Renovation Loan vs Personal Loan Comparison

Side-by-side: secured renovation loan (lower rate, longer term) vs. unsecured personal loan (higher rate, shorter term).

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How to use this calculator

  • Enter the amount needed.
  • Get reno loan quote (HELOC, 203k, or HomeStyle).
  • Compare to personal loan offers (LightStream, SoFi, Marcus).
  • Look at both monthly cost and total interest.

About this calculator

Renovation loans (FHA 203k, Fannie Mae HomeStyle, or HELOC) are secured by the home, so rates are 5-9% with 10-30 year terms. Personal loans are unsecured at 10-25% APR with 3-7 year terms. The longer term on a reno loan means lower monthly payments but more total interest if rates are similar; lower rates flip that. Personal loans win when amounts are small ($5-15k) and you can pay off in <5 years — the rate premium is small in absolute dollars and you avoid origination + appraisal fees.

Frequently asked

When does the reno loan win?+
Larger amounts ($25k+) and you intend to pay over many years. The lower rate dwarfs origination costs.
When does the personal loan win?+
Small amounts and fast payoff. A $10k personal at 12% over 3 years can beat a $10k reno loan with 2% closing costs.
Can I deduct interest?+
Reno loan interest is deductible if used to "buy, build, or substantially improve" the home (per IRS Pub 936). Personal loan interest is not.
Does a personal loan affect my mortgage?+
It hits DTI ratio for any future refi or new mortgage. Reno loans secured against the home also do, but as part of housing debt.
What about 0% credit cards?+
For amounts under $5k that you can pay off in 12-18 months: cheapest of all. Just don't carry the balance past the promo or rates jump to 25%+.

Related calculators

HELOC Payment Calculator
Home equity line of credit payment — interest-only during draw, amortizing during repayment.
Construction Loan Payment Calculator
Construction loan: interest-only on disbursed balance during build, then converts to permanent mortgage.
Kitchen Remodel Cost Calculator
Kitchen remodel cost = sq ft × $/ft² (basic / mid-range / luxury) + appliance package.
Bathroom Remodel Cost Calculator
Bathroom remodel cost = sq ft × $/ft² (basic / mid / luxury) + fixture package.
ROI on Renovation Calculator
ROI = (post-value − pre-value − reno cost) / reno cost. Factor in regional appreciation to separate true ROI from market gains.
Project Cash Flow Calculator
Monthly cash flow = inflows (loan draws, owner contributions) − outflows (labor, materials) over project duration.

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Monthly payment and total cost for any unsecured personal loan.