What’s the maximum home improvement loan amount you can get?

Making improvements to your home can cost thousands of dollars — more than many can pay out-of-pocket. Like other types of loans, the maximum home improvement loan you can get will depend on the lender, the loan type and your creditworthiness. But typically the largest amount you can get is $100,000 with an unsecured loan or up to 80 percent of your home’s equity with a secured one.

The better your credit score, the more likely you will get approved for a larger home improvement loan. Even if you qualify for the max amount, make sure you’re not getting in over your head by borrowing more than you need.

How much home improvement loan can I get?

Like many personal loans, the amount you qualify for depends on your credit score and debt-to-income ratio (DTI). A lower DTI is better because it tells lenders you can afford to take on additional payments. And getting a loan with good credit will allow you to borrow more at better terms, like a lower interest rate.

The maximum amount of money you can get will also depend on the type of home improvement loan you apply for.

• Home equity loans and home equity lines of credit (HELOCs) are based on your home’s equity — the difference between your home’s value and what you owe on your mortgage. You can borrow against it, using your home to secure the loan. Usually, you are limited to 80 percent of your property value, minus your mortgage debt.
• A personal loan for home improvement is usually unsecured. Approval relies on your personal finances. They can be used for home improvement, although loan amounts rarely exceed $100,000.
• An FHA 203(k) loan, also known as a mortgage rehab loan, allows you to borrow for the home’s mortgage and renovations in one loan. There are two types. One is for projects less than $35,000, and the other is for bigger, more expensive renovations.

Common home improvement loan amounts

Home improvement loans typically range from $1,000 to $100,000. You may need strong credit or a co-signer to get a home improvement loan if you want an amount on the higher side.

But don’t just borrow the maximum amount available. It’s smarter to borrow just the amount needed for your project and a small percentage extra to cover unexpected expenses. To estimate how much you need for the project, research average costs in your area and consult a professional. It’s wise to get bids from multiple contractors.

Once you know how much you need, you can shop lenders to find the loan product you want with the loan amount you need. The maximum home improvement loan amount at each lender will vary. Here are some examples from personal loan lenders Bankrate has reviewed:

• Citi: $30,000
• PNC Bank: $35,000
• Discover: $40,000
• Laurel Road: $45,000
• Prosper: $50,000
• USAA: $100,000
• Earnest: $250,000

When estimating project costs is difficult, a HELOC may be a more flexible and affordable option, since you can draw the right amount of funds when you need them without having to apply for a new loan each time. As with any loan borrowing from your home’s equity, the maximum amount you can borrow will depend on your home’s value and what you owe on your current mortgage.

A home equity loan calculator can help you quickly see how much you may be able to borrow.

Factors affecting your maximum home improvement loan amount

The amount you can borrow will depend on the type of loan you are applying for. Government loans often have more stringent requirements than those from private lenders. Most often, the amount you can borrow is determined by the following.

• The loan type: Loans that use your home’s equity will allow you to borrow more than an unsecured home improvement loan.
• Your home’s current value: The current value of your property may be higher than when you purchased it, increasing your equity and how much you are eligible for if you choose a home equity loan or HELOC.
• Your location: Since your location influences your home’s value and the return on home improvement projects, lenders may consider where you live when determining what you qualify for.
• Your personal finances: Lenders consider multiple aspects of your personal finances, but your credit score and your debt-to-income ratio are more important. Focus on increasing your score and dropping your DTI to qualify for larger amounts.

Be careful how much you borrow

Even if you qualify for a high amount, that doesn’t mean you’re required to borrow that much. Make sure you’re only borrowing what you need and an amount you can afford to make payments on. When considering financing a renovation or project, use a loan calculator to estimate your monthly payments to ensure they’re manageable.

In addition, a home project budget will help you plan for the complete cost of your renovation and keep you from overspending once you have the loan.

Bottom line

From personal loans to home equity loans, government loans and your savings, there are plenty of ways to fund a home improvement project. You can borrow up to $100,000 with a personal loan for home improvement and may be able to borrow more using a home equity loan or home equity line of credit. Remember that borrowed money must be paid back with interest. To keep your repayments manageable, borrow only what you need and stick to a budget. It’s helpful to do your research of average costs in your area and get multiple bids from contractors to get an idea of the cost and scope of your project.