Home Improvement Loans: Canada’s #1 Private Lender


Home improvement loans have been created to assist home-owners with their repairs and renovations. These are considered unsecured personal loans, which according to a recent CIBC publication, are harder to get because a high credit score is required. Borrowers needing these loans can be approved for up to $100,000, and it can be paid back over several years.

Since home improvement loans require a borrower to have a good credit score and salary, there is no need to use collateral or assets as security. It is important to remember that if you are unable to pay back the loan, your credit score will be negatively affected.

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What Are the Pros and Cons of Home Improvement Loans?

If you need to make significant repairs or renovations to your home, but are lacking the funds, a home improvement loan can allow you the monetary freedom to do so. Since lenders approve larger amounts for home improvement loans, they should be used for larger projects that are out of your normal price range. Smaller home projects can be funded with credit cards or from a rainy-day fund.

The following factors are the pros of home improvement loans:

  • Quick approval time: Since lenders require borrowers to have good credit scores and reliable income, they are considered less risky, which allows lenders to approve borrowers within a day or two.
  • Minimal paperwork: Compared to other secure loans, there are less requirements, making them easier to apply for with less documentation for you to collect.
  • Pre-approved payments: With home improvement loans, repayment is often set up for automatic withdrawals from your bank account, so you can set it and forget it.
  • Access to funds: Having access to required funds to complete renovation projects or upgrade areas of your home can improve your life and reduce stress.


Even though there are plenty of good factors for home improvement loans, there are also the following cons:

  • Higher interest rates: With unsecured loans, the interest rates may be higher since the borrower is not having to put up assets or collateral.
  • Not tax deductible: There are no tax benefits on the total interest paid for personal loans, which can be done on other types of loans.


What Should I Be Looking for When Shopping for Home Improvement Loans?

If you are trying to find the best home improvement loan for your needs, there are certain factors that you should be considering, such as:

  • Total loan costs: Loans cost more than just the initial amount borrowed. There are also fees and interest to consider when comparing annual percentage rates (APRs). Federal credit union members may have access to better deals, since the most that they can charge is 18% annually.
  • Money offered: Depending on which loan provider the borrower selects, the amount approved can vary, so find out how much each lender will offer and base your decision on that.
  • Length of agreement: Every loan comes with an agreement for the repayment of the funds. While the monthly payments may be low, if the length of agreement is long, there will be more interest to pay, so it is important to consider this when shopping for home improvement loans. Borrowers can use a home improvement loan calculator to decide the best agreement for them.
  • Possibility of using a co-signer: There are several lenders that will allow borrowers to use a co-signer with a better credit score for their home improvement loan, which allows them to access more funds with reduced interest rates, as there is now a secondary person to help repay the loan.

What Are the Rates for Home Improvement Loans?

The rates for home improvement loans can vary from 5.99% up to 35.99% annually. This rate is determined by the borrower’s credit report and what their debt-to-income ratio looks like.

The following rates are what is currently available for most home improvement loans, depending on the borrower’s credit scores:

  • Excellent credit score (720-850): Average APR is 11.8%
  • Good credit score (690-719): Average APR is 17.4%
  • Fair credit score (630-689): Average APR is 23.4%
  • Bad credit score (300-629): Average APR is 28.7%


What Are the Home Improvement Loan Options?

There are several options available to those looking for financial assistance for a home improvement project. Government programs, home equity loans, refinancing with a cash out policy, and home improvement loans are some of the available options to help borrowers take care of their home’s needs. Here are more details about home improvement options available to borrowers:

Federal Programs: Government financial assistance programs have been created for the betterment of their citizen’s homes. Currently, The Federal Housing Administration has set up the Title 1 Loan and the Energy Efficient Mortgages to help people better their homes. These can help make repairs and upgrades more cost-effective, so if borrowers can meet their specific requirements as noted on the U.S. Department of Housing and Urban Development’s website, they can be a great benefit.  

Home Equity Lines of Credit (HELOCs) & Home Equity Loans: With home equity loans and HELOCs, they depend on the value of your home and how much of the mortgage the borrower has left to pay as collateral. Because a borrower’s home is used as security, these loans offer low interest rates and longer repayment times. However, if you miss repayments, they can take out a lien on your home, which they can then seize, if you continue to neglect repayments.

Refinancing Your Home: Refinancing your home can give you the extra cash you need to complete your upgrade or renovation project. If you have good credit and an increased income, this may be a good solution, but there will be more to pay on your mortgage. The ideal time to consider this possibility is if your existing mortgage rates are more than what the average mortgage rates are.

Credit Cards: Depending on the benefits that come with your credit card, putting smaller home improvements costs on them can be the simplest solution with a variety of bonuses. In this case, the best use of a credit card is when the project’s expenses will not max out their limit. Having a credit card with cash back or other reward programs may be an incentive as well.


FAQ About Home Improvement Loan

How do home improvement loans work?

Home improvement loans are a variety of unsecured personal loans. These loans come with an agreement regarding interest rates and a maximum of 12 years to repay the loan in full. Since home improvement loans do not require collateral or assets as security, they require borrowers to have a good credit score and history. A home improvement loan calculator can be used to determine what the total costs of this loan will be for your situation.  

What is the best option if I need funds for a home improvement project?

There are several options available for those needing home improvement funds, depending on what your situation is. Depending on the amount needed, what your credit score is, and how much your home is valued at may impact which type of loan you are eligible for.

Home improvement loans from traditional banks and credit unions are the most commonly used loans for home upgrades and repairs, but there are also HELOCs, home equity loans, and federal programs that can provide you funding depending on your circumstances. Refinancing your home is another popular solution for accessing more cash that can be used to increase your home’s value.

What is the rate for a home improvement loan?

The rates for home improvement loans start at 5.99% with a maximum of 35.99% depending on the borrower’s credit report and history. The higher your credit score and income is, the cheaper your overall loan costs will be.

What factors should I consider when shopping for home improvement loans?

If you are searching for a home improvement loan, the main factor that should be considered is what the total cost of the loan will be. Personal loans can allow for the best rates and APRs, and can still provide borrowers with the funds they need. Pre-qualifying lenders can help borrowers determine how much money they will be approved for, without impacting their credit scores.

Ready to apply for a home improvement loan online? Click here and apply.

Still have questions about unsecured personal loans in Canada? Contact a Lend for All representative for more information.


Lend For All     1 King St W Suite 4800 -24 Toronto, ON M5H 1A1   |  +1 800-532-4505

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