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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 $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.
The Home Depot Project Loan can only be used at The Home Depot stores and www.HomeDepot.com.
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.
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|
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.
|Annual Fee||Regular APR||Regular Balance Transfer APR||Cash Advance APR|
|Penalty APR||Late Fee||Returned Payment Fee|
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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