How to use our home improvement loan calculator

Our remodeling loan calculator is designed to help you budget for your upcoming home improvement or repair project. Knowing your monthly payments helps you incorporate your project into your broader financial plan. This planning is especially important if your project is a repair, and you need to unexpectedly find a home repair loan.

Using our home improvement loan calculator is straightforward: enter the amount you need, your loan’s term (the length of time you’ll be paying back the loan), and your expected Annual Percentage Rate (APR) to see your monthly payment.

Not sure which APR to enter?

We’ll take a guess for you based on your credit score. Select one of the credit score options, and our calculator will estimate your APR on an unsecured loan (home improvement loans that do not require home equity). Odds are your APR will be lower if you pick a remodeling loan option that does require home equity.

Using our home improvement loan calculator is easy. The hard part is knowing what to enter for each section–you want an accurate monthly payment after all.

That’s the focus of the rest of this article. We’ll show you how to pick the right loan amount, term, and APR to enter into our remodeling loan calculator.

How big should you make your home improvement loan?

Asking for the right amount of money is an important part of financing your home improvement project. To figure out the right size loan, you need to consider three things:

  • The cost of your home remodel

  • The amount of fees you’ll pay

  • The amount of interest you’ll pay

Let’s take a look at each of these factors, so you can figure out how to put the right amount of money into our home improvement loan calculator.

How much will your home remodel cost?

This is the most common problem people think of when figuring out how big of a remodeling loan to take out. They research online or talk to a professional to get an estimate, then request that amount.

Getting this number right is important because the type of loan you need, and whether you’ll get approved, depends in large part on how much you need. Here’s how you can figure out how much your project will cost:

  • Research your project online: You can get a rough estimation by looking at cost data online. Remodeling Magazine’s Cost vs. Value Report has regional cost data for several common home improvement projects. We recommend looking at as local information as possible, as remodeling costs vary across regions.

  • Get a home inspection: For major projects, you'll want to get an inspection to make sure that your remodel won’t uncover any unexpected, costly, issues.

  • Ask for estimates from multiple professionals: Get estimates from at least 3 professionals before beginning your project to get a realistic idea of costs. You can use sites like BuildZoom to find local contractors in your area.

  • Add a cushion for unexpected costs: No matter how much you plan, you’ll inevitably face unexpected costs during your renovation. We recommend adding a 10-15% cushion to your budget just in case.

Once you figure out how much you need to pay for your project, you should be able to narrow down your choice of how much to ask for in our home renovation loan calculator.

In general, you’ll want to look at cash or credit cards for small projects, personal loans for moderate projects like a new roof or kitchen, and home equity loans or lines of credit for bigger remodels.

What will you pay in fees?

You also need to factor fees into your loan request. When budgeting for your home renovation, it’s important to remember that you also have to pay fees and interest.

Sometimes, lenders will take fees out of your loan before transferring money into your bank account. For example, if you take out a $10,000 loan with a 3% origination fee, you’ll only get $9,700 in your bank account.

Not accounting for fees could lead to some nasty surprises where you borrow money, only to realize you didn’t get enough to cover the cost of your project.

Different home improvement loan options have different fees. For example, personal loans usually have a 1-5% origination fee; home equity loans and lines of credit also have closing costs.

You can learn more about fees in our complete guide to home improvement loans.

What will you pay in interest?

When budgeting for your home improvement project, you also need to factor in interest expenses. We’ll discuss these a lot more in the next section.

Which APR should you enter into our home remodeling loan calculator?

Annual percentage rate (APR) combines your loan’s interest rate with fees to tell you how much you’ll pay each year in interest and fees. When using our home improvement loan calculator, we recommend entering an APR as opposed to a standalone interest rate because APRs reflect what you’ll actually pay.

A few factors determine your APR:

  • Your credit score: Lenders want to know how likely you are to pay back a loan. The higher your credit score, the lower the APR you’ll pay. Select your credit score in the remodeling calculator, and we’ll add an estimated APR on an unsecured loan.

  • Your income and debt: Lenders also compare your income to your debt to see whether you’ll be able to afford monthly payments.

  • Your loan type: Some home improvement loans, such as personal loans, do not require home equity as collateral. In return for not requiring collateral, personal loan providers charge higher interest rates than lenders that do require collateral. That’s why interest rates on personal loans are almost always higher than those on home equity loans or lines of credit.

What term should I pick for my remodeling loan?

Your loan’s term refers to how long you’ll have to pay back the loan. Options not secured by your home equity usually have 3-7 year terms, while options secured by home equity have 15-30 year terms.

All else being equal, longer terms will lower your monthly payments.

Putting it all together

The home improvement loan calculator should be just your first step in deciding what type of loan to get, and how much to borrow. The next step depends on where you are in your planning process:

I’m just beginning to plan

If you’re just beginning to look at home improvement loans, the next step is to learn more about different options.

The homeowner’s guide to home improvement loans helps you learn everything you need to know about common home improvement loan options. We worked closely with personal finance experts to get you the best advice possible.

I’m ready to look for financing

We can help you find more personalized monthly payments than our home improvement loan calculator can show you.

You can compare rates on personal loans for home improvement through our 60 second process. We unlock over a thousand dollars in savings for many homeowners by helping them compare rates. Using Hearth to see your rates is completely free and does not affect your credit score.

See your rates here.

You may also be interested in learning more about financing for specific types of home remodels, such as roofs or kitchens.

You can learn more about financing several different types of home improvement projects by visiting our home improvement projects page.