Pros and Cons of The Home Depot Project Loan

Brendan Harkness

Brendan Harkness | Reviews

Sep 23, 2015

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The Home Depot offers The Home Depot Project Loan for regular customers to pay for a single large job at home (it’s not meant for contractors).

This card isn’t for earning rewards or getting benefits. Instead, it provides a very large credit limit (up to $40,000) for home building and renovation projects, and gives you a very long time (7 years) to pay it off.

If you want to shop at The Home Depot but you’re not looking to finance a large project, you’ll be better off with a basic rewards credit card.

Read on to learn how this card can help pay for your next home renovation, and if this option will really be worth it for you.

Where Can I Use This Card?

The Home Depot Project Loan can only be used at The Home Depot stores and

The Home Depot Project Loan

For People with
Fair Credit

  • Annual Fee: $0
  • Interest Rate: 7.99% (Fixed)
Quick Card Facts
  • Fixed 7.99% APR
  • Credit lines up to $40,000
  • 6 months to make all of your project purchases
  • No annual fee

The Offer

Once you’re approved you’ll be granted a loan of up to $40,000. Then you’ll have 6 months to make purchases for your project.

During that 6-month period, you’ll only need to make payments on the interest for any purchases you make, at a fixed rate of 7.99% APR.

After the 6 months are over you’ll have up to 84 months to pay off the balance, at the same fixed rate of 7.99% APR. There’s no penalty for prepayment.

How Much Will The Project Loan Cost?

Paying off a large balance over 84 months at a rate of 7.99% APR will end up being quite expensive.

Here’s a breakdown of your monthly payments for various loan amounts over 84 months, along with how much more you’ll end up paying over the original balance.

Loan Amount 84 Monthly Payments Amount Paid Over Original Balance
$2,500 $39 $776
$5,000 $78 $1,552
$10,000 $156 $3,104
$20,000 $312 $6,208
$30,000 $468 $9,312
$40,000 $624 $12,416

As you can see, you’ll end up paying over $700 extra for the smallest loan listed here.

For the largest loan of $40k you’ll end up paying over $10k extra – that’s over 30% the original loan amount!

So you’ll be paying quite a bit more for your project if you use this loan. But, you can cut down on those extra costs substantially by paying your balance in full well before the 84-month due date.

If you can pay off your entire project in full immediately you’ll be able to save a lot of money compared to this plan.

Or, you could consider using a regular rewards credit card, maybe one with a 0% introductory APR, to pay for a smaller portion of your project.

The Costs & Fees

Annual Fee Regular APR Regular Balance Transfer APR Cash Advance APR
$0 7.99% (Fixed) N/A N/A
Penalty APR Late Fee Returned Payment Fee
See Terms See Terms See Terms

The Bottom Line

If you really need a large credit line to pay for a construction project, this card can help you out.

But you’ll end up paying a lot more for that project if you take the full 84 months to pay it off and incur the maximum amount of interest.

This deal will be more worthwhile the earlier you can pay off the entire balance.

If you can afford it, it will be much cheaper to pay off your entire project in full immediately.

The Home Depot also offers The Home Depot Project Loan, meant to help you fund big home improvement projects. It’s available with a very high credit limit and provides long-term financing, but you may be better off without it if you’re going to pay a lot of interest.

Or, consider using a general rewards credit card that will give you a bit of cash back for your purchases. You may not be able to fund your entire project with a smaller credit line, but you can put some purchases on it. Many even come with 0% introductory APR periods that last pretty long.

If you this review was helpful to you, go ahead and share it with a friend! How do you like to shop at The Home Depot? If you use the Home Depot Project Loan, do you mind paying the interest? Let us know in the comments below, we’d love to hear from you!

  • Lori Brock

    This information is not totally accurate and, I believe, doesn’t paint an accurate picture. The current advertised rate for a Home Depot Project Loan is 7.9%. However, we recently got our loan for 5.9% when they were willing to match a major competitor’s rates. We needed new carpet very badly and were able to get it for an affordable price, and at what I consider a very reasonable rate. I’ve very thankful for the HD Project Loan, the rate we got, and for the fact that we have a full 84 months to pay it off; plus we have beautiful, new, very soft carpet (which the major competitor didn’t have)! Thank you, Home Depot!

    By the way, it makes sense that if the company is going to offer you a loan, you should only be able to buy from them. That’s the reason for offering the loan.

    • Janet Martin

      Lori, if you read this I would greatly appreciate if you could disclose who the major competitor was who was offering the 5.9% rate that got HD to lower their advertised 7,9% for you. We are looking at the HD Project Loan and would love to get them to lower the rate! Thank you!

      • Levelheadsteve


        • Gae Xavier

          What I don’t get is, the front-loaded interest is paid before principle. So they loaned me $10k for 6 months. I will only end up needing about $3k for this project. Therefore, I’ll pay 7.9% interest on $10k for 6 months? Then what? I only owe $3K principle plus 7.9% for the duration. Or am I paying 7.9% on $10K available loan even though I’m only charging a $3K purchase?

          Please explain. Thank you!

          • Kimberly Rotter

            You will only pay interest on your actual charges.

        • Kimberly Rotter

          The problem with the Lowe’s offer is that I believe it applies to a single receipt. You don’t get six months to shop. It’s a one-time deal. Please correct me if I’m wrong.

          Also, both Lowe’s and Home Depot offer interest free promos ranging from six to 18 months. They are all deferred interest offers (so be careful).

    • Kimberly Rotter

      Thanks for your comments. Terms have changed several times since this post originally appeared, and we have updated the post with the most current details. The product has improved significantly and I’m glad it worked well for you.

      • Gae Xavier

        Thank you! For a new, all glass, insulated garage door with a WiFi, silent belt opener and install it was perfect. Getting a home equity loan is scary, since it ties up my home title if I were to need to sell ASAP.

        • Anonymous

          is this program based off of credit score or home equity ?

          • Kimberly Rotter

            Credit score.

          • Gae Xavier

            credit score

          • Gae Xavier

            I believe it was my credit score.

          • Gae Xavier

            Credit score.

    • aryeh

      Hi Lori Thanks for sharing that trick, how and when did you negotiate the better rate?

  • TommyJ

    So from what I’m reading… the 7th month thru XX term months are all the principal spread out.

    Months 1-6 are just interest. So, conceivably, couldn’t you wait until the end of the 5th month, purchase everything at once and only pay interest one time?

    • Kimberly Rotter

      Months 1-6 the customer is allowed to pay interest only (but can make additional payments against principal if desired). If you don’t make a purchase until the sixth month, no payment will be required in the first five months.

      Months 7-84 are “normal” payments, or in other words principal plus interest. At all times, interest is charged only on the actual outstanding balance (not on the credit limit).

      At any time during the time the account is open you can pay more than required. All extra payments are applied to unpaid principal, and the total interest charges will be lower as a result.

      The fixed payment amount assumes that you will take the full 84 months to pay off the loan. But if you prepay at all (a little at a time or in full at any time), the total cost of the loan will be lower and your bill will be adjusted accordingly. Your payments will not be changed, but you’ll shorten the life of the loan.

      Hope that helps.

  • Rhina Moloon

    Does anyone knows the minimal credit score to qualify for the HD project loan?

    • Kimberly Rotter

      Home Depot will not specify a minimum credit score to qualify. Their reps explain that consumer credit history is pulled from Experian, and they consider multiple factors when reviewing an application. Credit score is one factor. So are debt ratio, presence of collections, reason you need the loan, etc.

      Anecdotally, you will find people online who claim to have been approved with credit scores in the 640-660 range. Again, this range is not confirmed by HD.

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