Home Improvement Loan

Find out what a renovation financed with a loan really costs: the fixed monthly payment, the total you will repay and the interest on top.

How the calculation works

Home improvement loans are typically unsecured personal loans with fixed monthly payments. The calculator uses the standard amortization formula: payment = P × i / (1 − (1 + i)^−n), where P is the amount borrowed, i is the monthly rate (annual rate ÷ 12) and n is the term in months.

Enter the loan amount, the annual interest rate in percent and the term in months (up to 360). Default numbers are only a starting point — use the rate from your actual offer. You get the monthly payment, the total of all payments and the overpayment, i.e. total interest.

The same math applies to a fixed-rate home equity loan, which is secured by your house and usually carries a lower rate. A HELOC is different: its rate is variable and payments change, so this calculator only approximates it.

Worked example

Borrowing $30,000 at 9% for 60 months: the monthly rate is 0.75%, so the payment is 30,000 × 0.0075 / (1 − 1.0075^−60) ≈ $623. Over five years you repay about $37,365, which means roughly $7,365 in interest.

Things to keep in mind

• Get contractor quotes first and add a 10–20% contingency; taking a second loan mid-project is usually more expensive.
• Interest on a home equity loan may be tax-deductible if you itemize and the money is used to substantially improve the home that secures it; personal loan interest is not deductible.
• Secured loans put your home on the line if you miss payments — weigh the lower rate against that risk.
• Projects that raise efficiency, such as insulation or heat pumps, may qualify for federal or state incentives; check what is available in the year you do the work.