5 Top Lenders You Should Consider for Tiny House Financing

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Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

tiny house financing

Joining the tiny house movement is a popular strategy to dedicate more money toward your existing debt.

But what if buying a tiny house adds to your debt?

That’s the question Brooke Genn and her husband faced. Their diminutive dream home came with a price tag of $136,000, so they resorted to tiny house financing.

What is tiny house financing?

Genn and her husband designed a 39-foot-long house that will be completely solar-powered and include a claw foot bathtub when it’s built.

If you estimate how much house you can afford, you might consider even tinier or simpler homes. Tiny houses, by definition, are typically 100 to 400 square feet and built on wheels or purchased land.

But small isn’t free. The average humble abode costs $23,000 to build, according to iTRaC. Already-built models are typically available for less than $75,000.

Unless you have the cash on hand for your tiny home, you might consider borrowing. Your options include:

  1. Home equity line of credit (HELOC): If you’re looking at making a tiny home your second home, you could borrow against your existing mortgage. The downside of a HELOC is that it’s a secured loan, meaning your home acts as the collateral and could be seized if you default.
  2. Home mortgage: If your tiny home is big enough to comply with local building codes and rests on a permanent foundation, it could qualify for a traditional mortgage. But you’d also have to borrow a larger amount of money. Ally Bank, for example, is the only lender in our home mortgage marketplace offering a loan for a $75,000 purchase price.
  3. Recreational vehicle (RV) loan: If you’re looking for your tiny home to have tiny wheels, you could look to banks and credit unions for RV loans. SunTrust Bank, for example, works with tiny home builders and sellers to offer financing. Just ensure your home will be certified by the Recreation Vehicle Industry Association to be eligible.
  4. Personal loan: Like RV loans, unsecured personal loans won’t require you to post any collateral to guarantee the debt. Instead, you’re judged on your creditworthiness. The better your credit, the lower the rate you could receive. Personal loans also come with more flexibility, as many lenders place few restrictions on how you use the money, whether your mini mansion is set on wheels or planted on the ground. You could even use personal loans to buy a piece of land for your tiny home to rest.

To afford their more luxurious choice, the Genns borrowed $75,000 using a personal loan from a bank but only after exhausting their initial option.

“In our experience, obtaining a personal loan was significantly simpler than obtaining an RV loan,” Genn said via email. “The banks we spoke with regarding RV loans were happy with our credit scores but skittish about our thin credit history.”

5 personal loan companies offering tiny house financing

If you’re like the Genns, a personal loan might be the best way to finance your pocket-sized pad.

Below are five top personal loan lenders we’ve vetted for quality that offer lending services for major purchases, such as a tiny house. Each lender features an easy online application.

1. Upstart

  • Upstart personal loans come with an APR range of 7.73% to 29.99%
  • Borrow between $1,000 and $50,000
  • Repayment terms of three or five years
  • Qualify with a credit score of 620 or better
  • Your APR will be determined in part by factors such as your education and career
  • No prepayment penalties if you plan on paying down your debt early
  • Origination fee of 0% to 8% of your loan balance
Visit Upstart

2. LendingClub

  • LendingClub personal loans come with an APR range of 5.99% to 35.89%
  • Borrow between $1,000 and $40,000
  • Repayment terms of three or five years
  • Qualify with a credit score of 600 or better
  • Compare offers using the peer-to-peer lending platform
  • No prepayment penalties if you plan on paying down your debt early
  • Origination fee of 1% to 6% of your loan balance
Visit LendingClub

3. Citizens Bank

  • Citizens Bank personal loans come with an APR range of 5.99% to 18.99%
  • Borrow between $5,000 and $50,000
  • Repayment terms of three, four, five, six, or seven years
  • Qualify with a credit score of 680 or better
  • No prepayment penalties if you plan on paying down your debt early
  • No origination or administrative fees
Visit Citizens Bank

4. FreedomPlus

  • FreedomPlus personal loans come with an APR range of 4.99% to 29.99%
  • Borrow between $10,000 and $35,000
  • Repayment terms of two, three, four, or five years
  • Qualify with a credit score of 640 or better
  • No prepayment penalties if you plan on paying down your debt early
  • Origination fee of 0% to 5% of your loan balance
Visit FreedomPlus

5. SoFi

  • SoFi personal loans come with an APR range of 6.28% to 15.62%
  • Borrow between $5,000 and $100,000
  • Repayment terms of three, five, or seven years
  • No prepayment penalties if you plan on paying down your debt early
  • No origination or administrative fees
  • Late fee forgiveness after you make three consecutive on-time payments
  • Offers the ability to pause your repayment if you lose your job
Visit SoFi

Find the right tiny house financing option for you

You’ll want to shop around for tiny home financing the same way you’d shop for other types of loans:

  • Figure out your ideal borrowing amount, APR, and repayment term before looking for a lender to meet your specific needs.
  • Compare offers from all types of lenders, including traditional banks, credit unions, and online personal loan companies.
  • Use the APR to judge each offer accurately, as it includes both your interest rate and the lender’s fees.

The Genns, for example, wanted to borrow $75,000 at the lowest possible rate. They found a personal loan product that rewarded them for their excellent credit scores, offering a 7.00% APR and 20-year repayment term.

“After all the headache of trying to obtain an RV loan … we were so relieved and excited that a [personal] loan was going to work out for our home,” said Genn, who is planning a June move-in. “We quickly made a plan to pay the loan [off] in a speedy manner and avoid the downfall of a higher APR.”

In fact, they’ll increase their monthly payment from $581 to $1,500 to save $50,757 — and 15 years — on their loan.

Make use of our personal loan calculator to hatch a plan for your repayment. Plug in your borrowing amount, preferred repayment term, and an interest rate you can expect to be quoted. It’ll pump out your potential monthly payment and interest charges. Then figure out how to pay off the loan ahead of schedule.

There are plenty of strategies to pay off your loan early. For one, you could rent out your property, especially if your tiny home has a tiny spare room.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal LoansFixed rates from 6.325% APR to 15.615% APR (with AutoPay). Variable rates from 6.275% APR to 14.70% APR (with AutoPay). SoFi rate ranges are current as of July 3, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.275% APR assumes current 1-month LIBOR rate of 2.10% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  • Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  1. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  2. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

  • Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  1. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  2. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.73% – 29.99%$1,000 - $50,000
Check rate nowon SLH's secure site
6.28% – 15.62%1$5,000 - $100,000
Check rate nowon SLH's secure site
6.87% – 35.97%*$1,000 - $50,000Visit Upgrade
8.00% – 25.00%$5,000 - $35,000
Check rate nowon SLH's secure site
4.99% – 29.99%$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%2$5,000 - $50,000Visit Citizens
15.49% – 34.49%$2,000 - $25,000Visit LendingPoint
5.99% – 35.89%$1,000 - $40,000Visit LendingClub
5.49% – 18.24%$5,000 - $75,000Visit Earnest
9.95% – 35.99%$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.