A certificate of deposit (CD) can be a useful tool for saving money for an upcoming goal. The downside is that you need to wait until the CD matures in order to access your money. If you withdraw some or all of your funds early, you typically get hit with a hefty penalty fee.
If you’re in a pinch and need cash quickly, however, you may be able to get a CD loan. Also known as a CD-secured loan, this is a type of personal loan that uses the value of a CD account as collateral. CD loans are offered by some banks and credit unions. Typically, the lender needs to be the same institution that holds your CD. (Note: SoFi doesn’t offer CD loans at this time, but we do offer unsecured personal loans.)
Here’s a closer look at how CD loans work and how they stack up against unsecured personal loans.
Key Points
• A CD loan uses the value of a CD as collateral.
• CD loans can have lower interest rates than unsecured loans.
• Borrowers can typically borrow up to 100% of the CD’s value.
• Funds in the CD are frozen until the loan is repaid.
• CD loans can help build credit through on-time payments.
What Is a CD Loan?
A CD loan is a type of personal loan that is secured by the money you have in a CD. Since the collateral lowers the risk for the lender, these loans can be easier to qualify for and have lower interest rates than unsecured loans. However, if you don’t repay the loan, the bank can take the money out of your CD to cover their losses.
Of course, to get a CD loan, you need to have a CD, which is a type of savings account that pays a fixed interest rate over a set amount of time, or term. You must leave the money untouched for the CD term, which can range from three months to five years. If you withdraw your funds before the end of the CD’s term, you usually have to pay an early withdrawal penalty. CDs generally pay a higher annual percentage yield (APY) than regular savings accounts. And the longer the CD’s term, usually the higher the APY. Similar to other types of savings accounts, CDs come with FDIC protection, up to the applicable limits.
If you take out a CD loan, the lender will charge interest. So you’ll be earning interest on the CD but paying interest on the CD-secured loan. In some cases, a bank or credit union will set the minimum annual percentage rate (APR) on their CD loans at 2% over the CD rate. So if your CD pays 3.00%, your CD loan rate would start at 5.00%. Your actual rate would depend on your credit and the term of the loan, among other factors.
How much you can borrow with a CD-secured loan depends on the lender. Often, you are able to borrow up to 100% of the value of your CD principal. The term of the loan can generally be as long as the term of the CD.
While you can typically access money in a CD if absolutely necessary and pay a penalty, that may no longer be the case if you get a CD loan. Typically, the funds being used as collateral are sealed even in the event of an emergency.
Who Might CD Loans Be Right For?
The idea of paying interest on a loan backed by an interest-bearing CD may seem counterintuitive. However, there can be some logical reasons for taking out a CD-secured loan. One is that you may be able to build your credit by taking out a CD loan and then making a series of on-time payments on the loan. More common ways to do that include getting a secured credit card or becoming an authorized user on another person’s credit card. But if those options aren’t available, and you have a CD, you might use a CD loan for that purpose.
Another reason you might opt for a CD loan is that you need access to your funds for an emergency before it matures. However, you’ll want to first check what your CD’s early withdrawal penalty is. It might be cheaper and easier to simply break open a CD early and pay the penalty. However, if the penalty would be more than what you’d pay in a CD loan’s fees and interest, you might consider a CD loan.
Before taking out a CD loan, it makes sense to weigh the pros and cons.
CD Loan Pros
• Lower interest rates. CD-secured loans often have lower interest rates compared to credit cards and unsecured personal loans, making them an attractive option for borrowers seeking lower borrowing costs.
• Building credit. CD loans offer an opportunity to establish or improve your credit history if you currently have limited or no credit.
• Retaining CD benefits. Despite using the CD as collateral, you can still earn interest on the deposited amount.
• Fast access to funds. If you apply for a CD loan with the bank or credit union that holds your CD, you can often get approved quickly and receive funds within a day or two.
• Good for those with bad credit. Borrowers with poor credit often qualify for CD-secured loans.
CD Loan Cons
While CD loans have their benefits, there are also some drawbacks to keep in mind.
• Frozen funds. The funds in the CD are tied up as collateral, limiting access to the money until the loan is repaid.
• Potential loss of CD. If you default on the loan, the lender can seize the CD, resulting in the loss of the deposited funds.
• Limited loan amount. CD loans are typically limited to a percentage of the CD’s value, which might not meet your full borrowing needs.
• Fees. Your bank may charge fees, such as an origination fee, for issuing you a CD loan.
• Hard to find. CD loans aren’t as common as other types of personal loan, so your bank or credit union may not offer them.
CD Loan vs Personal Loan
While CD-secured loans and unsecured personal loans have some similarities, they also have some significant differences.
With both types of loans, you typically get a lump sum of money up front and can then use those funds for virtually any type of expense. Both also typically offer fixed interest rates and a set repayment term so payments are easy to predict and budget for.
Unlike a personal loan, however, a CD-secured loan can be hard to find. Also with a CD loan, you need to put your savings on the line to secure the loan. With an unsecured personal loan, you don’t need to provide any funds or personal assets as collateral, making them accessible to borrowers without a CD or other assets.
CD loans also tend to have lower interest rates than unsecured personal loans due to the collateral, while personal loans tend to offer more flexibility in loan amount and repayment terms.
CD loans can be a viable option for someone who has a certificate of deposit and needs access to funds while keeping their deposited amount intact. The lower interest rates and potential credit-building opportunities make CD loans attractive for some borrowers.
However, these loans aren’t widely available, and the cost of the loan could potentially exceed the CD’s early withdrawal fee. Also, you could lose the money in your CD if you have difficulty making payments. It’s crucial to weigh the pros and cons, consider your personal financial goals and needs, and compare loan options before deciding on the best borrowing solution. (Note: SoFi doesn’t offer CD loans at this time, but we do offer unsecured personal loans.)
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
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FAQ
Where can I get a CD loan?
CD loans are typically offered by banks and credit unions. It’s best to start by contacting your current financial institution to inquire about their CD loan options. They can provide you with specific details about their loan terms, interest rates, and application process. Typically, you need to take out a CD loan from the same institution that holds your CD.
What are CD loan interest rates?
CD loan interest rates vary depending on the lender, current market conditions, and your qualifications as a borrower. Rates tend to be lower than those of unsecured personal loans, since the loan is backed by the funds in the CD.
Some banks and credit unions will set the minimum annual percentage rate (APR) on their CD loans at 2% over the CD rate. So if your CD pays 3.00%, your CD loan rate would start at 5.00%. Your actual rate would depend on your credit and the term of the loan, among other factors.
Do you get money back from a CD loan?
When you take out a CD loan, you do receive money from the lender. However, it’s important to note that the funds received are borrowed money that you are obligated to repay, typically with interest. The funds from the loan are separate from the funds you have deposited in a certificate of deposit. The CD itself remains intact and continues to earn interest, but it is held as collateral until the loan is repaid. Once the loan is fully repaid, you regain full access to your CD and any interest it has earned during the loan term.
About the author
Rebecca Lake
Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.
Photo credit: iStock/PeopleImages
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
As the cost of college continues to rise, many students turn to private student loans to help cover expenses not met by federal aid. However, securing these loans can be challenging without a strong credit history or steady income. That’s where parents often come in — as cosigners.
While cosigning can help a student access the funding they need, it also comes with serious financial responsibilities. Keep reading to learn the key considerations parents should weigh before agreeing to cosign a student loan.
Key Points
• Cosigning for student loans is often necessary due to students’ limited credit history, with about 90% of private undergraduate loans requiring a cosigner.
• The decision to cosign involves considering potential risks, such as impacting personal finances and the possibility of strained family relationships if repayment issues arise.
• Alternatives to cosigning include pursuing federal financial aid, scholarships, and encouraging students to build their own credit history through responsible financial practices.
• Parents can opt for a Direct PLUS Loan, allowing them to cover educational costs directly, but they bear full responsibility for repayment, often at higher interest rates.
• Exhausting all federal aid options is crucial before considering private loans, as they can help fill educational funding gaps while avoiding unnecessary financial burden.
Why Are Student Loans Cosigned So Often?
It’s no secret that the cost of college education has skyrocketed. Consider these statistics:
• The average cost of college has doubled since the year 2000.
• The current average cost for one year of college at a public institution is $38,270, including living expenses. Average tuition and fees at four-year in-state colleges is $9,750; for out-of-state students, it’s $28,386 per year.
• For a private, nonprofit university, that number rises to $56,628 on average, with tuition and fees accounting for $38,421 of that sum.
There are many kinds of funding and different types of student loans to contemplate when budgeting for college. When savings, federal student loans, federal work-study, and scholarships or grants can’t fill the gap, students may look to private lenders to help them cover the rest.
Unfortunately, students just starting out usually don’t have the credit history needed to get a loan from a private lender, so cosigners sometimes step in.
But do students have to have a cosigner for a private student loan? Almost always. Since many lenders won’t lend money to young adults with no or little credit history, they typically require cosigners. Roughly 90% of all private undergraduate student loans have a cosigner.
What Are the Downsides to Cosigning My Child’s Loan?
If you’re looking to privately fund your child’s education costs, it means you likely need the help to pay for college, just like many Americans do. But cosigning for your child’s private student loan is not without potential repercussions. Think over the following:
• When wondering if you should cosign a student loan, consider your relationship with your child. If something goes wrong — missed payments, extended unemployment, or worse, default — the potential for financial stress could create the possibility of misunderstandings and hurt feelings. If your relationship with your child is already tenuous, bringing financial stress into it will likely not help.
• Cosigning could put your own finances at risk. You may have the most responsible young adult in the whole state, but if something goes awry and the loan goes into default, the lender may sue you or hire a collection agency to try to recoup the debt.
A student loan default might also tarnish your credit score. Simply signing the loan also affects your score. Even if you’re not the one making payments, you’re still responsible for the loan, according to the major credit bureaus.
Do parents have to cosign student loans? Not necessarily. Below are some options to think over instead of cosigning your child’s student loans.
Fill Out the FAFSA®
Filling out the Free Application for Federal Student Aid (FAFSA®) is the first step to figuring out how much federal (and frequently state) financial assistance your child is eligible for. You’ll add your financial information that will determine the amount of federal assistance, which includes Direct Subsidized Loans, Direct Unsubsidized Loans, and other student aid from the federal government, like grants and work-study.
Some states and colleges also base merit aid on FAFSA information, so the application is an important one for all types of financial aid, not just federal.
Help Them Establish Their Credit Score
There are also some other pathways to consider when trying to find loans without a cosigner. One good idea is to have your child start building their credit history. A credit score is typically enhanced over time as the record of their successful payments grows, along with other factors like their outstanding debt, credit mix, and more. A couple of pointers:
• Your student might start by either getting a secured credit card at a credit union or other financial institution, then showing they can make timely monthly payments on a purchase.
• If your student is trustworthy and mature, you could also consider adding them as an authorized user to a credit card you already have. You’ll be responsible for making the monthly payments, but they could benefit from your financial behavior.
Look into Scholarships
The FAFSA will help colleges determine what federal student aid, scholarships, and grants your child might qualify for, but don’t let your student stop there.
Merit scholarships come in all sizes and from diverse sources, including local and national organizations, heritage associations, and various writing and other contests sponsored by nonprofits and other organizations. It might help to look at groups that your family might be closely associated with, such as unions, professional associations, or alumni organizations.
Keep in mind that your child can apply for scholarships while they are still in college, because some are tied to college majors, and your student is likely to have settled on a major after the first year or two. This could open up scholarship options that couldn’t be considered before they declared a major.
Create a Budget
You might also be able to forego cosigning a student loan by making strategic decisions about education costs. Can your student reduce the overall cost of college by ditching the meal plan, living off campus, or even attending a significantly less expensive college?
Or, instead of paring down expenses, maybe your student could consider boosting their income to avoid the need for a cosigner on a student loan. One idea might be to start a low-cost side hustle. Another could be to take a year off to work — this may be enough to close the gap, avoiding the need for a loan altogether.
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Consider Parent Loans
Parents who don’t mind shouldering more of the cost can also take out their own federal student loans with the Direct PLUS Loan, sometimes referred to as a “parent PLUS loan.”
Even though your student benefits from the loan, they are not the borrower, and you’ll be solely responsible for paying it back. Some parents may consider working out a repayment arrangement between themselves and their student. If this will be the expectation, however, it’s a good idea to discuss the arrangement with your student before taking out this type of loan.
Direct PLUS Loans can also be taken out by graduate or professional students. Whether a parent or a graduate student, there is a downside for the borrower. The interest rate for Direct PLUS Loans is often higher when compared to other federal student loans — 9.08% for the 2024-2025 school year versus 6.53% for Direct Subsidized Loans and Direct Unsubsidized Loans.
Deciding whether to cosign on a student loan is a significant financial commitment that requires careful consideration. While cosigning can help a student qualify for a loan and potentially secure better terms, it also means the parent is equally responsible for repayment.
If a parent is not wanting to cosign, students can look into other financing options, as well. This includes cash savings, scholarships and grants, federal student loans, and private student loans.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
FAQ
What does it mean to cosign a student loan?
Cosigning a student loan means a parent or other adult agrees to take equal responsibility for the loan. If the student fails to make payments, the cosigner is legally obligated to repay the debt.
Why might a student need a cosigner for a loan?
Many students have little or no credit history or income, which can make it hard to qualify for a private student loan on their own. A cosigner with good credit helps improve their chances of approval and may result in lower interest rates.
What are the risks of cosigning a student loan?
The biggest risk is that if the student misses payments, the cosigner’s credit could be damaged, and they would be responsible for repaying the loan. It can also affect the cosigner’s ability to qualify for other credit, like a mortgage or car loan.
SoFi Private Student Loans Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Laundry rooms are important, but they’re often not the prettiest of rooms. They also tend to be sandwiched into small spaces or hidden in inconvenient areas of the home. No wonder some homeowners consider remodeling them.
But whether you should undertake a laundry room remodel depends on the size of the space, the kinds of new appliances you want to install, and any special décor touches you’d like to add, among other factors.
A remodel might be worth it if it creates a perky and efficient space or a room that has multiple functions.
Key Points
• For a successful laundry room remodel, be sure to consider project scope, room usage, budget, and whether you want to do it yourself or get professional help.
• A remodel can enhance efficiency, add value to the home, and provide functionality for various nonlaundry household needs.
• You can maximize space with wall hooks, under-cabinet rods, and multifunctional furniture.
• DIY tasks include painting and putting up shelving, while professional help is needed for moving water lines and installing new sinks or drywall.
• Financing options for a remodel include cash, home equity loans, and home equity lines of credit.
Before Starting Your Laundry Room Remodel
If you’ve been thinking about giving your laundry room a clean start, you’ve probably got a lot of ideas and inspiration swimming in your head.
Before embarking on your project, think through what you’re hoping to accomplish by asking yourself the following questions.
What’s the Scope of the Project?
Some upgrades involve small improvements like new paint and cabinetry, while others call for tearing through walls, moving plumbing, or even relocating your laundry room to another area of the home.
Appliances should also be considered. Will you need a new washer and dryer, or do you plan on using the ones you currently have?
What Do You Plan to Use Your Laundry Room For?
While most laundry rooms are used solely for handling laundry, others also act as mudrooms and storage for cleaning supplies, sports gear, and bulk shopping items like bottled water, paper products, and pet food.
What your laundry room is used for will affect the laundry room remodel ideas available to you.
If you have a large family and do washing and drying frequently, that will influence the design of your new laundry room. You may need ample counter space for folding, a fold-down ironing board, or bins to hold each person’s clean clothing.
If you tend to do the laundry during the day, you might want to consider adding a window for some natural light. And if you’re more likely to wash clothes in the evening, under-cabinet lighting may help.
What Are Your Must-Haves?
Some homeowners might want bins and baskets to keep things tidy. Others may be looking to add features like a sink or build out their laundry room to accommodate more counter space.
Whatever your desire, it’s a good idea to list the elements that you can’t live without so you can build them into your budget.
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How Much Can You Spend?
The scope of your project will dictate your budget and how you plan to pay for your remodel.
Some homeowners could see a laundry room remodel as a way to increase their home’s value and opt to borrow to pay for the project. Others might choose to keep things scaled down so they don’t spend beyond what they have on hand. A home improvement cost calculator can help you figure out how much your project might run you.
Laundry Room Remodel Ideas
Now that you’ve got the foundation of your project mapped out, it’s time to envision how your laundry room remodel will take shape. That will depend on the following factors.
If You Have Limited Space
Small laundry rooms can still pack a punch, thanks to creative ways to maximize your available space. You can do that by tucking laundry baskets under counters, adding a rod under cabinets to hang clothes, and using wall space for hooks to hang laundry bags or baskets that can hold clothespins, detergent, and dryer sheets.
Don’t forget that laundry rooms don’t need to be actual rooms; if you’re short on space, consider tucking your washer and dryer into an unused closet and installing a farmhouse door for easy access.
Depending on its size, you can then use the prior laundry room as a guest room, home office, nursery, or kids’ playroom.
If You’ll Be Using the Room for More Than Cleaning Clothes
The list of ways to use a laundry room is endless, and will largely depend on each household’s needs.
• Got a large dog? You might consider installing a pet-washing station, especially if you are already planning on undertaking plumbing work.
• Need a quiet place to conduct conference calls at home? A fold-down workstation meets both communication and laundry needs.
• Larger families may tuck an additional fridge in the laundry room.
• People who love to entertain may find storage for plates and glassware in the laundry room.
Your Budget
A laundry room remodel can quickly add up if new plumbing, cabinetry, and construction work are involved.
If you find yourself running beyond what you’re willing to spend, think of creative ways to get the laundry room you want without breaking the bank.
That might entail painting cabinets instead of replacing them, using open shelving instead of custom built-ins, and opting for durable paint in place of tiled backsplashes.
💡 Quick Tip: A home equity line of credit brokered by SoFi gives you the flexibility to spend what you need when you need it — you only pay interest on the amount that you spend. And the interest rate is lower than most credit cards.
DIY vs Calling In an Expert
Many homeowners are comfortable with do-it-yourself projects. In a laundry room remodel, these might include painting, replacing cabinetry, and installing shelving and hanging rods.
Other projects — moving water lines, installing new sinks or drywall, and demolition — require hiring a contractor. Mapping out which projects you will need to outsource will affect your budget and may also affect the scope of your project.
Paying for It
Smaller laundry room remodels, like those that require just a new coat of paint or a retrofitting of shelving to maximize storage space, can be done with fairly little outlay, especially if you do it yourself or have a friend or family member lend a hand.
Larger ones, or those that call for extensive demolition, architectural work, or the services of a general contractor, will be more expensive, of course.
The size of the project — and therefore how much money you’ll need—matters, as does your timeline for paying back any loan.
Here are some options:
• Cash may be a viable choice, especially for smaller projects.
• A home equity loan allows you to draw on the equity in your house to get a lump sum upfront, which can finance larger or multiple projects.
• A home equity loan of credit (HELOC) also leverages your house equity but gives you a revolving line of credit you can draw on if and when you need it.
The Takeaway
Laundry room ideas for remodeling range from DIY tweaks to major overhauls. A laundry room remodel may increase the value of your home or simply make life a little easier. Start by listing what you want to achieve and how you’re going to pay for it.
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FAQ
Where do I start renovating my laundry room?
Begin with the big picture of your project and its purpose. Consider what you need from your laundry room. Do you want it to maximize efficiency as you wash, dry, and fold? Do you want it to double as storage space for bulk items or out-of-season coats? Do you want it to provide space where you can work on craft projects? Once you work out your needs and priorities, you can focus on the features you’ll need to make the space work for you.
How long does it take to remodel a laundry room?
The length of time remodeling your laundry room requires depends upon how extensive your remodel is, whether you need professional help or can do it yourself, and whether permits are required for the work you want, among other factors. If you’re repainting or adding a few shelves, you may be able to do it in a weekend. If you’re hiring contractors for work that involves your plumbing or electrical systems or requires them to move walls, it could take as much as four to six weeks.
How much does it cost to move a laundry room?
The price tag for moving your laundry room can vary a lot, depending on where you live and how well set up the new location is for plumbing and electricity — and, of course, what you want to have in your laundry room. The cost can run from $500 to $5,000 or more.
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²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945. All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
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A personal loan is a flexible type of loan issued by a bank, credit union, or online lender that you pay back in regular installments, typically at a fixed rate and over a set term.
Personal loans work a little differently than other types of loans. Consumer loans typically specify what the money should be spent on: Mortgages are used to purchase or refinance homes, and student loans are used to pay for an education. But with a personal loan, you can usually use it however you see fit, whether that means consolidating debt, paying off a major medical bill, or financing a wedding.
Read on to learn more about how personal loans work, including how to apply and the different types of personal loans.
• A personal loan is a flexible type of loan issued by a bank, credit union, or online lender that you pay back in regular, fixed payments over a set term.
• Personal loans can be used for almost anything. Loan amounts generally range from $1,000 to $50,000, though some lenders offer personal loans up to $100,000 or even more. Repayment terms are usually anywhere from two to seven or 10 years.
• The interest rate on a personal loan is determined by the lender and is based on a number of factors, including the applicant’s financial history, income, debt, and credit score.
• Personal loans can be used for various purposes, including debt consolidation, home improvements, wedding costs, and vacations.
• Before you apply for a personal loan, you’ll want to consider how much money you want to borrow, how much you can afford to pay each month, how long you want to make payments, and whether or not you want to put up collateral.
Personal Loans at a Glance
As noted above, a personal loan is an installment loan paid off over time. Specifically, some points to note:
• The terms is typically between a couple or up to 10 years.
• While a personal loan may be as small as $1,000 or as large as $100,000 or even more.
• It’s usually an unsecured, fixed-rate loan.
• As with most loans, the best (or lowest) interest rates tend to go to those with the best credit scores and history.
The beauty of personal loans is that once you receive the lump sum payment, you can usually use it however you see fit, whether that means putting in a swimming pool, having major dental work done, or paying for family planning, like fertility costs.
How Do Personal Loans Work?
Personal loans are typically unsecured loans (meaning you don’t have to pledge an asset to secure the loan) that provide you with money you then pay back in regular installments over the term of the loan.
How Personal Loan Funds Are Disbursed
After loan approval, the lender typically deposits the loan proceeds directly into the borrower’s bank account. The process could be completed in anywhere from a day or two to a couple of weeks.
Repaying a Personal Loan
You repay a personal loan in monthly installments that go toward both principal and interest.
Typically, personal loans are amortized. This means the total amount you owe is divided into equal monthly payments over the term of the loan. Even though the total monthly payment remains the same with fixed-rate loans, the amounts being directed to principal and interest will change each month. An amortization schedule can show you exactly how much of your payment is going towards paying down the principal and how much is being paid in interest.
Personal loans with longer terms may offer lower monthly payments, but can cost more in interest over the life of the loan. A shorter-term personal loan can have higher monthly payments, but cost less overall in interest.
How Personal Loan Interest Rates Work
The interest rate on a personal loan is determined by the lender and is based on a number of factors, including the applicant’s financial history, income, debt, and credit score. Generally speaking, the better an applicant’s credit score, the better the chance they have to receive a lower interest rate on the loan. The higher the interest rate, the more money the loan will cost over its term.
You’ll also want to keep an eye on the APR, or annual percentage rate, vs. simply the interest rate. This figure includes fees (like origination fees) and other factors. It gives you a truer picture of the cost of the loan.
Top Common Personal Loan Uses
Personal loans can be used for just about anything. That said, there are some common reasons people take out different types of personal loans, including:
The Personal Loan Application Process: Step by Step
While it’s not as simple as walking into a bank, asking for a loan, and walking out with a check, the application process for personal loans is relatively easy.
Before you apply for a personal loan, you’ll want to consider how much money you want to borrow, how much you can afford to pay each month, how long you want to make payments, and whether or not you want to put up collateral (though less common, some lenders offer secured personal loans). There may be other considerations for specific financial circumstances, which can vary from person to person.
Checking Your Own Credit
Because lenders will be looking closely at your creditworthiness, it’s a good idea to give your financial health a check-up before you begin the application process. You can get a free copy of your credit reports from the three main consumer credit bureaus — Equifax®, Experian®, and TransUnion® — at AnnualCreditReport.com.
Once you get your reports, it’s a good idea to review them carefully and report for any errors. Correcting anything that isn’t accurate means your credit report will look as good as possible to lenders.
Comparing Loans
Just like shopping around for the best prices before making a large purchase, comparing lenders’ rates and terms is a smart move before the application process actually begins.
Here are some things to look for when researching lenders:
• How much do they lend on personal loans? If the amount you need to borrow doesn’t fall within the range offered by the lender, you may need to look elsewhere.
• Do they charge any fees or penalties? Some lenders charge an origination fee equal to a percentage of the loan amount to process your application. Some personal loans also have a prepayment penalty if you pay off your loan ahead of schedule.
• How are fees and penalties charged? Some lenders may roll any fees into the loan amount, which increases the total amount you’ll owe. Other lenders may deduct the fee amounts from the loan proceeds, so the amount you receive will be lower than the actual amount of the loan.
• Can I get prequalified so I’ll know what interest rate they might offer me? Prequalification involves the lender doing a soft pull on your credit report, which will not affect your credit score. This step will give the lender a sneak peek at your financial history so they can give you an estimated interest rate. Going through this process with multiple lenders is one way to compare rates and terms you may qualify for. Keep in might, the rate quoted is an estimate and may not be what you actually are offered if you move ahead with the process.
• What if I can’t make my loan payments due to financial hardship? Missed or late payments could result in late fees, negative impacts on your credit score, or lead to your account being sent to collections. Some lenders may offer protections for borrowers who have lost their job or are having difficulty making their payments for other reasons.
Applying for a Loan
When you’ve selected a lender, it’s time to submit the actual application. For an unsecured personal loan, lenders typically require:
• A photo ID
• Proof of address
• Proof of income or employment
Each lender has different requirements, though, so it’s important to carefully read and follow the lender’s application instructions. At this stage, the lender will usually do a hard credit check, which can have a small and temporary negative affect on your credit score.
Waiting for Approval
Once you’ve submitted the application and all required documents, it’s time to play the waiting game. Rest easy, though, because some personal loan approvals happen quickly — sometimes in just a day. More complicated applications could take a week or more.
Personal loans usually range anywhere from $1,000 to $100,000, depending on the lender. Once you apply and are approved for the loan, you’ll receive the amount of money you were approved for in a lump sum, minus any origination fees that some lenders may charge. You then start paying back that money in installments which are set by the specific terms of your loan.
Types of Personal Loans
There are a variety of different types of personal loans. Factors like how much money you plan to borrow, your credit and financial history, and how much debt you already have will influence which type of personal loan is right for you. Here’s a look at some common personal loan options.
Unsecured vs Secured Personal Loans
An unsecured personal loan is the most common type of personal loan. Unsecured means the loan is not backed by collateral, like a house or car. The approval and interest rate you receive on an unsecured personal loan is mostly based on your creditworthiness.
Secured personal loans require an asset to be pledged to “secure” the loan. Think of a house when it comes to a mortgage loan, or a car when it comes to a car loan. If you fail to repay your loan, the lender can then seize the collateral.
Some banks offer secured personal loans that allow you to borrow against the equity of your car, personal savings, or other assets. Since secured loans are backed by an asset that the lender can seize if you default on the loan, they generally have a lower interest rate than an unsecured personal loan.
• Funds may be disbursed the same day or within a week
• Interest rates are typically lower compared to credit cards
• No collateral required
• Interest rates are typically lower compared to unsecured personal loans
• Can be a good way to improve credit if payments are regular and on time
• Tend to have a longer repayment period
Disadvantages
• May need to meet minimum credit score requirements for approval
• Interest rates may be higher compared to secured personal loans
• Credit score may be negatively affected if borrower defaults
• Collateral is required
• Lender can seize the collateral if borrower defaults
• Application and approval process may involves more steps
Fixed-Rate vs Variable-Rate Personal Loans
Most personal loans are typically fixed-rate loans, meaning your rate and monthly payment stay the same (or are fixed) for the life of the loan. Fixed-rate loans can make sense if you’re looking for something with consistent payments each month. A fixed-rate loan is also worth considering if you are concerned about rising interest rates on longer-term personal loans.
As the name suggests, the interest rate on a variable-rate loan can fluctuate over the life of the loan. Interest rates on this type of loan are tied to benchmark rates or indexes. Based on how the benchmark rate or index changes, the interest rate on a variable-rate loan will also change, directly affecting your monthly payment.
Generally, variable-rate loans carry lower annual percentage rates (APRs) and some have limits on how much the interest rate can rise or lower over a specific period or even over the life of the loan. A variable-rate loan could be a good choice if you are taking out a small amount of money with a short repayment term. The reason: There won’t be too many opportunities for the loan’s rate to climb.
Here are some pros and cons of variable-rate personal loans and fixed-rate personal loans. Choosing between variable vs. fixed rates will come down to personal preference and what you are approved for.
Variable-Rate Personal Loans
Fixed-Rate Personal Loans
Advantages
• Loans often start out with a lower interest rate compared to fixed-rate loans
• If benchmark rate goes down, interest rate on the loan also goes down
• Flexible
• Monthly payments are consistent
• Can avoid rising interest rates
• Easy to understand
Disadvantages
• If benchmark rises, the cost of the loan also rises
• Borrowers have a greater risk of defaulting on loan if the interest rate increases significantly
• As interest rates change, so will the monthly payment
• Won’t be able to take advantage of changes in interest rates
• Interest rates tend to be higher compared to variable-rate loans
• May pay more over time if you took out your loan when interest rates were high
Small vs Large Personal Loans
Just as personal loans are taken out for a variety of reasons, the dollar amount borrowed can vary, too.
A small personal loan, which is generally for $3,000 or less, typically has a lower APR than other types of short-term debt, such as payday loans. Many banks and other financial institutions have limits on the minimum amount they’ll lend. Some credit unions may offer alternatives to payday loans in an effort to help their members save money and avoid being stuck in a cycle of debt.
A large personal loan might be used to pay for major expenses such as home repair or remodeling, medical expenses, or an expensive life event, such as a wedding. Some lenders offer personal loans up to $100,000 or more.
It’s important to keep in mind your ability to repay the loan when deciding how much to borrow. Here’s how small and large loans compare:
Small Personal Loan
Large Personal Loans
Advantages
• Can use the money for a wide variety of purposes
• Interest rates are typically lower compared to credit cards
• Usually has better terms than payday loans
• Can use the money for a wide variety of purposes
• Greater ability to combine multiple credit card balances into one balance
• Can be a good way to improve credit if payments are regular and on time
Disadvantages
• Can often get a better interest rate with a larger loan
• No grace period
• Lenders may limit how much you can borrow
• The larger the loan, the more debt you’re taking on
• Increases your debt-to-income ratio
• Lenders may limit how much you can borrow
What Personal Loan Lenders Look at in Your Application
When you apply for a loan, the lender typically considers your credit score, debt-to-income (DTI) ratio, and other factors.
Credit Score
A person’s credit score shows lenders what the theoretical likelihood of that person paying back a loan would be. Generally, the lower a person’s credit score, the more of a risk they are assumed to be. Conversely, the higher a person’s credit score, the lower a risk they are assumed to be — and the more likely they are to be approved for lower interest rates and higher loan amounts.
If your credit score isn’t ideal, you might still qualify for a personal loan for bad credit, though you may face higher interest rates and stricter repayment terms. Some lenders specialize in offering options for borrowers with lower credit scores, providing a pathway to access the funds you need.
Debt-to-Income Ratio
Your DTI is a percentage that tells lenders how much money you spend on monthly debt payments versus how much money you have coming into your household. You can calculate your DTI by adding up your monthly minimum debt payments and dividing it by your monthly pretax income.
Lenders generally want to see a DTI of 35% to 40% or less but may make exceptions if you have good credit.
Income and Employment History
Having a steady work history and a rising salary can help you appear less risky to a lender than someone who has been in and out of the job market and has seen ups and downs in their earnings.
Credit History
Lenders will review your credit report for anything that might stand out as a risk for them. If there are a high number of inquiries and/or late payments on your credit report or if there were multiple debt accounts opened in a short time period, that might indicate high risk to a lender. Borrowers who are considered high-risk may find it more difficult to get a loan and could pay higher interest rates.
Is a Personal Loan Right for You?
Not sure whether a personal loan makes sense for your situation? Here are some questions to ask yourself:
• Do I need the money quickly? If you do, then a personal loan might be a smart move.
• Can I afford the monthly payments? Before you take on any debt, it’s important to set a realistic plan on how you’ll repay what you owe.
• Do I already have a high amount of debt? Taking out a personal loan when you have significant debt can put a serious dent in your budget and savings goals. It can also increase your DTI, which lenders look at when reviewing your loan application.
• Do I have a bad credit score? If your credit score isn’t so great — FICO® defines bad as 579 or below — then you may want to wait on taking out a loan and instead work on your credit.
• Does a personal loan offer the lowest interest cost of all the options available? It’s a good idea to shop around for the rate and terms that best fit your needs before you apply with a lender.
There may be times when you need help covering a big expense, but taking out a personal loan isn’t the best choice. Fortunately, there are alternative funding options. Here are a few you may want to explore:
Credit Cards
Like personal loans, credit cards offer a line of credit that can be used for a wide range of purposes. You may want to consider using a credit card if you have a smaller expense that you can pay off quickly. Just be cautious as interest rates can be significant, especially if you don’t pay it off soon.
Home Equity Line of Credit
If you own your home and have at least 20% equity, you may be able to get a home equity line of credit (HELOC). This option could be a smart move if you need to borrow a large amount of money or plan on having ongoing expenses, like those with a remodeling project.
401(k) Loan
If you have a financial emergency or want to pay off high-interest debt — and no other option is available — then you may want to consider borrowing from your 401(k). Keep in mind that you may face taxes and penalties when you withdraw the money, so be sure you understand how your plan works, what is allowed, and how soon you’d have to pay back the loan and with how much interest.
💡 Quick Tip: While HELOCs may require an appraisal before you get approved, a SoFi home improvement loan does not. That means you can get approved and funded the same day.*
The Takeaway
Personal loans can offer flexibility when you’re looking for funds for a variety of uses, and they typically have lower interest rates than credit cards. Depending on your financial needs and financial circumstances, there may be a personal loan that fits. Comparing multiple lenders is a good way to make sure you’re getting a personal loan that works for you.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.
FAQ
How do personal loan payments work?
When you take out a personal loan, you agree to repay the borrowed amount plus interest over a set period, usually through equal monthly payments. Each payment consists of a portion that goes towards reducing the principal balance and another portion that covers the interest charges. The loan agreement will specify the amount of each payment, the duration of the loan, and the interest rate.
What are the risks of a personal loan?
Personal loans come with certain risks that borrowers should be aware of. One risk is defaulting on the loan, which can lead to late fees, damage to your credit score, and even legal action from the lender. Another risk is needing to take on additional debt if you borrow more than you can afford to repay. In addition, personal loans may have higher interest rates compared to secured loans like mortgages or auto loans. It’s important to carefully consider your financial situation and ability to repay before taking on a personal loan.
Is a personal loan bad for your credit score?
A personal loan itself is not inherently bad for your credit score. In fact, when managed responsibly, a personal loan can have a positive impact on your credit. Making timely payments and paying off the loan as agreed can demonstrate your ability to handle debt responsibly, which can build your credit profile. However, if you miss payments or default on the loan, it can have a negative impact on your credit. It’s important to borrow within your means, make payments on time, and consider the impact on your credit score before taking on a personal loan.
Does personal loan money go to your bank account?
Yes, when you are approved for a personal loan, the funds are typically deposited directly into your bank account. This allows you to have speedy access to the loan amount. The specific timeline for receiving the money may vary depending on the lender and the loan application process.
Do you get money right away from a personal loan?
The timing of receiving money from a personal loan can vary depending on the lender and their processes. Typically, you receive the money within five to seven business days of approval, and some lenders even offer same-day funding. Others can take a couple of weeks. Check with the lenders you are considering.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945. All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee. Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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Thinking about installing a new deck, replacing a front door, or even adding an extra bedroom to your home to help increase its resale value? Considering that your home is one of the biggest investments you’re likely to ever make, it makes sense that you’d be interested in increasing its value with some upgrades.
But as you probably guessed, not all remodeling projects provide the same return on investment (ROI).
Using Remodeling Magazine’s Cost vs. Value 2024 report, which compares the average cost of 23 remodeling projects in 150 housing markets, let’s look at some of the most popular home improvements based on estimated ROI, time commitment, and cost.
Key Points
• Replacing a garage door offers the best return on investment, recouping 193.9% of costs.
• A steel entry door replacement returns 188.1% of costs, enhancing security and aesthetics.
• Adding manufactured stone veneer to the exterior boosts home value by 153.2%.
• A minor kitchen remodel, including new sink and cabinet fronts, recoups 96.1% of costs.
• Installing a wooden deck returns 82.9% of the investment, adding outdoor living space.
Things to Consider Before Starting a Home Improvement Project
It’s important to note that national averages only tell part of the story. Labor and supply costs, styles, and consumer preferences can vary by location. So before you dive into a project, you might want to consider hiring a contractor, real estate agent, or appraiser to come to your house and give an opinion on which upgrades might provide the most value based on where you live.
You may also want to factor in any immediate needs that a remodeling project can help satisfy. Let’s say, for instance, you’d like to add an extra bathroom. While you may only recoup part of your expenses, having an additional washroom may be worth the cost of a renovation.
Top Home Improvement Projects to Help Increase Your Home Value
Looking to prioritize your wish list? These remodeling projects earned top spots on the Cost vs. Value report.
Garage Door Replacement
Average Cost: $4,513
Resale Value: $8,751
Costs Recouped: 193.9%
General Time Commitment: A few days
Removing an old garage door and replacing it with an attractive, sturdy new one could return every dollar of your initial investment — and then some, according to the Cost vs. Value report. It’s an effective way to improve your home’s appearance from the outside while increasing your home’s functionality for years to come.
With an average cost of $4,513, which includes the door and the cost of labor, it’s also a relatively affordable renovation. While most homeowners would likely hire someone to help install the new garage door, it is something that you could potentially do on your own (with the help of a friend) over the course of a weekend.
If you hire someone to install the door for you, they will likely come to your home twice: first, to take measurements and give you a quote, and then again to install the door.
Entry Door Replacement (steel)
Average Cost: $2,355
Resale Value: $4,430
Cost Recouped: 188.1%
General Time Commitment: One week
A new, safe front door is an attractive quality to prospective homebuyers. Replacing your entry door and jambs with a steel door, “including clear dual-pane half-glass panel, jambs, and aluminum threshold with composite stop,” should get you a good bang for your buck, according to the Cost vs. Value report.
Even better, you and a friend can probably handle installation on your own, though you can certainly hire an installation expert. If you decide to go the pro route, they’ll likely need to come to your home to take initial measurements and then return for the installation. Another option is to measure and order the door yourself and just get help with the installation.
Removing the vinyl siding and adding a stone veneer to the bottom third of your home’s street-facing façade is an effective way to help increase the value of your home, returning 102.3% of the cost of renovation. First impressions matter when it comes to selling a home, and stone veneer is a popular look right now.
Whether you tackle this project yourself or hire a handyperson to help with the installation, this project will take several days to complete. If you choose to hire someone, understand that the construction days might not be successive, so the exterior of your home could be under construction for several weeks to a month or longer.
Minor Kitchen Remodel (Midrange)
Average Cost: $27,492
Resale Value: $26,406
Cost Recouped: 96.1%
General Time Commitment: Four to eight months
When it comes to kitchen remodels, less may be more, at least when it comes to ROI. According to the Cost vs. Value report, major kitchen remodels recoup anywhere from 38% to 49.5% of costs. Meanwhile, a smaller upgrade recoups 96.1% of costs.
What does a minor remodel include? Think faster-turnaround jobs like installing a new sink and faucet or replacing items like cabinet fronts, cooktop, oven range, refrigerator with new models, countertops, or floors.
When creating your budget, you’ll probably want to factor in the cost of expert help, such as an electrician, plumber, and contractor. You’ll also want to be realistic about how long you can devote to the project — and be without a working kitchen. Expect several months at minimum for a remodel.
Wood Deck Addition
Average Cost: $17,615
Resale Value: $14,596
Cost Recouped: 82.9%
General Time Commitment: Three to six months
Nothing beats enjoying family and friends on a deck in your backyard on a sunny day. Potential buyers are typically rightfully happy to pay extra for a deck, and a wooden deck installation could recoup half of what you spend. And ideally, you’ll get the chance to enjoy the deck before you sell your home.
A deck installation is a pretty large project. It will likely need to pass an inspection and adhere to your city’s building codes, and it could increase your property taxes and home insurance costs. So it pays to get the job done right the first time, which may mean enlisting the help of a designer or architect. These pros can map out an initial plan, and a contractor can handle the building.
An online home renovation cost calculator can help provide you with a rough idea of how much a wooden deck — and any other home upgrade project — could cost.
HVAC Conversion/Electrification
Average Cost: $18,800
Resale Value: $12,422
Costs Recouped: 66.1%
General Time Commitment: Anywhere from 1-2 days up to several days, depending on whether your home requires structural changes
Replacing a fossil fuel-burning HVAC system with one that runs on electricity isn’t cheap. Nor is it one to try to DIY. But according to the Cost vs. Value report, you could stand to get back roughly two-thirds of what you put in. Homeowners who decide to make the conversion may also notice a savings in their heating and cooling bills. And there are environmental benefits to consider as well.
Unless you’re a licensed HVAC technician, this is a project best suited for the professionals. Consider speaking with a few different HVAC installation teams to compare potential systems and cost options.
Remodeling Projects With the Lowest Potential ROI
While these upgrades may not deliver the biggest returns, they could still be worth exploring if they fit your budget and lifestyle needs.
Primary Bedroom or Bathroom Addition
Average Cost: $164,649 for midrange; $339,513 for upscale
Resale Value: $58,484 for midrange; $81,042 for upscale
Cost Recouped: 35.5% for midrange; 23.9% for upscale
General Time Commitment: Four to eight months
Adding on a primary bedroom or bathroom may enhance your living experience, but it might not add much to your bottom line. Despite the project’s hefty financial and time commitment, it generally fails to deliver even one-third of the investment.
However, while not a great return, a home addition project of this size could change to the value of your home. For example, a $300,000 home that adds a primary suite for $164,649 could potentially return about $58,000 on the investment. A home that sells for $358,000 instead of $300,000 is a 19.3% increase in the home’s value. If you were to get enough use from the addition to justify the other cost you can’t recoup, it could still be a fine investment.
Again, these figures are purely hypothetical, and the value of expanding your home can depend on a multitude of factors. And if you decide to move ahead with a primary bedroom or bathroom addition, you’ll want to think through how you’ll finance the project. Some options include applying for a home improvement loan, using home equity, dipping into your savings, or using credit cards.
Average Cost: $58,586 for midrange; $107,477 for upscale
Resale Value: $20,334 for midrange; $34,997 for upscale
Cost Recouped: 34.7% for midrange; 32.6% for upscale
General Time Commitment: Four to eight months
A bathroom remodel tends to be cheaper than a primary bathroom addition, and it generally sees a slightly better potential ROI. But again, a bathroom addition or any large remodeling project should be considered in terms of both ROI and what you want to get out of your home while you are living in it. And that’s a calculation that only you and your family can make.
The Takeaway
Home renovation shows make upgrades look quick and easy. And while sometimes they can be, in many cases, renovations can be costly and time-consuming. As you consider which ones to make, you will likely want to factor in your return on investment (ROI).
Not all remodeling projects provide the same level of ROI. Projects such as replacing a garage door or adding a stone veneer to your home’s façade tend to see better ROI than adding an extra primary bedroom or bathroom. But ROI is only one consideration. You should also need to consider what you want to get out of your home and whether the time and cost of taking on a big project are worth it.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.
FAQ
What home improvements offer the most value?
According to the Remodeling Magazine’s Cost vs. Value 2024 report, the top three home improvement projects that have the best ROI are: replacing the garage door (193.9% of costs recouped), replacing the entry door with a steel version (188.1% of costs recouped), and adding manufactured stone veneer to the home’s exterior (153.2% of costs recouped).
Which home improvement is least likely to increase the value of your home?
Wallpapering, built-in electronics, wall-to-wall carpeting, and a swimming pool are examples of projects that typically don’t increase the resale value of your home.
Does new flooring increase home value?
New flooring can potentially boost the value of your home, especially if your current flooring is worn or in poor condition. Hardwood flooring often provides significant ROI, though luxury vinyl plank and tile flooring can also add value.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
