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Review

Pros and Cons of The Home Depot Project Loan

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Brendan Harkness By Brendan Harkness Jan 17, 2020 | Updated Apr 06, 2020
Our rating
Min. credit level: Fair
Annual Fee: $0
Regular APR: 7.99% Fixed

The Home Depot Project Loan

Our rating
Fair Min. credit level
Apply Now See Alternatives

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 $55,000) 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 www.HomeDepot.com.

The Home Depot Project Loan

The Home Depot Project Loan

Our rating
Min. credit levelFair
Details
Annual Fee$0
Regular APR7.99% Fixed
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securely on the issuer's website

  • Fixed 7.99% APR
  • Credit lines up to $55,000
  • 84 months to pay off loans
  • 6-month buying window to make all of your project purchases
  • No annual fee

The information related to The Home Depot Project Loan has been collected by Credit Card Insider and has not been reviewed or provided by the issuer or provider of this product.

The Offer

Once you’re approved you’ll be granted a loan of up to $55,000. 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
$45,000 $702 $13,968
$50,000 $780 $15,520
$55,000 $857 $17,072

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

For the largest loan of $55k you’ll end up paying over $15k 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
None None None

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.

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Alternatives to the Home Depot Project Loan

Looking for other ways to pay off large balances over an extended period of time? Here are a few options you can use at different retailers.

Lowe's Advantage Credit Card

Lowe's Advantage Credit Card

Our rating
Min. credit level Fair
Details
Annual Fee $0
Regular APR 26.99% Variable
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securely on the issuer's website

The Lowe's Advantage Credit Card (Review) is a Lowe’s store card that offers some discounts and different financing options.

If you prefer Lowe’s to Home Depot, this card would be more your style. It features 5% off most purchases, unless you choose a special financing option.

If you make a purchase of at least $299 you’ll qualify for six-month deferred-interest financing, and purchases of at least $2,000 are eligible for 84-month financing at 7.99% APR (current offers at the time of publication).

But be warned — just like Home Depot’s deferred-interest financing, if you choose the six-month option and miss a payment or fail to pay back the full balance, you’ll get hit with all that deferred interest. So you’ll get some additional time to pay off purchases, with the caveat of needing to do so responsibly.

Spending Rewards
  • 5% off or special financing at Lowes
  • Purchase APR: 26.99% Variable
  • Annual fee: $0
  • 5% off when you decline any special financing offers
  • Special Financing: 6 months special financing for purchases of $299 or more, or up to 84 months special financing with a minimum purchase of $2,000
  • No annual fee
Chase Freedom®

Chase Freedom®

Our rating
Min. credit level Good
Details
Annual Fee $0
Regular APR 16.49% - 25.24% Variable
Apply Now

securely on the issuer's website

The Chase Freedom® (Review) is a popular option for a rewards card with a good cash back program, featuring 5% cash back in quarterly rotating categories.

Good for yearly spending across multiple categories, it provides a wider variety of spending options for your potential projects. It’s a pretty rewarding card that’ll earn you cash back, unlike The Home Depot Project Loan, while still giving you quite a while to pay off purchases before accruing interest. You get access to some helpful benefits, whereas with the Project Loan you won’t get anything aside from a very long time to pay off the balance.

If you don’t want to be limited in where you can spend when it comes to your projects and want to earn cash back, this card is one to consider.

Spending Rewards
  • 5% cash back on Lyft purchases (through March 2022)
  • 5% cash back on the first $1,500 spent per quarter (then 1%), in categories that rotate throughout the year (see calendar below)
  • 1% cash back on all other purchases
Introductory Bonus Offer
  • $150 cash bonus for spending $500 in the first 3 months after account opening
    • Return on spend: 30%
Quarter 2019 Categories 2020 Categories
January – March
  • Gas Stations
  • Tolls
  • Drugstores
  • Gas Stations
  • Streaming Services
  • Internet, Cable, Phone Services
April – June
  • Grocery Stores
  • Home Improvement Stores
  • Grocery Stores
  • Fitness Club & Gym Memberships
July – September
  • Gas Stations
  • Streaming Services
TBA
October – December
  • Department Stores
  • PayPal
  • Chase Pay
TBA

Learn more about the Chase Freedom’s categories and how to maximize them each quarter.You’ll need to manually activate your 5% categories for each quarter. You can do this by logging in to your online account.

  • DoorDash membership: Cardholders can subscribe to DoorDash’s DashPass membership for free for three months, and then get a 50% membership discount for the following nine months.
  • Shop through Chase/Chase Offers: Get more cash back at select retailers with the Shop through Chase marketplace and Chase Offers.
  • Credit Journey: Access the Credit Journey credit monitoring tool, which offers a way to keep track of your credit from month to month. It provides your VantageScore 3.0, based on your TransUnion credit report.
  • Shopping and travel protections: Purchase Protection, Extended Warranty, Roadside Dispatch, Trip Cancellation/Interruption, and more
  • Purchase and Balance Transfer APR: 0% for 15 months, then 16.49% - 25.24% Variable
  • Annual fee: $0
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter!
  • Unlimited 1% cash back on all other purchases – it’s automatic
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49 – 25.24%.
  • 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5.
  • No annual fee
  • Cash Back rewards do not expire as long as your account is open and there is no minimum to redeem for cash back.
  • Free credit score, updated weekly with Credit Journey℠
Chase Freedom Unlimited®

Chase Freedom Unlimited®

Our rating
Min. credit level Good
Details
Annual Fee $0
Regular APR 16.49% - 25.24% Variable
Apply Now

securely on the issuer's website

The Chase Freedom Unlimited® (Review) is a great general-use card for all manner of spending.

Unlike The Home Depot Project Loan, you’ll earn rewards on every purchase with the Chase Freedom Unlimited, and still get a solid amount of time to pay them off. You’ll get the added flexibility of being able to use this card for all of your spending, including home projects, and get access to some helpful benefits such as a credit monitoring tool and the opportunity to earn more cash back with select retailers.

If you want a simple, rewarding option that still offers plenty of time to pay off purchases while earning cash back (plus a nice bonus), this might be the card for you.

Spending Rewards
  • 5% cash back on Lyft rides
  • 1.5% cash back on all other purchases
Introductory Bonus Offer
  • $150 cash bonus for spending $500 in the first 3 months
    • Return on spend: 30%
  • DoorDash membership: Cardholders can subscribe to DoorDash’s DashPass membership for free for three months, and then get a 50% membership discount for the following nine months.
  • Shop through Chase/Chase Offers: Get more cash back at select retailers with the Shop Through Chase marketplace and Chase Offers.
  • Credit Journey: Access the Credit Journey credit monitoring tool, providing a way to keep track of your credit from month to month. This provides your VantageScore 3.0, based on your TransUnion credit report.
  • Shopping and travel protections: Purchase Protection, Extended Warranty, Travel Accident Insurance, Auto Rental Collision Damage Waiver, and more
  • Purchase and Balance Transfer APR: 0% for 15 months, then 16.49% - 25.24% Variable
  • Annual fee: $0
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Earn unlimited 1.5% cash back on all purchases.
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49 – 25.24%.
  • 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5
  • No annual fee
  • No minimum to redeem for cash back
  • Cash Back rewards do not expire as long as your account is open
U.S. Bank Visa® Platinum Card

U.S. Bank Visa® Platinum Card

Our rating
Min. credit level Fair
Details
Annual Fee $0
Regular APR 14.99%–24.99% Variable
Apply Now

securely on the issuer's website

The U.S. Bank Visa® Platinum Card offers one of the longest introductory APRs for both purchases and balance transfers available.

If you need some extra time to pay, the U.S. Bank Visa Platinum gives you 20 billing cycles to do so. It provides another alternative if you don’t feel like using the Home Depot loan for seven years, accruing interest as you go. It also allows you to make purchases at stores other than Home Depot, giving you more flexibility when it comes to choosing your project supplies, and you’re not stuck with a six-month window.

So if you’re looking for a card that won’t limit where you can shop and still provides a long time to pay off balances, this might be a good option.

  • Free credit score: Get access to your VantageScore 3.0, based on your TransUnion credit report.
  • Shopping and travel protections: Cell Phone Protection, Extended Warranty Protection, Auto Rental Collision Damage Waiver, and more
  • Purchase and Balance Transfer APR: 0% for 20 billing cycles, then 14.99%–24.99% Variable
  • Annual fee: $0
  • 0% introductory APR for 20 billing cycles on purchases and balance transfers, then 14.99%–24.99% Variable
  • Savings at various retailers through Visa Discounts
  • Travel and shopping protections
  • Cell Phone Protection
  • Free VantageScore based on your TransUnion credit report
  • No annual fee

If 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 end up paying a lot of interest? Leave your own review for other visitors below, we’d love to hear from you!

Or learn more about reward credit cards and see our picks for the Best Reward Cards.
At a glance

Created to help make large home projects through Home Depot more affordable, you’ll get 84 months to pay off big expenses. But you’d do well to pay off your project as soon as you can, as you’ll end up paying much more than you would have due to interest.

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The information related to The Home Depot Project Loan has been collected by Credit Card Insider and has not been reviewed or provided by the issuer or provider of this product.

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