Planning To Revamp Your Home? Here Are 4 Reliable Ways to Finance Your Project

Picture this: Your home’s structure is falling apart. Your house is now a shell of its former self. You wish to remodel the interior and exterior of your home. However, you are not sure how you’re going to pull this off. You are not how to pay for the home remodeling projects costs.

You wonder whether to take a loan. If so, which one? The market is awash with various loan options – equity line of credit loan, home equity loan, credit card loans, cash-out refinancing. There are a handful of financing options a homeowner can take to fund their remodeling project.

But which among these options is ideal? One thing is certain: revamping your home costs an arm. So you are better placed taking out a home loan to finance your home remodeling project from start to finish.

Before you can make any financial decisions, it is necessary to weigh out the different financing choices you have at hand. This post provides reliable ways you can finance your home remodeling projects.

  1. Have enough cash? Use it

Your cash reserve is perhaps the best way to finance your home remodeling project. Using your savings allows you to live a debt free life. But it has its after-effects. It is easy to exhaust your savings before you can even remodel half your kitchen. Why? Remodeling is an expensive affair.

But if you saved enough money to help maintain the project, well and good. But if you can’t comfortably finance the project and enjoy the end results, by all means, don’t use your savings. Don’t go for it lest you bleed your cash reserves. The drawback of using your savings on a project is that it excludes you from income tax deductions unlike if you had taken a home loan to finance your home remodeling project.

The good thing about using cash to finance your projects? It allows you to accumulate zero debts. Also, you don’t get to pay interest rates to pending loans. Paying cash guarantees a borrower peace of mind.

  1. Use your credit cards low interest offers

If you have a high credit score with a small remodeling project to handle (think under $15,000). Make sure to employ the use of low-interest credit card offers. Loan offers attract low or 0% interest rates.

When you take a credit card loan to finance a small remodeling project at home – at zero percent interest rates – paying off the loan is easier at a given period. Often, as a borrower, you are given a year, or one year and a half to repay off the loan.

If your home improvement project is relatively small and takes less time to pull off, this financing option is ideal for you. But before you take up credit card offers, it is important to know what you are getting yourself into. Understand more about realistic loans terms and loan fees chained to the time-limited offers.

You must realize these offers have a time limit. So repay your loan in full before the expiry period lest you repay the loan at high-interest rates and loan fees. What are the benefits of using low-interest credit card offers to finance your project? It is easy to qualify for them. It takes less time, too.

Also, you are not required to pay interest rates. Remember, keep a close eye on the time-limited offers and high-interest rates incurred when you fail to repay the loan on time. Perhaps the downside of using credit cards to finance your home improvement projects is not being eligible to income tax deductions.

  1. Get a small business loan or personal loan

If yours is a small home remodeling projects you need little financing. A personal loan or small business unsecured loan will come in handy for you. Unsecured loans are attractive to borrowers because they are easy to apply for.

Borrowers also don’t need collateral. Not to mention, you can take up as much loan amount depending on your project and credit score rating. Also, unsecured loans are ideal for small projects with a price tag of roughly $15,000 to $50,000.

Compared to a home equity loan, unsecured loans attract higher interest rates over time. You also get to repay your loan at high annual percentage rates (APR). If you’re not sure what you’re signing up to, or the interest rate you are eligible to pay and loan terms involved, don’t take up the loan.

If possible, avoid unsecured loans until you’re sure what you are getting into. Make sure to compare the terms and interest rates of each personal or unsecured loan. And analyze the costs of each loan. That way, you are assured of making informed decisions before kick-starting home improvement projects.

  1. Get a secure loan for larger home improvement projects

For large home improvement projects worth $50,000 or more call for secured loans. If your home equity is worth $50,000 or more, you can consider taking a home equity line of credit, home equity loan, or cash-out refinance to guarantee completion of your home remodeling project.

These loans come with low-interest rates compared to small unsecured loans. However, this comes at a price. In the case of a home equity loan, for instance, your home becomes the collateral. You hence risk losing your home in the event you fail to repay the loan.

But qualifying for a home equity loan requires having enough equity on your home. For example, if you pay $50,000 as a mortgage and your home’s value sits at $100,000 then your home’s equity is $50,000. You can use this money to finance home improvement projects.

If you are not ready to lose your home, don’t take up a home equity loan lest you lose your home to a lender (when you default). To understand the differences between these secured loans, you need to analyze them separately:

  • A home equity line of credit – If you qualify for a home equity line of credit loan you are often guaranteed of an open credit line. That means you can get credit any time you wish. However, retrieving the entire amount in full all at once is not an option. But occasionally you can access the money to fund your home remodeling projects.
  • Cash-out refinances – The cash-out refinance loan allows a borrower to cash out their mortgage and refinance it again with a new one. The cashed out money can finance all your remodeling projects. This form of financing attracts low-interest rates, and your loans life-span is extended.
  • Home equity loans – As previously mentioned, the value of your home is the equity. If you hence take a home equity loan, it is akin to taking a loan against your home. This is a risky move. Home equity loans are costly and so are annual percentage rates. To ensure you don’t lose your home repay the loan in full, on time. Avoid defaulting on the loan, too.


There are a handful of ways you can finance home improvement projects. Many of these ways come with different prerequisites including interest rates, annual percentage rate, loan fees, and loan terms.

Remember, you can use cash reserves or savings to finance your remodeling projects. If you have saved enough money, you can easily finance your projects from beginning to end at no extra costs. Then again, you can take advantage of credit card offers at 0% or better, apply for a personal loan or unsecured loan to finance your small home improvement projects.

If the remodeling project is bigger, it means you will require more money. So opt for a secured loan including a home equity loan, home equity line of credit, or cash-out refinance. Decide which financing option best fits your remodeling needs to enjoy a “new”, remodeled home.