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Adding a garage to your property can make your life easier while also adding value to your home. But building a garage can be expensive — and if you can’t afford the cost upfront, some type of financing will likely be required in order to move forward with the project.

The good news is homeowners have several options to choose from so they can get the garage they want now and pay for the project over time — including a personal loan, a home equity loan or line of credit, or a cash-out refinance.

But how do you decide which type of garage financing is best for you? Read on for a breakdown of the different options, some of their pros and cons, and how to choose the right financial product for you when you decide to build your new garage.

How Do People Afford to Build a Garage?

Most people probably can’t afford to add a garage to their home without borrowing at least part of the money for the build. And even those who have enough cash to cover the cost might not want to dip into their savings to foot the entire bill upfront.

There are several ways to finance a garage build, and the option that works best for you may depend on several factors. Before you make your choice, it can be good idea to look at:

•  How much equity you have in your home, and if you want to tap that equity for funding.

•  Your credit score nd what kind of interest rate you might be offered if you apply for a loan.

•  How long you want to make payments, and how those payments might affect your other goals.

•  How much you expect the full cost of your project to be, and how much of that you want to finance.

💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi personal loans come with no-fee options, and no surprises.

What Is the Average Amount Needed to Build a Garage?

According to HomeAdvisor, the average cost of building a garage is about $28,326. The typical price range in 2022 was between $16,424 and $40,287.

Of course, your costs may vary significantly based on the size of the garage, the materials you choose, labor costs in your area, and the type of structure you plan to build. Here’s a breakdown of what some garage projects can cost:

Carport

Average cost: $2,400 to $8,400 for one car; $4,000 to $14,000 for two cars, fully installed

A carport can be a great option if you’re looking to protect your car from the sun, snow, sleet and hail, pollen, bugs and birds, etc. A carport is typically less expensive than a fully enclosed garage.

Square footage is usually the most important factor when it comes to determining price. A fully installed (parts, labor, etc.) 12-foot-by-20-foot carport, built for just one car, averages between $2,400 to $8,400; while a two-car, 20-foot-by-20-foot carport would be around $4,000 to $14,000.

Here are some other factors that can impact the cost:

•  Whether the carport is temporary or permanent

•  The roofing and other materials used

•  Whether it’s a prefab or custom build

•  Whether it’s freestanding or attached to another structure or a concrete foundation.

Attached and Detached Garages

Average cost: $10,500 to $27,000 for one car; $14,500 to $40,300 for two cars, fully installed

If you’re looking to keep tools, bikes, or even a washer and dryer in your new space, along with your car or cars, you’ll probably want a completely enclosed garage with doors you can lock.

Your storage needs will help determine the size of the garage you build — and, yes, that size will figure into the cost. A standard one-car garage is 12 to 16 feet wide and 20 to 24 feet long, while a two-car garage is usually 22 to 26 feet wide and 20 to 24 feet long.

Keep in mind that if the garage is attached to your home, you may pay 10% to 15% less than you would if the garage is detached. The materials you choose for the walls and roofing will also influence the cost. And you can expect the price to increase if you add windows, plumbing, and/or electricity.

Storage Shed

Average cost: $2,500, fully installed

If you’re just looking for additional storage and not a place to park your car, a shed might be a more affordable option. The average price range for building a shed ranges from about $200 (for a small prefab shed) to $30,000 (for a custom structure that could serve as an office, man cave, or she-shed).

The size of the shed (both square footage and ceiling height) will make a big difference in the cost, as will the materials you choose, the type of foundation you use, if the project requires a permit or professional installation, and if you want to add plumbing and electricity.

Garage Doors

Average cost: $1,200, fully installed

The door you choose for your new garage can be important to your home’s curb appeal, but you may also want to consider energy efficiency and how the door will hold up against rough weather — or energetic kids who use it as a backdrop to their sports practice.

Factors that can affect the cost of a garage door include the style, materials, size, and the type of installation required. The cost can also increase if you opt for an automatic door with sensors, a keypad, and other bells and whistles.

Installation Costs

Unless you plan to build your garage yourself, your labor costs could add up to at least half of your project’s price tag — and your location could be an important factor.

HomeAdvisor found, for example, that if you live in Austin, Boston, or Los Angeles, you could end up paying twice as much for your garage as you would if you lived in Chicago, Oklahoma City, or Kansas City, Mo.

Permit Fees

Average cost: $150 to $500

Here’s a cost homeowners tend to overlook: Almost any building project requires a permit.

Permitting needs and costs can vary depending on the type of project and where you live. If you’re working with a contractor or installation company, they should be able to tell you what’s required and the cost. You also can contact your local government agency for information.

The average cost for a garage permit is $150 to $500, but if you’re adding electricity, plumbing, or air conditioning, the price could be as much as $800 to $1,500.

Recommended: The Cost of Buying a Fixer-Upper

Garage Builders Financing Options

Because the cost of building a garage can get pretty expensive, homeowners often decide to use some type of financing to pay for the project.

There are several options available if you prefer to break down the cost of your project (large or small) into affordable monthly payments. Here are some common choices:

Personal Loan

With a personal loan, you’ll get a lump sum of money that can be repaid in monthly installments, usually at a fixed interest rate that’s based on your credit score, income, and how much debt you’re currently carrying. This type of financing can be used for just about anything, but home improvement projects are among the most popular uses of a personal loan.

Borrowers typically aren’t required to provide collateral to get a personal loan (unlike a home equity loan or HELOC). This can make the approval process go faster, which means you can get your money sooner. Another plus: You won’t be putting your home or any other asset at risk if you can’t make your loan payments. But there’s also a downside in that your interest rate may be higher than it would be with a secured loan. And you may have less time to pay back the money you borrowed.

Recommended: 11 Types of Personal Loans and Their Differences

Home Equity Loan

Borrowers who have built up some equity in their home (at least 10% to 20%) may want to look into financing a garage build with a home equity loan. With this type of loan, you’ll get your money upfront and pay it back, with interest, in fixed monthly payments.

The upside to a home equity loan is that a lender may offer a lower interest rate because the financing is secured with your home as collateral. The downside, of course, is that if you default on the loan, the lender could choose to foreclose. And if you sell your home, you’ll be expected to pay off your loan balance. You also can expect a more complicated application process and to pay closing costs and other fees with this type of loan.

HELOC

A HELOC is like a home equity loan in that it allows you to borrow against the equity you have in your home. But with a HELOC, you don’t have to borrow all the money at once — you can use your line of credit to borrow just what you need as the project moves along. And you’ll pay interest (usually a variable rate) only on the amount you currently owe, much like a credit card.

The major drawback is that your home will serve as collateral for the line of credit, so if you default, the lender could foreclose on your home. And if interest rates increase, your loan payment could end up being higher than the amount you originally budgeted.

203(K) Loan

The Federal Housing Administration offers 203(K) loans as a way for current homeowners and homebuyers to refinance their home and roll the costs of a renovation into the mortgage. Because they’re backed by the FHA, these loans can come with lower interest rates and qualifying may be easier. But your home and your garage project will have to meet FHA requirements.

Construction Loan

Construction loans traditionally have been used to finance the building of a new home, but they also may be used to make substantial renovations to a current home.

These loans typically have a variable interest rate, and because they’re unsecured, the rate may be higher than other types of garage financing options. Construction loans also have shorter terms than most loan options: They generally must be rolled into a mortgage or paid off within a year.

Cash-out Refinance

With a cash-out refinance, borrowers take out a new and larger mortgage on their home, then pay off the old mortgage and keep the difference to pay for their renovation project.

If you can find a competitive, fixed interest rate and other loan terms that work for you, this might be an alternative worth considering. But again, the loan is secured with your home as collateral, the application and approval process can be more complicated and slower than with other options, and there may be closing costs and fees.

What Type of Loan Is Best for Building a Garage?

If you’re hoping to build a garage, it makes sense to thoroughly research all the financing possibilities. But you’ll likely find that a personal loan is among the top contenders.

Benefits of a Personal Loan

There are several benefits to using a personal loan to finance a new garage.

•  You can borrow a fairly high amount (up to $100,000, for example, with a SoFi personal loan).

•  With an unsecured personal loan, you won’t have to put up your home or any other asset as collateral.

•  If you have a good credit history, you should qualify for a competitive interest rate.

•  Personal loans typically come with a fixed interest rate, which can make budgeting easier.

•  If you make timely payments and pay off the loan on time, it can help your credit.

•  The application process can be faster than other options, so you’ll get your money sooner.

Qualifying for a Personal Loan

Personal loan requirements can vary from one financial institution to the next, but here are three things lenders typically look at when reviewing an application:

•  Credit score and credit history: The higher your credit score, and the cleaner your credit report, the better your chances of qualifying for a loan with a competitive interest rate.

•  Employment history and income: Borrowers should be prepared to provide recent tax returns, bank statements, and other documents to verify their employment and their wages or salary.

•  Debt-to-income ratio: Lenders can have different requirements, but generally, the lower your debt-to-income ratio (how much you spend on monthly debt payments relative to your income), the better chance you’ll qualify for the loan terms you want.

Things to Consider When Applying for a Personal Loan

Before you apply for a personal loan, it can be a good idea to think about:

•  How much you need: With a personal loan you’ll receive a lump sum of cash, so it can be helpful to have an estimate for your project’s overall cost — and how much what you’ll need to borrow — before you begin researching lenders.

•  How much you can afford to pay back each month: You may want to run the numbers to see how your loan payments will fit into your monthly budget.

•  How much time you’ll need to repay the loan: If you have big dreams — and a big price tag to match — you may want to look at a long-term loan (five to seven years) so the payments don’t overwhelm you. Keep in mind, though, that the longer the loan term, the more you can expect to pay in interest.

•  Where you can get a personal loan that’s a fit for your needs: When you’re ready to look for a loan, your focus will likely be on finding the most competitive interest rate. But when you’re deciding where to get a personal loan, don’t forget to consider other costs — including origination fees, late payment charges, and prepayment penalties.

Alternative Garage Builders Financing Options

There are a couple of alternatives to financing your garage build with a loan or a secured line of credit. And like the other options listed here, they, too, have pros and cons.

Cash

If you have plenty of money to finish your project without financing, and you want to avoid interest charges, paying cash is definitely an option to consider. But if it would require pulling money from your emergency fund, or affect your budget or other important financial goals, you might want to look at other options. Of course, you could save up until you feel comfortable about paying for the project with cash. But depending on the total cost of the project, that might mean a long delay.

Credit Card

A credit card is a convenient way to pay for costs as you go, and this type of financing could be easier to obtain than a secured loan or secured line of credit. But unless you’re eligible for a card with a low or 0% introductory rate — and can pay off your balance before the introductory period expires — the interest rate could be much higher than with other borrowing options. If you’re building a storage shed or DIY carport, a credit card might be an appropriate financing tool. But for a pricier project, you may find there’s a more affordable option.

The Takeaway

Building a garage — whether it’s a prefab shed, standalone carport, or attached garage — can be an expensive project. Depending on the scale of the project and where you live, you could easily spend close to $30,000.

Most people opt to finance their garage build project, either with a personal loan or a line of credit. This allows them to break up the cost over several months and keep their cash in savings for a rainy day.

If you know what kind of garage or similar structure you hope to build, and you need or want to find financing to help pay for it, a personal loan can be a solid option.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

How do people afford to build a garage?

If paying cash to build a garage isn’t feasible, there are several financing options available, including a personal loan, home equity loan, or home equity line of credit (HELOC).

Can you finance a garage?

You can finance a garage if you can’t pay cash — or don’t want to. There are several financing options available, whether you’re planning to DIY a small carport or you’re working with a contractor to install a super-sized garage with all the amenities.

What type of loan is best for building a garage?

If you have solid credit, a personal loan may be the best type of financing for building a garage. You can borrow the money you want upfront, get the funding quickly, and make fixed-rate monthly payments while enjoying the benefits of adding a garage where you can keep your car, boat, tools, toys, and more.

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Photo credit: iStock/PC Photography

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.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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With an installment loan, you receive a lump sum of money up front and then pay it back (plus interest) in a series of fixed payments over the term of the loan. The repayment period can be several months to many years.

There are many types of installment loans, including personal loans, mortgages, and auto loans. Read on to learn exactly how these loans work, their pros and cons, and how they compare to revolving loans.

What Is an Installment Loan?

Simply defined, an installment loan is a type of loan that allows you to receive the full borrowing amount (loan principal) all at once and then repay it in fixed monthly installments over a set period (the loan’s term). Each installment consists of both principal and interest, and the loan term can range from a few months to several years.

Common examples of installment loans include car loans, mortgages, personal loans, and student loans.

Installment loans are also known as closed-ended loans (or closed-ended credit accounts). They differ from revolving loans, like credit cards, which are open-ended accounts. With an open-ended account, you can use and repay funds repeatedly for as long as the account remains open and in good standing.

How Do Installment Loans Work?

When you take out an installment loan, you immediately receive the principal. You then start paying it off — typically with interest — in regularly scheduled payments for a set number of weeks, months, or years. Once the loan is paid back in full, the account is closed.

To better understand how installment loans work, let’s consider an example:

Let’s say you need to borrow $10,000 to cover home repairs. You apply for a personal installment loan with a 5% annual percentage rate (APR) and a loan term of 3 years. If approved, you’ll receive the full $10,000 upfront. Over the next 36 months, you’ll make fixed monthly payments, including principal and interest, until the loan is fully repaid.

Pros and Cons of Installment Loans

To better understand if a personal installment loan is the right fit, let’s look at some pros and cons associated with this type of lending product.

Pros	Cons
Provides funds for a large purchase	Interest and fees add to your costs
Fixed payments help with budgeting	May have long repayment period
May have lower interest rates than other loan products	May need good credit to qualify

Pros

•  Helps you cover a large expense Installment loans can give you quick access to the money you need for bigger purchases, such as a house, car, or home renovation.

•  Predictable payments Interest rates are typically fixed and each loan payment is the same throughout the loan term, making budgeting easier.

•  Structured repayment Installment loans have fixed repayment schedules, ensuring you know exactly when the loan will be paid off.

•  Access to larger amounts Installment loans often allow for borrowing larger sums compared to other types of loans.

•  Potential lower interest rates Depending on your creditworthiness, installment loans may offer lower interest rates than credit cards or payday loans.

Cons

•  Interest costs Typically, borrowers need to pay interest on the loan amount, which adds to the total cost.

•  Credit requirements Qualifying for installment loans may require a good credit score, making them less accessible for individuals with poor credit.

•  Potential fees Some lenders may charge origination fees or prepayment penalties, so it’s essential to review the terms and conditions.

•  Not open-ended It’s unlikely you’ll be able to add to your loan amount if you find you need more.

•  Potentially long commitment Some installment loans come with long repayment terms, which means you must commit to making regular payments over a long period of time.

Installment Loans vs Revolving Credit

Installment loans work differently than revolving credit. With revolving credit, you don’t receive a lump sum of money up front and then pay it back (plus interest) on a set schedule. Instead, you get approved for a certain credit limit, then borrow what you need (up to your approved limit) as you need it. You only pay interest on what you borrow and, once you repay what you’ve borrowed, that money becomes available to borrow again.

Here’s a closer look at how installment loans compare to revolving credit.

	Installment Loans	Revolving Credit
Payment structure	Fixed monthly payments	Minimum payment due varies monthly
Loan term	Predetermined	No fixed term
Interest charges	Interest applied to entire balance	Interest applied to outstanding balance
Credit limit	Borrow a lump sum up front	Pre-approved credit limit/td>
Interest rates	Tend to be lower	Tend to be higher

Types of Installment Loans

Installment loans are available for various purposes. Here are some common types.

Auto Loans

Car loans are a common type of installment loan. Typically, you make a down payment on a car, then take out an auto loan to cover the purchase price balance. You then make monthly fixed payments to the lender for the term of the loan, which can range anywhere from 24 to 84 months.

Mortgages

Mortgages are long-term installment loans used to finance the purchase of a home. You typically make a downpayment (say 20% of the home’s purchase price) and get a loan for the balance at an agreed-upon interest rate. Common mortgage loan terms are 15 or 30 years.

Personal Loans

Personal loans are typically unsecured installment loans that can be used for various purposes, such as debt consolidation, paying for a wedding, or making home improvements. You receive the funds in a lump sum and once you get the cash, you must make payments until the debt has been fully repaid. Terms can be anywhere from one to seven years.

Student Loans

Student loans are a type of installment loan that pay for college and related expenses (including tuition, fees, books, and living expenses). There are two types of student loans — federal and private student loans. Which type you get will determine how your interest rate is calculated and your repayment options.

Buy Now, Pay Later Loans

Buy now, pay later loans allow you to make purchases and pay them off over time, typically interest-free if repaid within a specific period, which is generally a few weeks. If you don’t repay the loan within the set term, however, you can end up paying high interest rates and fees.

Installment Loans and Credit Scores

The typical credit requirements to qualify for an installment loan vary among lenders. Generally, a higher credit score increases your chances of approval and may lead to more favorable loan terms, such as lower interest rates. Lenders may also consider factors like income, employment history, and debt-to-income ratio when evaluating your application.

The Takeaway

Installment loans can provide a helpful financing solution for various needs, offering predictable repayment schedules and the ability to borrow larger sums. However, it’s essential to carefully consider the pros and cons, compare different types of loans, and review credit requirements before applying.

Taking the time to understand installment loans will help you make informed decisions and choose the best financing option for your specific circumstances.

If you are thinking about using a personal installment loan to cover a large expense, you may want to consider a SoFi personal loan. SoFi personal loans offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.

See if a personal installment loan from SoFi is right for you.

FAQ

Is there a difference between personal loans and installment loans?

Yes. Personal loans are a specific type of installment loan, but not all installment loans are personal loans. Installment loans, in general, refer to loans that are repaid in fixed monthly installments over a specific period. Personal loans, on the other hand, are installment loans that can be used for various purposes, such as debt consolidation or unexpected expenses.

Which consumer loans are installment loans?

Several types of consumer loans are considered installment loans. Some common examples include:

•  Auto loans

•  Mortgages

•  Personal loans

•  Student loans

•  Buy now pay later loans

These loans are repaid in regular installments over a predetermined period.

Can installment loans hurt your credit score?

Installment loans can potentially impact your credit score. If you make timely payments and manage the loan responsibly, it can have a positive effect on your credit by demonstrating your ability to handle debt. If, on the other hand, you miss payments or default on the loan, it could negatively impact your credit. It’s important to pay each installment in full and on time to maintain a good credit score.

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Photo credit: iStock/Delmaine Donson

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.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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 .

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The cost to replace a chimney ranges from $1,000 to $15,000, depending on the type and size of the chimney. You can install a smaller or prefabricated chimney for $1,000 to $5,000, but a full masonry chimney replacement cost can reach $15,000.

Below, we’ll explain new chimney cost factors, break down labor and materials expenses, discuss financing options, and help you determine if you might be able to replace the chimney yourself.

Chimney Replacement Costs: An Overview

How much does a chimney replacement cost? Anywhere from $1,000 to $15,000. A full chimney replacement is on the higher end of that range while a partial replacement — or a basic prefab chimney installation — is on the lower end.

In some cases, it might be possible to repair the chimney instead of replacing it. Chimney repair costs typically range between $1,000 and $3,000, though it varies depending on the extent of the damage.

Recommended: The Ultimate Home Maintenance Checklist

Full Chimney Replacement

A full chimney replacement costs between $5,000 and $10,000 — or up to $15,000 in some cases. Prefabricated chimneys are the lowest-cost option. You’ll pay moderate prices for a metal chimney and the highest prices for a brick chimney.

Partial Chimney Replacement (Rebuild)

You may only need to replace part of a chimney, like the stack, which extends above the roof. In other cases, you may need to pay for the repair of specific elements, like collapsing mortar, a damaged chimney crown, or a cracked flue.

Partial chimney replacement costs may top out at $5,000 while repair typically ranges between $1,000 and $3,000 per job.

Recommended: Home Improvement Calculator

Chimney Installation Labor Cost

Labor makes up a large portion of the cost to replace a chimney. Depending on your geographic location, if you can reach the chimney by ladder or you need scaffolding, and the type of chimney being installed, labor rates may range from $50 to $150 an hour for an experienced mason.

You will usually need to hire a structural engineer before the mason can begin their work, which adds to your overall labor costs. Depending on where you live, that can cost around $500.

Chimney Installation Material Costs

Material costs vary depending on the type of chimney being replaced, rebuilt, or repaired. Prefab chimneys have lower material costs while masonry chimneys require more expensive materials like bricks and mortar.

Chimney Installation Cost Financing

Paying for a new chimney — or even a more basic chimney repair — can be difficult on a tight budget. If you don’t have the money in emergency savings, you can explore other options like:

•  A payment plan with the contractor: Ask the contractor if they can set you up with a payment plan over a set number of months, rather than requiring the full payment all at once. Costs may be higher if you go this route.

•  A credit card: Some contractors will let you pay with a credit card but be careful. Your credit card may have a high APR, and if you can’t afford to pay the full bill at the end of the month, you could end up paying a lot of interest, which will make the new chimney even more expensive.

•  A home improvement loan: Home improvement loans are a low-cost option for homeowners. These personal loans typically have a lower interest rate than your credit card, and you can choose repayment terms — often three to five years — that make sense for your budget. A personal loan can be a cost-effective way to pay for common home repair costs.

•  Home equity loans: Homeowners can also tap into their home equity with a home equity loan or home equity line of credit (HELOC).

Before you decide on the best financing option, you will want to compare the difference between home equity loans vs. home improvement loans.

Can I Replace the Chimney Myself?

A chimney replacement requires special skills and training. A lot can go wrong if you install or repair a chimney incorrectly. It could become a fire hazard or potentially collapse. No matter your DIY skills, we highly recommend hiring a qualified mason to tackle all repairs and replacements.

Recommended: How to Keep Inflation From Blowing Your Home Reno Budget

What Factors Impact a Chimney Replacement Price?

Several factors can impact your overall chimney replacement cost, including:

•  Permits needed: You’ll almost always need to get a permit for larger chimney replacement projects. Permit costs vary depending on your state and municipality.

•  Level of work required: Wholesale chimney replacements cost significantly more than minor work. For example, chimneys may just require some repointing or tuckpointing to keep them in good shape, or you may need to replace the crown or cap or only rebuild the stack. If you have to replace the whole chimney, it may require demolition, which can be expensive. Talk with your contractor about the extent of the work to get a better idea of the total chimney installation cost.

•  Type of chimney: Prefab chimneys are the most affordable to install. You’ll spend more to replace a metal chimney, but the most expensive type of chimney to replace is a brick one.

•  Size and location: Larger chimneys will cost more to replace than small ones. Chimneys that are easy to access (by ladder, for example) are also more affordable to repair or replace. If the positioning of the chimney makes it harder for the contractor to access, labor costs will be higher.

Signs Your Chimney Needs to Be Replaced

How do you know when it’s time to replace your chimney? Here are a few signs to watch for:

1.   Crumbling brick: If the brick is visibly crumbling or deteriorating, call a mason quickly to determine the extent of the damage and begin the repair or replacement work.

2.   Leaks: If your chimney is the source of leaks (look for water damage to the surrounding walls and ceiling), it’s time to call a contractor to look at it.

3.   Cracks: It’s good practice to have your chimney inspected each year. During the inspection, the contractor will look for large cracks. These could be a sign that it’s time to repair or replace the chimney.

The Takeaway

Chimney replacement costs can range from $1,000 to $15,000 — it’s not a cheap project, but luckily, it’s also not a common one. Get your chimney inspected every year, and keep up with regular maintenance and cleaning. Unless there’s unexpected storm damage or the chimney is old, you may not have to replace the chimney the entire time you live in your home.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

Replace your chimney asap with a home improvement loan from SoFi.

FAQ

How long does it take to replace a chimney?

Basic chimney repairs can be quick: A professional should be able to repair a partially damaged chimney in one to four days. Significant damage may lead to longer timelines — in some cases, it might take weeks or even months to repair and rebuild a chimney.

Can I replace my chimney myself, or do I need to hire a professional?

Replacing and repairing a chimney requires specialized knowledge, skills, and equipment, not to mention physical strength. If you make even a small mistake when replacing your chimney, you might accidentally cause a leak, inadvertently create a fire hazard, or build a structurally unsound chimney that could collapse. Always hire a professional for this work.

What qualifications should I look for in a chimney replacement contractor?

When looking for a contractor to work on your chimney, always confirm that they are licensed and insured. You should also verify that they’re certified by the Chimney Safety Institute of America.

Ask the contractors if they offer warranties or guarantees for their work and read reviews online to make sure they provide quality services. You can also ask them for references.

How do I compare quotes from different chimney replacement contractors?

Before getting quotes from any chimney replacement contractors, read online reviews and ask the contractors about their licenses, insurance, and certifications. Only get quotes from qualified contractors.

When comparing quotes, look not just at the overall cost but also the timeline to ensure they can replace your chimney quickly, if needed. Also verify what is and isn’t covered in the quote. For example, has the contractor included the necessary permits, or is that a separate cost not part of the estimate?

You’ll also want to ask about their payment schedule and how they prefer to be paid (cash, check, or credit card, for example).

Are there permits or inspections required for chimney replacement, and how much do they cost?

When replacing a chimney, you almost always will need to get a permit and an inspection. The costs will vary depending on where you live, but you might pay up to $500 for an inspection by a structural engineer, and permits can reach $150.

How often should I replace my chimney, and what factors affect its lifespan?

A well-built chimney should last several generations of homeowners. In theory, you may never need to replace your chimney (but regular inspections are a good idea). If you do replace your chimney, you likely won’t need to replace it again as long as you’re in that house.

That said, certain elements may need to be repaired or replaced more frequently. Chimney liners, for instance, last 15 to 20 years, and mortar lasts 25 to 30 years.

Extreme weather, like high and low temperatures, hail, and earthquakes, may shorten a chimney’s lifespan, as can exposure to water. As your home settles over time, it may also lead to premature cracks in your chimney.

What are the risks of not replacing a chimney that is in disrepair?

If you ignore the signs that it’s time to replace or repair your chimney, you’re exposing your home to a lot of risk. Water could more easily get into your home, leading to mold and mildew. Walls, ceilings, and floors could deteriorate over time, and the inner workings of your chimney would be exposed to rust. Eventually, your chimney might collapse, leading to much more expensive and extensive structural damage to your home.

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Photo credit: iStock/AntonioSolano
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.

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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When shopping around for lending options for a major project or immediate financial need, a personal loan might be on your list. And besides the interest rates and terms, the loan amount is a large determining factor in which option you decide to go with.

So how much can you get for a personal loan? Whether you’re looking for a large personal loan or a small one, the lending criteria is the same. Let’s take a look at how much lenders typically offer, what factors play into the size of a personal loan that you can get, and when it makes sense to get a personal loan.

How Much Do Lenders Offer?

How much can you get for a personal loan? Amounts vary by lender, but typically start as low as $600 and go as high as $50,000. Some lenders, including SoFi, offer personal loans up to $100,000.

The amount you actually get approved for depends on a handful of criteria, which we’ll dig into below.

Recommended: Can I Increase My Personal Loan Amount?

What Determines How Big of a Personal Loan You Can Get?

The amount a lender offers and the amount you qualify for aren’t always one and the same. There’s a handful of financial and credit criteria that can impact the loan amount, rates, and terms. Let’s look at the main factors:

Credit Score

In general, the higher your credit score, the larger the loan amount, the more favorable the terms and interest rates. On the flip side, the lower your credit score, the smaller the loan amount, and the less favorable your terms and interest rates.

Lenders usually have credit score requirements. The minimum required credit score for a personal loan varies but can start at 580. To get the best terms and rates, you usually need a credit score of at least 640.

Recommended: Can a Personal Loan Hurt Your Credit?

Debt-to-Income Ratio

Your debt-to-income ratio (DTI) is your monthly debt payments divided by your gross monthly income. It’s expressed as a percentage. For example, let’s say your monthly income (before taxes, withdrawals, and other deductions are taken out) is $5,000, and your total debt obligations are $2,000. In that case, your DTI is 40%.

For the most part, lenders would like to see a DTI no higher than 35% to 40%. But if you have a high credit score, you might get approved with a slightly higher DTI.

Lender Amount Limits

The amount you can borrow may be limited by how much funding you can receive from your lender. Let’s say your credit is stellar, you have low DTI, steady employment, and a good income. But if the lender’s max personal loan amount is $50,000, then the most you can potentially borrow is $50,000.

Applying as An Individual or Jointly

If you’re applying for a personal loan with another applicant and their credit is strong, you might be eligible to borrow more money. However, not all lenders let you apply jointly, so you’ll want to check beforehand.

Income and Employment History

How much you can borrow also depends on your income and employment history. If you bring in a certain amount of money and have steady work for the last few years, that could boost the approval amount.

Some lenders may give more weight to your income and employment history. In turn, you might be able to get a higher loan amount with a lower credit score and a higher debt-to-income ratio.

Collateral

Not all personal loans require you to provide a valuable asset, such as your home or car, to back up the loan. But if you’re looking into a secured loan, you might be able to get a higher max amount on your personal loan than if you went the unsecured loan route.

Offering collateral and getting a secured loan means you could get a bump in your personal loan amount. Remember, not all lenders offer secured personal loans. If a lender does offer both secured and unsecured loans, you can compare quotes from the same lender for either option.

Loan Purpose

A lender might only allow you to use the loan for certain purposes. For instance, some lenders specialize in credit card debt consolidation loans. Lenders that offer greater flexibility might have limits on how much you can borrow depending on the loan purpose.

For example, the limit on using the loan proceeds for childcare expenses and large purchases might be different than if you’re planning to use the funds toward a major home improvement project.


💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi Personal Loans come with no-fee options, and no surprises.

Calculating How Much You Can Borrow

Determining how much you can borrow requires you to know your financial situation, how much you’d like to borrow, and what you can reasonably afford to pay off on a regular basis.

To start, jot down the repayment term and rate you anticipate receiving. If you get prequalified, that can give you a fair estimate on your loan amount.

Next, you’ll want to figure out the following numbers:

•   Income before taxes.

•   Additional income you get on a regular basis (i.e., rental property income, alimony, disability benefits).

•   If you’re filing jointly, you’ll also need to include the other applicant’s income.

•   Tally up your existing debt. This might include credit card debt, other personal loans, a car loan, or student loan debt.

That can help you figure out how much you can afford for your monthly payment.

How to calculate your borrowing power

If you’re mulling over the possibility of debt consolidation, you can use a handy personal loan calculator to gauge how much you’d save on interest or how much your monthly payment will be lowered by rolling over your existing debt to a new one.

Otherwise, you can punch in basic numbers, such as the loan amount, interest rate, and repayment term, to figure out what your monthly payment shakes out to.

Recommended: Pros and Cons of Personal Loans

Does a Personal Loan Make Sense?

Personal loans do have the word “personal” in them. So whether it makes sense for you to take out a personal loan depends on your unique situation and circumstances.

Here are some scenarios where getting a personal loan might be a good idea:

•   You need a large sum upfront. If you need a chunk of cash for a big-ticket purchase or to fund a home improvement project, a large personal loan can provide you with the money to cover a purchase.

•   You have a good credit score. The higher your score, the higher the loan amounts, and the better your rates and terms will most likely be.

•   You’re using the funds for something you really need. If you need the money to cover a financial shortfall, unexpected emergency, or much-needed home remodeling project, it could be a sound move to take out a personal loan.

•   You need the money quickly. The processing and funding times for a personal loan can be a lot faster than other funding choices, such as a home equity loan or HELOC.

•   You want to consolidate high-interest debt. If you qualify for a lower interest rate, lower monthly payments, and more flexible repayment terms, it could make financial sense to take out a debt consolidation loan.

Now, let’s walk through instances when a personal loan may not make sound financial sense:

•   You can’t keep up with monthly payments. If you’ve looked at your situation, do the math, and realize that you’ll have a hard time staying on top of your monthly payments, then a personal loan might not be the right choice for you at the time.

•   You have time to save for your major purchases and goals. If you aren’t in a financial pinch and don’t need the money right away, you might be better off saving instead.

•   You don’t need to take out a large amount of money. Unless you have good reason to take out a sizable amount of cash, then it probably doesn’t make financial sense to get a personal loan. Other options, such as a personal line of credit, might be a better move.

Alternatives to Personal Loans

If you’re on the fence about taking out a certain type of personal loan, know that other options exist. Here are other routes to take:

Credit card. If you’re already shouldering a lot of credit card debt and are paying a lot in interest fees, this might not be the best choice for you. But if you need to borrow a small amount — and can reasonably pay off your balance in a short amount of time — then a credit card provides easy access to funding.

Personal line of credit. Don’t need a lump sum upfront and anticipate needing to tap into funds for different purposes? Then a personal line of credit, which is similar to a credit card, might be a better fit.

Peer–to-peer loan. If you’re struggling to qualify for a personal loan with a traditional lender, you might have better odds of getting approved for a peer-to-peer (P2P) loan. Instead of being funded by a financial institution, P2P loans are funded by individuals who serve as investors and are loaning the money. The lending criteria for P2P loans tend to be less stringent than traditional loans.

Home equity loan or home equity line of credit (HELOC). If you’re a homeowner who has built equity in your home, you could qualify for a home equity loan or home equity line of credit (HELOC). Because you are offering your home as collateral, you typically can qualify for higher loan amounts. Plus, home equity loans or HELOCs tend to have less stringent lending criteria.

If possible, consider waiting to take out a personal loan until you’ve worked on building your credit, reduced your debt loan, are earning a higher income, or have a more stable employment history.


💡 Quick Tip: Just as there are no free lunches, there are no guaranteed loans. So beware lenders who advertise them. If they are legitimate, they need to know your creditworthiness before offering you a loan.

The Takeaway

How much of a personal loan you can get depends on a handful of factors, such as what’s available from the lender, your credit score, debt-to-income ratio, and employment history. Plus, it’s important to get your head around what you can reasonably afford to pay each month.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

What is considered a large personal loan?

Most lenders offer a maximum personal loan amount of $40,000 to $50,000, and some lenders, including SoFi, offer lending amounts of up to $100,000. But just because a lender offers that doesn’t mean you’ll get approved for it. You’ll also want to be mindful about not taking on more than you need.

How much is too much to ask for a personal loan?

There’s no specific number that constitutes “too much” for a personal loan. That said, an amount might be considered too high if you don’t have a good reason to take out that much money and if you aren’t able to afford the monthly payments.

Does the size of a personal loan affect a credit score?

As your personal loan payments are reported to the three major credit bureau agencies, the size of your personal loan can impact your credit. Your payment history is the largest contributing factor, but loan size can also influence your score.

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Photo credit: iStock/Ridofranz

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.

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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By now, you’ve probably already calculated how much of a personal loan you can get. And you likely have a solid understanding of the personal loan requirements to get approved. You may be wondering about the next step in the process: how to get a personal loan.

Applying for a loan can be relatively simple, as long as you understand the options available to you, meet the lender’s requirements, and have the necessary paperwork in order ahead of time. Here’s what you need to know.

1. Prequalify for a Personal Loan Through Multiple Lenders

The first step in applying for a personal loan is to get prequalified. You can get a personal loan from a few different sources, including a bank, credit union, or an online lender. Each has its pros and cons.

Personal Loan from a Traditional Bank

One drawback of getting any type of personal loan from a bank is that it can take longer to be approved compared to an online lender. However, banks have greater lending power, so you might be able to get a larger loan. Plus, many banks will not charge an origination fee.

Pros	Cons
In-person application	High credit score requirements
Low or no origination fees	High maximum APRs
Low minimum APRs	Slow approval

Personal Loan from a Credit Union

Credit unions are likely to offer the lowest APRs and have low fees to boot — two advantages if you’re already a member of one. However, there are potential tradeoffs. Smaller credit unions tend to have limited digital offerings compared to national banks, and it may take borrowers longer to get approved for a personal loan.

Pros	Cons
Lower interest rates than banks and online lenders	You have to be a member
Low fees	Digital offerings may be more limited
Members may find it easier to get a loan with a credit union vs. a bank	Slow approval

Personal Loan from an Online Lender

With an online lender, your personal loan application is approved and managed entirely online — there is no opportunity to sit down with a loan officer. Depending on whether you’d prefer to apply for a loan online vs. in person, this could be either an advantage or a disadvantage.

If you visit an online loan aggregator site, you can apply for preapproval and receive multiple loan options. From there, you can easily compare the rates and terms, but be sure to confirm the fees and charges.

Pros	Cons
You can easily compare rates and terms of online lenders on aggregator sites	Fast approval process, with funds deposited sometimes within one business day
Get multiple loan offers from an aggregator site with no hard credit pull	Potentially high fees
The loan application process can be managed completely online	If you don’t have a great credit score, you might face a high APR

Does Preapproval Hurt My Credit Score?

In order to be preapproved for a personal loan, a lender will check your credit history. Typically, the lender will only perform a “soft” credit inquiry, which will not affect your credit score. A preapproval determines if you’re eligible for a loan before you formally apply.

Applying for a loan triggers a “hard” credit inquiry, which could pull down your credit score because you have applied for additional credit.

You can check with a lender to find out what type of check they will do to preapprove you for a personal loan.

Recommended: Personal Loan Glossary: Loan Terms to Know Before Applying

What Do I Need to Prequalify for a Personal Loan?

To qualify for a personal loan, you will need to first determine how much you want to borrow and how much you can afford to pay each month to pay off the loan. How much you can pay each month will determine the term (length) of the loan.

How much you want to borrow will depend on what you want to use the money for. While there are few limitations on how you spend the personal loan funds, it’s wise to borrow as little as possible because you will be paying interest on what you owe.

When you fill out the application, the lender will ask you for personal information. Typically, this includes:

•   How much you want to borrow and for what purpose

•   Proof of your net income and assets

•   Your contact information and social security number

2. Compare Your Options

Getting preapproved from various lenders is critical if you want to try to get the best rates and terms. The preapproval will show you the amount of the loan you qualify for, the APR, term, and any origination fees. By comparing multiple lenders, you can find the loan that will cost you the least. Be sure to check all the fees that may apply.

If you’re trying to get better loan terms, you may want to explore adding a cosigner who has a good credit score. Doing so may help the lender view you as less of a risk, and they may be inclined to offer you a lower interest rate. However, keep in mind that if you make late payments or default on the loan, the cosigner’s credit will suffer, as will your own.

3. Gather Required Documents

Before you sit down to fill out an online application or visit a bank or credit union, gather all the documents you will need. These will likely include:

•   ID, such as your driver’s license or passport

•   proof of address, such as a recent utility bill

•   proof of employment and earnings (paystub)

•   your social security number

•   your education history

4. Apply for a Personal Loan

Once you have all your documents on hand, you are ready to fill out either an online or in-person loan application. If you are applying online, you will be required to scan the documents and upload them with the application.

Recommended: Exploring the Pros and Cons of Personal Loans

How Long Does It Take to Get a Personal Loan?

The amount of time it takes for your loan application to be approved and processed depends on the lender. Online lenders tend to be the fastest. Submitting the application online only takes a few minutes, provided you have all your documents on hand, and approval can take one or two business days. You can expect to see the funds deposited into your bank account within one to three business days of approval.

Banks and credit unions, on the other hand, tend to be slower. You may need to apply for a loan in person and, depending on your relationship with the institution and your financial history, getting approved could take one to three business days. You might need to wait three business days or more to receive the funds.

Does Everyone Get Approved for a Personal Loan?

Not everyone is approved for a personal loan. Lenders consider your credit score, payment history, income, and debt-to-income ratio when deciding whether to approve someone for a personal loan.

Credit Score

The higher your credit score, the lower your interest rate will be. This is because if your credit history is good, the lender considers you low risk. A high interest rate is what protects a lender from the risk of lending to someone who might default on the loan. A score of 640 or more is generally considered enough for a borrower to potentially qualify for a loan from some lenders. If your credit score is low, consider bringing on a willing cosigner with a better credit score.

Payment History

How you’ve managed loan payments in the past is something that a lender will consider. If you have paid off loans on time and made timely credit card payments, the lender may not consider you high risk and could be more likely to approve your application. If you have a history of late payments, however, you might find it more difficult to get approved for a loan.

Income

Lenders want to make sure you can pay back what you borrow. They’ll look at your income to make sure it is steady and that you can afford to make the payments each month. Some lenders might request your W-2 tax forms, bank statements, or recent pay stubs. Others could require verification from your employer of stated income and to confirm current employment.

Debt-to-Income Ratio

Your debt-to income (DTI) ratio shows how much you are already paying toward debt each month and is an indicator of how well your current income can cover an additional monthly loan payment. If you have no spare cash left over after paying existing debts, such as credit cards and mortgage, you likely cannot make the payments on a personal loan. A DTI ratio of 35% or lower is considered favorable for a personal loan.

What Do You Do If You Are Denied a Personal Loan?

There could be many reasons your loan was declined. Your credit score might not be high enough, your DTI ratio could be too high, or perhaps you failed to provide the right paperwork. Find out why your loan was denied so that you can fix the problem.

If your loan application is declined,you can receive a free copy of your credit report. Check that the information on the report is accurate. See if you can boost your credit score by opening new accounts that report to the credit bureaus (if you’re trying to establish your credit), maintaining low balances, and making on-time payments.

Note that applying too often for new loans or accounts triggers hard credit checks, which can lower your credit score. Another option is to find a cosigner. A cosigner with a good credit rating might help you to secure a personal loan with a favorable rate.

If you have a high DTI ratio, you might have to pay down some of your existing debt in order to receive a loan with good rates. Alternatively, you might consider taking out a smaller personal loan and supplementing the rest from other sources.

💡 Quick Tip: Generally, the larger the personal loan, the bigger the risk for the lender — and the higher the interest rate. So one way to lower your interest rate is to try downsizing your loan amount.

The Takeaway

When it comes to applying for a personal loan, you have a few different sources to explore: banks, credit unions, and online lenders. Each has advantages and disadvantages.

To find the best loan rates and terms available to you, consider getting preapproved from multiple lenders and seeing which loan will cost you the least. You’ll also want to gather essential documents before you fill out the application. This may include your ID, proof of address, proof of employment and earnings, social security number, and education history. If your loan application is declined, find out what the issue was so you can fix it. The solution may involve boosting your credit, lowering your debt-to-income ratio, or taking out a smaller personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

Does everyone get approved for a personal loan?

Individuals may be denied a loan from a lender because they do not meet the requirements. A lender will consider your credit score, payment history, income, and debt-to-income ratio when deciding whether to qualify you for a loan. You also are required to submit documentation, such as proof of identity, residency, income, and your social security number.

What do you do if you are denied a personal loan?

If you are denied a personal loan, find out the reason why. Lenders are required to issue an adverse action notice informing you why you were denied. The most common reasons are a low credit score, a poor payment history, a high debt-to-income ratio, insufficient income, or failure to provide the right documents. If your credit score is too low, check your credit report for inaccuracies. Then, you might have to take steps to improve your score.

If your debt-to-income ratio is too high, try to pay down some of your debt. Other options are to apply for a smaller loan, find a cosigner with a good credit score, request a cash advance from an employer, or ask family or friends.

How long does it take for a personal loan to be processed?

A bank or credit union might take up to a week to deliver funds to your account. However, online lenders deliver funds within one to five days once you are approved.

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Photo credit: iStock/PeopleImages

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.

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 .

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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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