A home improvement loan is a type of financing that helps you pay for home repairs, renovations or additions. There are a variety of home improvement loan options and features to choose from.

There are different types of funding available depending on the cost of your project and the features you’re looking for. The requirements for each type of financing vary.

• Unsecured loans: For these types of loans, no collateral is needed. Credit cards, home improvement personal loans and personal lines of credit fall within this category.
  
• Secured loans: Collateral is required for home equity lines of credit (HELOC), home equity loans or cash-out refinances. In many cases, your home serves as collateral for the money you borrow. This assures the lender that they can recover the unpaid balance of the loan in the event of a default.

Lenders will typically extend home improvement loans to borrowers based on a variety of qualifying factors that can include:

• Credit score: The minimum credit score needed to qualify for a home improvement personal loan or line of credit is typically around 660. If you’re a current U.S. Bank customer, you can check your credit for free with our tool so you know where you stand. And anyone has access to check their report once a year for free at annualcreditreport.com.
• Debt-to-income ratio: A debt-to-income ratio (the ratio of total monthly debt payments — not including utilities, cell phone or cable service — compared to gross monthly income) of 45% or less is a good way to show your ability to repay what you borrow.
• Credit history: How well you made payments on (or paid off) car loans, student loans and other lines of credit will help the lender predict your ability to pay back what you borrow.