Advertiser Disclosure

If you’re a homeowner, there’s a good chance you’re planning home improvements. In fact, a 2018 survey by LightStream found that 45% of respondents expect to spend at least $5,000 on a project and the percentage of people planning to spend $35,000 or more doubled from the earlier year.

Whether you want to build a deck, remodel your kitchen, or upgrade a bathroom, you might need a home improvement loan to make it happen.

Getting a home improvement loan with no equity doesn’t have to be a daunting task, though. Here’s how to do it.

How to get a home improvement loan with no equity

When many people think of borrowing money to make home improvements, they think of home equity loans or lines of credit. The value (or equity) in your home secures the loan, allowing you to potentially fund an expensive project.

However, not everyone has a lot of equity in their home. Recent homeowners might not have had time to pay down the principal on their mortgage. And a drop in home values for long-time homeowners can erase some of their equity.

The good news is it’s possible to get a home improvement loan with no equity. There are two options.

1. Personal loan

“Instead of basing the loan on a home’s value, lenders evaluate personal loan applications based on factors like a person’s credit score, credit history, and creditworthiness,” said Abhinav Anand, the head of consumer lending at Marcus by Goldman Sachs.

Consumer lenders such as Marcus and SoFi offer home improvement loans. Depending on your credit history, it’s possible to find interest rates that rival those offered on home equity loans.

2. Title I Property Improvement Loan

If you need to borrow $7,500 or less, it’s possible to get a loan insured by the U.S. Department of Housing and Urban Development (HUD).

HUD doesn’t issue the loan, but it works with private lenders to help you get funding to make repairs, improvements, and alterations to your home — all without requiring you to secure the loan with a property.

However, you have to show you have the “ability to repay the loan in regular monthly payments” — what this means can differ since the ability to repay is interpreted by the lender and the government agency insuring the loan.

Advantages of getting a home improvement loan with no equity

Most unsecured home improvement loans have fixed interest rates, offering an advantage over home equity lines of credit that often feature adjustable rates, according to Jennifer Beeston, the vice president of mortgage lending at Guaranteed Rate.

“If the loan has an adjustable feature, you need to understand what the max adjustment interest rate is,” Beeston said.

Fixed rates become even more important in today’s environment of rising rates. With the Federal Reserve signaling more rate hikes in the coming months, it can make sense to lock in a rate with a fixed-rate unsecured home improvement loan.

The application process for a no-equity home improvement loan can be faster than for a traditional home equity loan, Anand pointed out. Because there’s no need for an appraisal, it’s possible to get your personal loan money in a matter of days, instead of waiting up to 30 days or more to get started on your project.

Finally, when you figure out how to get a home improvement loan with no equity, you don’t need to worry about losing your house if you can’t make your loan payments.

Drawbacks to getting a no-equity home improvement loan

Without equity to secure the debt, you might not be able to borrow as much money as you want.

LendingClub and Marcus limit loans to $40,000, and Avant won’t authorize a home improvement personal loan for more than $35,000. Even though it’s possible to borrow up to $100,000 from SoFi, you might not qualify for that amount if you don’t meet the lender’s income and credit requirements.

Choosing a no-equity home improvement loan

In the end, whether you get a home improvement loan with no equity depends on your goals and financial situation.

If you don’t have enough equity in your home to use it as security for your debt, you have little choice — it’s an unsecured home improvement loan or nothing.

However, if you do have the equity in your home, weigh your options. Compare interest rates and other terms, and think about whether you want to tie up some of your home’s value in an improvement loan.

“Home improvement personal loans are great for owners looking to make repairs or improvements, like adding new floors or remodeling a kitchen or bathroom,” said Anand. “It can help them get closer to their dream home without having to borrow against it.”

Interested in a personal loan?

Here are the top personal loan lenders of 2018!

Lender	Rates (APR)	Loan Amount
1 Includes AutoPay discount. . 2 . Personal Loan Rate Disclosure: Fixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount. * . Personal Loan Rate Disclosure: Fixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
	7.73% – 29.99%	$1,000 – $50,000
	6.15% – 15.37%1	$5,000 – $100,000
6.87% – 35.97%*	$1,000 – $50,000	Visit Upgrade
	8.00% – 25.00%	$5,000 – $35,000
4.99% – 29.99%	$10,000 – $35,000	Visit FreedomPlus
5.99% – 18.99%2	$5,000 – $50,000	Visit Citizens
15.49% – 34.49%	$2,000 – $25,000	Visit LendingPoint
5.99% – 35.89%	$1,000 – $40,000	Visit LendingClub
5.49% – 18.24%	$5,000 – $75,000	Visit Earnest
9.95% – 35.99%	$2,000 – $35,000	Visit Avant

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.