightStream and SoFi both have a maximum loan amount of $100,000. Acorn Finance partners with top national lenders, including LightStream and SoFi.

What is the best way to renovate a house?

When you renovate a house, you can either focus on one room at a time, or tackle the entire project. If you are limited on funds, you may need to do it little by little. If you take out an installment loan, you may want to tackle everything at once. If you have an idea of what your remodel will cost, you can go ahead and apply for financing. If you are unsure of what your remodel will cost, you may want to get some estimates.

While you may be able to do some of the work yourself, this will depend on the scope of the project and your skill set. If you decide to work with a contractor you will want to verify their quality of work and reliability. If you can trust the contractor, your renovations should be much less stressful.

How do you renovate a house with no money?

This will depend on what you want done. If it is just a refresh, the first thing you will want to do is deep clean. You can have the vents, all the window coverings, upholstery, carpets, grout, and many other things cleaned. Along with that, you can declutter. This can give you the feeling of having more space. Painting is a great option to change the feel of your home, but it may not be free. Almost anything can be repainted-walls, doors, trim, ceilings, cabinets and more. Think about refinishing items like floors, bathtubs, and doorknobs. You can upgrade your interior with new window coverings, plants and art. Perhaps you can find free window coverings or wall art through groups in your community. If you are renovating a house with little to no money you'll need to get creative.

Discover the best way to borrow money for home renovations...get started online today!

Is 50k enough to renovate a house?

In some cases 50k may be a generous budget for renovating a home. It really all depends on what your plans are. Most homeowners spend at least $10,000 when doing home renovations. This is typically for smaller home improvement projects. With $50,000, you can do several renovations and increase your home value significantly. If you are working with a sophisticated contractor that can execute high quality work for an affordable price, you may even be able to accomplish a complete home renovation and transform your home.

Kitchens are typically the most expensive renovation, but they can give you the best return on investment. Potential home buyers often seek out homes with remodeled kitchens. If you are renovating the kitchen, you can expect to spend about $20,000. Since the kitchen is the most expensive part of the renovation and it will cost around $20,000, you can see how renovating several rooms in the house can be done with $50,000.

How much should I spend on a renovation?

How much you should spend on renovations really all depends on what your plans are. When it comes to home renovations, you will face several options. Many of which can impact the cost.

If you are fixing the kitchen by adding in new cabinets or appliances, you can expect to spend about $15,000-$20,000. The more parts of the kitchen you are renovating, the more money you can expect to spend. You might also be able to save some money with DIY, but this is only acceptable for some projects.

Upgrading the bathroom is also a common home renovation. Bathrooms are another important part of the home that do not cost as much to remodel compared to kitchens. Typically, a bathroom remodel will cost about $2500-$4200. The more fixtures and cabinets you update, the more it will cost. If you have to update plumbing, you should also expect to pay more.

Some homeowners that are trying to increase the value of their home decide to add on a deck or porch. This is a cost-effective way to add value to your home. Decks usually cost between $1,000 to $8,000. The exact price will depend on the materials used and size of the deck. If you choose to finish your renovations with landscaping, expect to spend about $3,000 or more.

Any renovations that can enhance your living space and increase the value of your home should be considered. While you don't want to overspend, you also want to make sure you use quality materials and skilled laborers when necessary.

How do I estimate renovation costs?

The best way to estimate renovation costs is by getting a contractor to come and look at your home and provide an estimate. Getting a contractor on-site can allow you to gain a realistic idea of how to complete renovations and what they will cost. Another option is to contact a designer if you are working on an interior area.

Once you know the scope of your project and what it will cost you can move forward with finances. Some contractors may ask for a deposit before they start the job so you may need to secure funds ahead of time. In addition, you may need to pay for the materials. Labor costs are often the most expensive part of the renovation process.

If you are unable to qualify for enough financing or uncomfortable with the payment you may need to revise your plans. It's better to figure out financing before the project starters whether you need to or not.

What does a renovation loan cover?

A home renovation loan can cover any costs related to your home or any "fixer-upper" project you might be doing. Anything from materials to labor and finishing touches can be covered by a renovation loan. Before you secure the loan you should determine what your project will include so that you can borrow enough money. In most cases, the lender will not ask for renovation plans. If the loan does not have spending restrictions you should be able to use funds for just about anything.

How long can you finance a home improvement loan?

This depends on the lender and how long they are giving you the loan term. Most repayment terms are between 12-84 months. The short your loan term, the higher your monthly payments will be. However, sometimes longer loan terms are necessary, so your monthly payments are more affordable. The term available often depends on the loan amount and the lender. Some lenders can offer terms up to 12 years.

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Can I renovate a home with a 650 credit score?

Typically, you need a credit score of at least 620 to qualify for a home renovation loan. With a 650 credit score, you should qualify for a home renovation loan, but keep in mind, the lender will likely consider other factors in addition to your credit score. Most lenders will look at your debt-to-income ratio and monthly income at the very least. If you have a 650 credit score and a high debt-to-income ratio, you might not qualify. Before you apply for a loan you should review your credit usage and credit score. If you can identify ways to improve your credit before applying you may be able to secure a lower interest rate.

Can you use a construction loan for home renovation?

Construction loans may work for financing substantial home renovations. However, they may be a complicated option. Construction loans often have strict requirements and heavy regulation. In most cases, funds are disbursed depending on the phase of the project. The lender wants to make sure plans are executed as submitted before releasing more money. Construction loans are often short-term and variable rate loans.

What credit score do you need for a construction loan?

As we mentioned earlier, construction loans can be harder to qualify for. Most lenders will want borrowers to have a minimum credit score of 680. If your credit score is below 680, you may want to seek an alternative financing option. Just like other types of loans, your chance of locking in a lower interest rate is better with a higher credit score.

What are the average interest rates on construction loans?

This depends on the lender and the credit score you have. Some lenders will offer loans with lower interest than others. Always shop around before you choose a lender and apply for the funding.

A typical interest rate will be about 4.5% for a construction loan. If your credit score is low, you might get a loan for 15% or higher. While interest rates may be low for a construction loan, qualification requirements are usually strict. Some homeowners may prefer to pay a slightly higher interest rate to avoid some of the legwork and headaches that come along with a construction loan. You should always compare loan options and make educated financial decisions. In addition, if you plan on completing home renovations on your own, a construction loan may not allow you to do so. During the approval process, most lenders will evaluate the contractor or building team to ensure they are legitimate.

What are the pros and cons of borrowing money for home renovations?

Let’s take a look at the pros and cons of borrowing money for home renovations…


Improve home value

Make fast home repairs

Create more livable space

Affordable monthly payments


Taking on debt

Origination fees

Interest fees

Frequently Asked Questions

Home Renovation Financing FAQs

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How do home renovation loans work?

Home renovation loans are designed to help all kinds of homeowners obtain the money they need to complete either major or minor renovations to their homes. Whether a homeowner has an excellent credit score or a bad credit score, a large income, or a modest income, there are different types of home renovation loans out there for almost every situation. Additionally, there are some renovation loans that can help an individual purchase an older home that is in need of major repairs, and not only fund the purchase of the house but fund the renovations as well. These fixer-upper renovation loans come in the form of a mortgage renovation loan. There are two main types of renovation loans; mortgage renovation loans, and personal home improvement loans.

Fannie Mae HomeStyle loan

Fannie Mae is a government entity that purchases mortgages from banks. When Fannie Mae purchases these mortgages from banks, it allows the banks to stay liquid and to originate more mortgages. Keeping the bank liquid helps to keep the economy moving. Fannie Mae was also created to help make homeownership more affordable for mid and low-income borrowers. A Fannie Mae HomeStyle loan is one of the loan programs that they offer. A HomeStyle loan is different from a conventional mortgage. Like a conventional mortgage, funds are disbursed at closing, however, if there are additional funds for renovations, then an approved contractor must submit plans to the bank. Once the work is complete and all the renovations pass inspections, then the bank sends the money to the contractor. This process is the same whether you are refinancing your existing home or you are purchasing a fixer-upper. To qualify for a Fannie Mae HomeStyle loan you should have a minimum credit score of 620 and a debt-to-income ratio that is below 50%. Additionally, you will need to provide at least a 5% down-payment if the home is your primary residence, and you should have an approved contractor submit detailed plans to the bank. A Fannie Mae HomeStyle loan will cover most renovations that are permanent and that could increase the value of the property, however, they do not cover costs associated with demolishing a home and rebuilding a new one, building a second home on a new property, and any improvements that are not permanent like the purchase of furniture, light fixtures, and certain types of landscaping. The Fannie Mae HomeStyle renovation mortgage comes in either a 15-year or 30-year loan term and it maxes out at around $548,250 for a single-family home. If you live in a high-cost metro area, then the mortgage limit is increased to $822,375 for a single-family home. These loan amounts are based on the future value of your home after the renovations are complete.

FHA 203(k) rehabilitation loan

An FHA 203k rehabilitation loan is a renovation loan that is backed by the federal government through the Federal Housing Administration and HUD. An FHA 203k loan can be used to purchase a fixer-upper home or to refinance a current home. The loan amount is based on the future value of the home once renovations are complete, and the loan amount is capped at $420,860 for low-cost counties and $970,800 for high-cost counties. These loan caps are for the 203k standard loan. The 203k limited loan provides up to $35,000 for renovations, however, major structural repairs, like repairing a home's foundation, are not eligible. For structural repairs, a 203k standard loan will need to be acquired. Another requirement for the 203k standard loan is that it is most likely that a HUD consultant will need to be involved to oversee and sign off on the renovation process. Once an FHA 203k loan is approved, the funds cannot be used for luxuries like installing a swimming pool, however, the funds can be used for a great variety of renovations. Some eligible projects are projects that improve a home's functionality or attractiveness, eliminate health and safety hazards, improves a homes plumbing and sewer systems, replaces or replaces a home's roof, gutters, and/or downspouts, replaces the flooring, makes a home more energy-efficient, and ensures that a home is handicap accessible. All of these eligible renovations must be completed by a licensed contractor, approved by an FHA appraiser, and at times, inspected and approved by a HUD consultant. To qualify for an FHA 203k rehabilitation loan, a borrower with a credit score of 580 or higher must provide a minimum down payment of 3.5%. For a borrower with a credit score between 500 and 579, a minimum down payment of 10% must be provided. Any credit score below 500 is not eligible for an FHA loan.

VA renovation loan

A VA renovation loan is designed to let you buy a new home or refinance a current home and roll the cost of renovations into your new mortgage. The loan amount is determined by the expected value of the home after all repairs are complete. If you are purchasing a home to fix it up, it does not need to meet the VA's minimum property requirements at the time of purchase, however, the funds from the renovation loan must bring the home up to the VA's standards. Other VA loan options that may make funds available to be used for renovations include a VA cash-out refinance, a VA loan for energy efficiency, and a supplemental VA loan. Each VA loan type has its own set of requirements. To qualify for any type of VA loan you should have served at least 90 consecutive active-duty days during wartime, 181 consecutive days during peacetime, 6-years in the National Guard, or be the spouse of a service member who died from service-related disability or in the line of duty. Also, VA loans must be used on a primary residence, cannot be more than the repaired value of the home, and any contractors that are to work on the renovations must be approved by the VA. Additionally, someone looking for a VA loan should also have a minimum credit score of 660.

Home equity loan

Home equity loans allow you to borrow money by leveraging the equity in your home. The loan amount is dispersed in one lump sum and is paid back with monthly installments. The interest rate is fixed and the funds can be used to pay for expensive renovation projects. If you take on a home equity loan, you should be prepared to take on an additional monthly payment in addition to your existing mortgage. If you should happen to fall behind on payments for either your first or second mortgage, the bank or lender could potentially seize your home and sell it to cover the mortgage balance.

Home equity lines of credit (HELOCs)

Home equity lines of credit are similar to home equity loans minus a few minor details. A HELOC is a revolving source of funds that acts similarly to a credit card or a personal line of credit. Essentially, a lender will qualify you for a certain amount and you can borrow all of it at one time or you can make microloans for as long as there is a balance and for as long as the line of credit stays open. As you make payments each month, the amount that you can borrow gets replenished. Most lenders offer a 20-year repayment period with a 10-year draw period. The funds can become available from the lender through online transfers, writing a check, or sometimes a lender will issue a credit card to access the funds in the HELOC.

Cash-out refinance

A cash-out refinance is when you take out a new mortgage that is more than what you own on your existing mortgage but less than the current value of your home. The difference between the old and the new mortgage can be pocketed and then used to complete any home renovation or improvement projects you desire.

Unsecured personal loan

An unsecured personal loan can be for any amount up to $100,000 for up to 12-years, depending on the lender and what you qualify for. Benefits of an unsecured personal loan include that the money can be used for any type of home improvement or renovation as long as there are no spending restrictions, you do not have to have an appraisal or inspection conducted, and if you should happen to default on the loan, you are not in jeopardy of losing your home. Different lenders will have different minimum credit score and income requirements to qualify as well as different maximum loan amounts and APRs. Some lenders may work specifically with subprime borrowers whereas others may reserve personal loans for good or excellent credit borrowers. When looking for an unsecured personal loan to pay for any major or minor home renovations, you will want to compare lenders to see what kinds of fees and penalties come with the loan, how long the loan repayment periods are, how much you can borrow, what interest rates the lenders offer, and what kind of monthly payments you may be required to pay.

Secured personal loan

A secured personal loan is the exact same thing as an unsecured personal loan except you are required to put up an asset of value as collateral to secure the funds. If you should fall behind on payments and/or default on the loan, the lender has the right to seize the asset to recover the amount of the loan balance plus any additional fees. Some examples of assets that could be used to secure a personal loan include a large savings account, a certificate of deposit, investments in a retirement account or stocks and bonds, a home, a vehicle like a car, motorcycle, boat, or RV, or expensive jewelry and collectibles. Ultimately, it is up to the individual and the lender to come to an agreement about what can be accepted as collateral to secure the loan amount being requested.

Personal line of credit

A personal line of credit is similar to a home equity line of credit except you are not using your home as collateral. Instead, a personal line of credit is based solely on your credit history and your income. Again, a lender will approve you for a certain amount and you are allowed to borrow against that amount while making monthly payments.

As we discussed, there are two main types of renovation loans, mortgage renovation loans, and personal renovation loans. There are pros and cons to either type and the best renovation loan option is the one that works best for your circumstances at the time of needing the funds.

How do you compare home renovation financing lenders?

If you are looking for a personal home renovation loan, then the easiest way to compare renovation loan offers from multiple lenders at the same time is to prequalify. By entering in a small amount of personal and financial information, you could prequalify for a personal home improvement loan and find out how much you could qualify for, at what interest rates, and which lenders may be interested in working with you. Essentially, prequalification opens you up to receiving loan offers from various lenders who extend personal renovation loans to interested borrowers. Once you start to receive the loan offers, you can begin to compare the financing options presented by many of the top online lenders located throughout the country. At Acorn Finance you can check personal loan and personal line of credit offers from top national lenders without impacting your credit score. This is one of the safest and easiest ways to compare unsecured home improvement loans.

How do you apply for a home renovation loan?

The process of applying for a home renovation loan is different depending on the type of renovation loan you are looking for. The process to apply for a personal home renovation loan is typically going to involve different steps than applying for a home equity loan, home equity line of credit, a cash-out refinance, or one of the many government-backed renovation loan programs. In all circumstances, you can bet that your credit history will probably be reviewed and your income may need to be verified. That is why you should obtain a free copy of all three of your credit reports and research each renovation loan option and lender to see what the criteria are for qualifying for a home renovation loan.

Are home renovation loans tax deductible?

Yes, the Internal Revenue Service (IRS) allows a homeowner to deduct interest paid on a home equity loan or a home equity line of credit if the funds that are used to buy, build, or substantially improve the home that is used as collateral to secure the loan. In order to claim this tax credit, the loan that you are writing off the interest for must be secured by a qualified home and the home improvement must be a substantial home improvement. So, what does that exactly mean in the eyes of the IRS?

First, a qualified home used to secure a home equity loan or HELOC must fit the following definitions. A qualified home must be a primary or secondary residence that includes a house, condo, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities. If you have a qualified home that is being used as collateral to secure a home equity loan or HELOC, then you may be able to write off mortgage insurance premiums, home equity loan interest, or mortgage interest on your taxes.

Second, the funds from these types of financing must be substantial home improvements and not basic maintenance that is required from wear and tear. For example, minor repairs like painting, gutter cleaning, leaky pipe repair, and power washing may not be tax-deductible. However, the interest from loans that are used for substantial projects like building a deck, replacing a roof, installing central A/C, putting on an addition, constructing a new bathroom, making your home energy-efficient, putting in all-new insulation, and some landscaping projects may be considered tax-deductible.

What is a HELOC?

A HELOC is a home equity line of credit that allows a homeowner to borrow again the equity they have built up into their home. Equity is essentially the difference between the value of your home and your mortgage balance. The larger the gap, the more equity you have. When you open up a home equity line of credit, you are allowed to borrow money up to a certain credit limit that is established by the lender. You then pay back the borrowed money along with the interest the lender is charging. A HELOC offers much more flexibility than a home equity loan because you can withdraw and make many payments as many times as you would like. This could be done monthly, weekly, or even daily if needed.

Is a renovation loan a HELOC?

A renovation loan is not a HELOC, but instead, a HELOC is a type of renovation loan. Renovation loans can range from HELOCs and home equity loans to FHA loans and personal loans. The type of renovation loan that you ultimately decide to utilize is up to you and your financial situation.

What are the pros and cons of a HELOC?

A home equity line of credit may be an excellent way for homeowners to get the money they need to complete the home renovations that they have always wanted. However, like everything else in life, there are both pros and cons that should be fully considered before committing. Here are some of the pros and cons that taking on a HELOC can present.


No closing costs: If you have good credit, then the chances are you will not have to pay any closing costs to open a HELOC. No closing or appraisal costs and no application fees like you may see with a home equity loan.

No fees for cash withdrawals: Credit cards have fees for cash advances, however, anytime you make a withdrawal from a HELOC, you should not be charged a fee to do so. If you are reviewing HELOC options and there is a fee to withdraw funds, you may want to consider a different lender.

Lower interest rates: HELOCs tend to come with lower interest rates than credit cards, personal loans, and personal lines of credit since you are using your home as collateral to secure the funds. Also, most HELOCs are required by law to have a cap on the maximum interest rate.

Tax write-off: In most situations, you may be able to write off any interest you paid on a HELOC.

Flexibility: Once approved for a HELOC, you can use the funds at your own discretion. You do not need bank or lender approval each time you make a withdrawal request.


Adjustable interest rate: With a HELOC, you may see an increase in the interest rates you are required to pay versus a home equity loan that locks in a specific interest rate. However, as rates can go up, they can also go down.

Using your home as collateral: HELOCs have many benefits, however, you are technically using your home as collateral, and if you fall behind on payments, you risk losing your home.

What is a cash-out refinance?

When you take on a cash-out refinance, you are essentially replacing your old mortgage with a new one. The new mortgage is for a larger amount than the amount owed on the original mortgage. You can use the amount difference between the old and the new mortgage to finance any home renovations you would like to complete.

How much money can you get from a cash-out refinance?

A cash-out refinance allows you to take out a loan for up to 80% of the total value of your home. Once you subtract the amount you currently own on your home, you can then withdraw the remainder as cash. For example, if your home is worth $400,000, then the maximum refinance loan amount is $320,000. If you still owe $250,000 on your current mortgage, then the maximum amount you can take out for a cash-out refinance is $70,000.

What are the pros and cons of a cash-out refinance?

If you are considering a cash-out refinance to help fund your home renovations, then you may want to be aware of all the pros and cons that come with a cash-out refinance.


Lower interest rates: If you do a cash-out refinance properly, you should be trying to lock in a lower interest rate than your original mortgage.

Tax implications: In most circumstances, any interest paid on your cash-out refinance can be tax deductible if the funds are used to pay for home improvements.


Risk of foreclosure: A cash-out refinance is a serious investment that may have long-term implications if you should happen to fall behind on your new mortgage payments.

Top online lenders of 2022 who offer various renovation loans:

Below are some of the best online lenders who offer various renovation loans whether they are in the form of personal renovation loans or home mortgage renovation loans. Feel free to inquire to see what types of renovation loans are offered by these top lenders of 2022.


Qualifications Needed: Minimum credit score of 680. Minimum income of $50,000/year

Starting Interest Rate: 2 to 7-year loans available with APRs that range from 5.99% to 20.94%

Max Loan Amount: $100,000

Pros: Lower APRs, no fees, quick approval and funding, many educational resources available

Cons: High credit score and income requirements

Why Choose: SoFi is an exceptional lender for borrowers who need a large amount of money and who are looking for the most competitive interest rates.


Qualifications Needed: Minimum credit score of 660. Minimum income of $50,000/year

Starting Interest Rate: 2 to 12-year loans available with APRs that range from 6.99% to 17.49%

Max Loan Amount: $100,000

Pros: No fees, competitive interest rates, and offers a rate discount for autopay enrollment

Cons: Requires several years of credit history with a diverse selection of credit accounts to qualify

Why Choose: LightStream is a great lender for people with good or excellent credit, a long credit history, who are looking for a large sum of money with some of the best interest rates available on the lending market.

Home equity loans or home equity lines of credit:

Spring EQ

Qualifications Needed: Minimum credit score of 640

Starting Interest Rate: APRs start at 4.06%for HELOCs and 5.183% for home equity loans

Max Loan Amount: $500,000

Pros: Fast funding, flexible borrowing, competitive interest rates, easy application process

Cons: Requires a number of fees and is not available in every state

Why Choose: Spring EQ has a good reputation for providing qualifying homeowners with up to $500,000 to help with major home renovations. They offer competitive interest rates and the application process is simple.

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