Home Depot project loan review: A fixed rate for home improvement projects

Two women standing together in their home, looking at paint swatches togetherImage: Two women standing together in their home, looking at paint swatches together

In a Nutshell

Home Depot offers project loans with a credit line of up to $55,000 at a fixed APR. Customers will find that a Home Depot project loan is somewhat like a Home Depot credit card because this is a credit line. But there’s a big difference: Unlike a credit card, where a user has a continuous line of credit, purchases made through Home Depot’s project loan must be made within six months after approval.

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Pros Cons
Allows a co-applicant Have to buy products or services within the first six months
Fixed APR may be lower than APR on Home Depot credit card Purchases have to be at Home Depot only
  No prequalification option

What you need to know about a Home Depot project loan

Home Depot’s project loan is a credit line geared toward people who shop at Home Depot and want to finance home services and improvement projects. With the project loan offering a fixed interest rate and a credit line between $1,000 and $55,000, it may be a good alternative to the Home Depot® Consumer Credit Card.

But unlike a credit card where you can continuously make purchases, you only have six months from the time you’re approved for a project loan to make purchases — and only at Home Depot, either in a store or online.

A fixed rate that’s lower than Home Depot’s credit card

If you’re approved, a Home Depot project loan may come with a fixed interest rate that’s significantly lower than the lowest rate offered by the Home Depot® Consumer Credit Card.

And unlike a home equity loan or home equity line of credit, you won’t have to put up any collateral when you apply.

There’s a six-month purchase period

A downside of the Home Depot project loan is that you can only make purchases with it during the first six months. The first day begins on your approval date.

With a credit card, you can continue to make purchases as long as you haven’t exceeded your credit limit.

You have to buy from Home Depot

If you take out a Home Depot project loan, you’ll be limited to purchasing items and services from Home Depot, either in a store or online.

If you’re planning a big home improvement project, like a kitchen remodel, and you’re loyal to Home Depot, this loan might make sense for you. But if you prefer to use other contractors or materials, other financing might be a better option.

A closer look at a Home Depot project loan

If you’re thinking about applying for a Home Depot project loan, here are a few other details to consider.

  • Co-applicant allowed — If you want to include someone else on your application, you can add one co-applicant.
  • Four options for a loan term — You have four options for your repayment term: 66, 78, 90 or 114 monthly payments.
  • No annual fee — The project loan doesn’t come with an annual fee.
  • No prequalification option — If you want to check your potential rate before applying, you can’t apply for prequalification for a Home Depot project loan. And Home Depot will pull your credit reports and credit scores at the time of your application.

Who is a Home Depot project loan good for?

If you need to finance a home improvement project, a Home Depot project loan may be worth exploring for a large amount at a competitive fixed rate. It could be a particularly good option if you were already planning to purchase all of your materials and installation services from Home Depot.

But you’ll want to make sure you can complete all your purchases within the six-month window that Home Depot requires.

How to apply for the Home Depot project loan

You can get started online by entering the loan amount you would like. After that, you’ll provide some basic information about yourself and your co-applicant, if you have one.

You may also be asked to provide additional identifying documentation that supports the information you provide in your application, such as a driver’s license.

Not sure if a Home Depot project loan is right for you? Consider these alternatives.

  • LightStream personal loan: A LightStream personal loan could be a good fit if you’d like longer to repay your loan.
  • Wells Fargo: If you bank with Wells Fargo, this lender may be a good option for large amounts since it has a secured personal loan that you can back with a savings account or CD.

About the author: Ryan Mei is passionate about data analytics and personal finance. He graduated from Dartmouth College with a degree in economics. Ryan owns and writes a personal finance blog at <… Read more.