Home improvement loan calculator: Up To $100,000
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Your monthly home improvement loan calculator
Planning a home renovation can be exciting, but figuring out how to pay for it can be overwhelming. Whether you're remodeling your kitchen, adding a new bathroom, or upgrading your outdoor space, understanding your financing options is crucial. That's where a home improvement loan calculator comes in handy. It makes planning your budget easier. As easy as clicking a button!
What does the Kukun Home Improvement Loan Calculator do?
Once you get a budget for your renovation project, you need to decide on the best ways to pay for it. And, one of the most reliable ways to do so is to utilize this home improvement loan calculator. Kukun Home Improvement Loan Calculator will help you estimate the cost of financing your home improvement project. It calculates your monthly payments and how much interest you'll pay over time based on factors such as:
- The loan amount (how much money you're borrowing)
- Interest rate (the percentage you pay to borrow the money)
- Loan term (how long you have to repay the loan)
This is a smart way to evaluate all the financial options you have so you can gauge what you can truly afford. The best part is that you can enter or change the different parameters and arrive at the corresponding results. All within a few seconds!
How to use the home improvement loan calculator?
The renovation loan calculator is easy to use.
Step 1: Enter the loan amount
Start by entering the amount you plan to borrow for your home renovation. A remodeling cost estimator will help you know how much money you need for your project.
Step 2: Choose the loan term
The loan term refers to how long you have to pay back the loan. Common terms range from 2 to 30 years, depending on the type of loan.
Step 3: Enter the interest rate
The interest rate you receive is based on your credit score, the loan type, and other factors. Our home improvement loan calculator will give you a clear view of how different rates impact your monthly payments and overall cost.
Step 4: Compare loan options
The calculator will show you your estimated monthly payments and total interest over the loan's life. You can use this tool to find the one that works best for your financial situation.
What are the factors that affect your home improvement loan options?
Several factors can impact the loan you're offered, including:
- Credit score
- Loan amount
- Loan type
- Payment frequency
- Interest rate
A credit score refers to a number (ranging from 300 to 850) that indicates how "creditworthy" a person is. The score is determined from an analysis of the person's credit files and credit report. The higher the credit score, the greater the chance of that person to qualify for a loan. They will also get more favorable interest rates and credit limits.
This refers to the amount of money you receive from the lender, minus any origination fee. Borrowers with an excellent credit score and an impeccable credit report are usually able to secure a higher loan amount. The maximum amount you can borrow to update your home is about 90% of the market value of the property.
The loan type refers to the kind of home improvement loan that you receive from a bank or financial institution in exchange for future repayment of the principal amount as well as interest.
This refers to your loan repayment schedule. Most loan companies give you the option of choosing between monthly, semimonthly, or bi–weekly loan payments.
The interest rate is the percentage of the principal amount charged by the lender for the loan. The longer your repayment term, the more interest you can expect to pay.
What are home improvement loans?
A home improvement loan is a way to borrow money for remodeling or repairs. You can get anywhere from $1,000 to $100,000, and you'll usually have between one and seven years to pay it back. These loans come with a fixed interest rate and steady monthly payments, so you'll know exactly what to expect. Since the loan isn't tied to your home, you won't lose your property if you can't repay it. After approval, you get the full loan amount upfront, and then you make regular payments until it's fully paid off.
What are the different types of home improvement loans?
There are several ways to finance a home renovation. Here are some popular options you can use with a home improvement loan calculator to see which one might work best for you.
Personal loans
Personal loans are unsecured, meaning you don't have to use your home or other assets as collateral. You receive the money as a lump sum and start making monthly payments right away.
The terms of personal loans vary, but they often have shorter repayment periods – usually between 2 to 7 years.
Home equity loans
A home equity loan allows you to borrow against the equity you've built up in your home. It's a secured loan, meaning your home is used as collateral, which can result in lower interest rates compared to unsecured loans. Like personal loans, home equity loans give you a lump sum of money, and you pay it back in fixed monthly installments.
The loan amount you can get depends on how much equity you have in your home. Generally, you can borrow up to 85% of your home's equity. The repayment periods can vary, but they're usually between 10 to 30 years, making this option ideal if you need a longer time to pay off your loan.
Home equity line of credit (HELOC)
A home equity line of credit works like a credit card. Instead of receiving a lump sum, you can borrow money as needed during the draw period, which typically lasts 10 years. During this time, you only pay interest on the amount you borrow. After the draw period ends, you enter the repayment phase, where you start paying back both the principal and interest.
This flexibility makes HELOCs ideal for ongoing or multiple renovation projects. The interest rates on HELOCs are typically variable, which means they can fluctuate over time.
Cash-out refinance
With a cash-out refinance, you replace your existing mortgage with a new one that has a higher loan balance. You receive the difference between the two mortgages in cash, which you can use for your home improvement project.
FHA 203(k) rehab loan
This loan combines the cost of buying and renovating a home into one mortgage, with the added benefit of being insured by the Federal Housing Administration. Currently, rates average around 6.56%. This type of loan is ideal for buyers looking to purchase and fix up a property at the same time, especially those with less–than–perfect credit, as FHA has more lenient credit standards. However, since this is a mortgage product secured by your home, you could risk losing the property if you fail to keep up with payments. It's best to start shopping for an FHA 203(k) loan after selecting a home and estimating renovation costs. Once you're ready, check if you qualify and compare rates from FHA–approved lenders, including banks, credit unions, and online lenders, while also considering closing costs and fees.
What is another financing option for you?
Using credit cards for home improvements can be convenient, especially for smaller projects. However, they usually come with higher interest rates, and if you're unable to pay off the balance quickly, you could end up paying a lot more in total interest over time. This option is best for people who can pay off the balance within a few months or who have access to 0% APR credit cards.
What is the cheapest way to borrow money for home improvements?
The safest and cheapest financial option to pay for your home renovation is to save that amount of money in a savings account. Of course, it would mean waiting longer to begin your project. And, not many people have such a large amount stacked away. Especially, for larger home projects or emergency repairs.
Home improvement loans vs. home equity loans: What are the differences?
Home improvement loans don't require collateral unless you opt for a secured version, and the loan amount isn't tied to your home's equity. While some lenders will approve borrowers with credit scores as low as 580, the rates can be higher for bad credit. However, these loans don't offer any tax benefits for home improvement expenses.
Home equity loans, on the other hand, let you borrow against the equity in your home, which is used as collateral. The amount you can borrow depends on how much equity you've built up, and there's the added benefit of being able to deduct the interest if the loan is used for home improvements. These loans usually require a minimum credit score of 620. Rates are generally lower than home improvement loans, averaging between 8.37% and 9.49%. However, the loan approval takes longer since your home's value must be assessed.
How to get the best home improvement loans?
Before applying for a home improvement loan, it's smart to get quotes from several lenders to find the best deal. When comparing lenders, here are some key factors to watch.
- Look at the approval requirements. Each lender has different standards, considering things like income, credit score, and debt–to–income ratio (DTI). If your credit isn't great, search for lenders that consider other factors, such as your job history.
- Pay attention to interest rates and fees. The lowest rate advertised isn't always what you'll get, so compare your actual quotes, keeping in mind fees like origination or application fees, which can raise the total cost. Shop around for the best rates.
- If your credit needs a boost, adding a co–signer might help, but not all lenders allow it.
- The loan amount is another key point – make sure the lender offers enough for your specific project. And, of course, the repayment options are important, with most lenders offering terms from 12 to 84 months. Longer terms lower your monthly payment but cost more in interest over time.
- Watch out for any unique features, such as discounts for setting up automatic payments. And, avoid pre–payment penalties for paying off the loan early.
- Check the lender's customer service to see what others say about their loan experience.
What do you need before applying for a loan?
Look for lenders that match your credit profile and offer the loan amounts and terms you need. Next, gather the necessary paperwork, such as your photo ID, proof of income, and proof of residence. You might also need to provide details about your current debts and housing payments.
If possible, get prequalified with multiple lenders. Loan prequalification lets you see potential rates and monthly payments without affecting your credit score. Once you've compared your options and picked a lender, fill out a full application. Double–check everything to avoid errors, and remember that most lenders will do a hard credit check at this stage. To minimize any credit score impact, try to complete multiple applications within a 14–day window.
Which bank is best for home renovation loans?
When looking for the best home improvement loan, you need to search for the one with the lowest interest rate, the shortest repayment term, and the fewest fees possible.
Here are some of the top home improvement loan lenders. The data has been sourced from the consumer financial services company Bankrate.
| Loan Lender | Best for | APR | Loan Amount Available | Minimum Credit Score |
|---|---|---|---|---|
| LightStream | Long–term financing | 7.49–21.94% (with autopay) | $5,000–$100,000 | 695 |
| Achieve | Pre–renovation debt consolidation | 8.99–35.99% | $5,000–$50,000 | 620 |
| Citi | Loan with no fees | 11.49–20.49% | $2,000–$30,000 | 720 |
| Best Egg | Consumers with limited credit history | 7.99–35.99% | $2,000–$50,000 | 600 |
| Upstart | Consumers with below–average credit | 7.80–35.99% | $1,000–$50,000 | Not specified |
| Discover | Low fair credit rates | 7.99–24.99% | $2000–$35,000 | 660 |
| LendingClub | Emergency home repairs | 9.06–35.99% | $1,000–$40,000 | 600 |
| Prosper | Peer–to–peer lending experience | 8.99–35.99% | $2,000–$50,000 | 640 |
| Upgrade | Fast funding | 9.99–35.99% (with autopay) | $1,000–$50,000 | 600 |
What are the pros and cons of a home renovation loan?
Applying for a renovation loan makes good sense when you're planning to buy a fixer-upper or are making value-enhancing upgrades to your existing home.
Pros
The benefits of a renovation loan include:
- It allows you to borrow money based on the expected value of your upgraded home.
- You can use the loan amount to restore an old home.
- Since you're applying for both a mortgage for the house and renovation, your interest rate will usually be lower – with a longer period of time to repay the loan.
- If you're making improvements that will add value to your home, you can expect the interest to be tax deductible.
Cons
There are a few downsides to a renovation loan.
- There are not many loan lenders or banks who are willing to offer special "renovation loan" programs.
- You'll have to prove to the bank or your mortgage lender that your renovated home will have a higher value.
- Qualifying for a loan takes longer than a traditional mortgage.
Are renovation mortgages a good idea?
Taking a loan to cover home renovations can be a smart move because the improvements you make could add to your home's value – helping you get a higher sale price if you decide to sell your home in the future. Additionally, you may get a tax benefit on interest paid on a house renovation loan that helps to increase the value of your house.
Using a home renovation loan calculator can make planning for your project and budget easier. Remember that knowing the full financial picture will help you keep your budget on track. Happy renovating!
