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Bathroom renovations make up one of the most common home improvement projects. For those in need of financing, there are plenty of options including home equity loans, personal loans, credit cards, and store financing.
Below, you’ll be able to learn more about each of these products, as well as compare some of the options available to you.
On this page:
Cost of Remodeling Your Bathroom
Today, most homeowners can expect to pay somewhere between $6,000 and $15,000 to remodel their bathroom, but the total price depends on a variety of factors, with some efforts costing close to $25,000 or more.
Small projects, like a simple update of paint, hardware, or even flooring, may be below that $6,000 mark; however, more in-depth projects, like installing a shower or replacing a tub, will likely be costlier.
There are ways to save, of course. Homeowners can choose to do some of the work themselves, but for many, particularly when major renovations require an expert (e.g., plumber, general contractor, etc.), the expenses can quickly add up. Once tools, labor, materials, fixtures, and any potential fees are factored in, the price escalates, adding another factor to consider—financing the project.
Bathroom Remodel Financing Options
Much like how the price of your project depends on a variety of factors, so too does the financing option you choose. In the long run, the most affordable way to finance your project is to save up the money on your own, but for some, that’s not an option. The good news is that there are a few other ways to finance the bathroom of your dreams.
These options include bathroom remodel loans, credit cards, and more.
Home Equity Loans and Home Equity Lines of Credit (HELOC)
Both home equity loans and home equity lines of credit (HELOC) are bathroom remodel loans that leverage the value of your home. To obtain one, you’ll need to have a certain amount of equity built up in your home. Your home equity is the difference between your home’s market value and the balance of your mortgage.
Because a bathroom remodel can add to the value of your home, increasing equity, home equity loans for home improvements can be a good option.
Typically, lenders require that borrowers have at least 15% to 20% equity in their home, so this option may not be available to new homeowners. Additionally, though these loans often come with low interest rates, keep in mind that they are secured, using your home as collateral. This means that if you are unable to repay the loan, the lender can seize your home to recoup its losses.
Here are two lenders offering home equity loans for remodeling a bathroom.
|Product||Home equity loan||HELOC|
|Rates (APR)||As low as 5.205%||4.99% – 13.25%|
|Loan Amounts||$20,000 – $500,000||$15,000 – $150,000|
|Eligibility Criteria||Minimum credit score: 640|
Maximum loan-to-value: 90%
|Minimum credit score: 620|
Maximum loan-to-value: 80%
Personal loans are another common bathroom remodel loan. These types of loans can make funds available fairly quickly, as some lenders can get funds to borrowers in as few as one to three days.
In contrast to a home equity loan, personal loans are typically unsecured. In other words, if you fail to repay an unsecured personal loan you will not necessarily lose your house.
Here are two lenders offering personal loans that can be used for home improvements.
|Rates (APR)||5.95% – 19.99%* with AutoPay||7.99% – 35.97%|
|Loan Amounts||$5,000 – $100,000||$1,000 – $35,000|
|Repayment Terms||24 – 84 months**||36 or 60 months|
|Minimum Credit Score||660||620|
You may be tempted to use a credit card to finance your project, and though it’s plausible, there are a few things to keep in mind. Unless you’re taking advantage of an introductory 0% financing offer and can pay down the debt in the promotional period, credit cards can quickly become an expensive way to remodel. With an average APR hovering around 16% (and frequently more), interest can accumulate quickly.
If you can secure low interest rates and low costs, then it may be worth considering; however, if you’re already carrying a balance, have a high interest rate, or can’t pay it off quickly, consider your other options first.
Store & Company Financing
Today, many home improvement stores and companies offer lines of credit that can be used for home improvement projects. Some of these companies may even offer 0% introductory financing for qualified customers.
If you’re considering financing through a store or company, make it a point to thoroughly read the terms and conditions and evaluate the rates. Missing a payment or carrying a balance past the promotional period may end up costing you.
Among all the home improvement projects that fill to-do lists, remodeling your bathroom can prove to increase your home equity.
However, if you’re like many homeowners, you’ll need to secure financing to get the job done. Before you dive in, always consider the immediate and long-term financial impact, taking into account the rates, terms, and interest paid over the course of the loan or line of credit.
*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.
**Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of three years would result in 36 monthly payments of $303.99.
Author: Jeff Gitlen