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April 4, 2022

5 ways you can finance your home improvements

Ways to finance home improvements

Just used a home renovation calculator and found out your dreams are a little pricier than your budget can cover? Don’t stress. There are multiple ways you can bring your ideas to life with the help of some financing—from lending options that let you take advantage of your home’s equity to personal loansthat offer low monthly payments, fast funding, and large amounts.

The key is finding a financial solution that works for you. That’s where we come in. We’ve put together a guide on the various ways you can finance your home improvements to make things easier.

5. Credit card

Credit cards are a quick and convenient way to bring your home renovation ideas to life. This is especially true for minor renovations whose costs are less than your spending limit.

If you don’t have a credit card—or if you’re looking for one with better benefits and offers—now is your chance to apply for the right card and quickly reap the benefits.

Cards are typically easy to apply for. The key is to take advantage of limited-time introductory offers like a low APR or 0% APR on balance transfers (if you’ve already paid for your renovations) and cash back rewards.

With the right credit card and in the right situation, you can potentially avoid paying interest on minor home improvements and get cash back on every dollar you spend.

Looking for a credit card that can help you do more? Check out our suite of personal credit card solutions.

4. Home equity loan

One option for covering home renovation costs is to take out a home equity loan. This is a secured loan that uses your home’s equity as collateral.

If you have sufficient equity in your home today, you can receive a single large sum to help you finance one or multiple home improvement projects.

Typically, you should be able to borrow between 75% and 85% of your equity at a flat rate, which you can repay in as little as 5 or as many as 30 years.

This financing option does have its drawbacks. For example, you’ll likely need to pay closing costs on the money you borrow (between 2% and 5%) and other fees. Also, the time it takes to pay off your main mortgage loan will likely increase because you’re drawing from your home’s equity. And finally, if you fall behind on payments or can’t repay the loan, you run the risk of foreclosure.

3. Home equity line of credit (HELOC)

Another way you can take advantage of your home’s equity is with a home equity line of credit (HELOC). This is another secured financing option that uses your home’s equity as collateral. However, like a credit card, a HELOC gives you the ability to take out the funds you need—up to your spending limit.

As long as you have enough equity in your home—typically between 15% and 20% minimum—you can borrow between 60% and 85% of your house’s value, minus how much you currently owe on your mortgage.

Like with a home equity loan, it’s important to understand the disadvantages of getting a home equity line of credit. For starters, interest rates are not fixed with HELOCs. If your variable rate rises, so will your monthly payments. HELOCs are also associated with various fees. From home appraisal costs to administrative fees, be sure you know what you’ll need to cover in addition to the home renovation costs.

And don’t forget, since a home equity line of credit also uses your home as collateral, foreclosure is a risk if you cannot make your payments.

2. Construction loan

If you haven’t established much equity in your home yet—or your project is going to cost more than your equity can cover—you might consider a construction loan. A construction loan can help you build a new home or make significant improvements to your current space.

Construction loans are usually short-term financing options that give you a fixed amount of funds. While there are multiple types of construction loans, you’ll need to get a renovation construction loan specifically for home improvement projects.

This type of financing can be repaid as a separate loan, or it can be added to your existing mortgage. In general, these types of home renovation loans do not have fixed rates, so payments can increase if your rate rises.

Also, these loans are typically more difficult to secure than traditional mortgages. Lenders need to be assured that the home renovations will add value to the home in order to approve a borrower for this additional funding. This means providing details about the home renovation concept, expected costs, the timeframe, the contractor or company that will be completing the renovation, and more.

1. Personal loan

A personal loan from BHG Money can be a great way to finance your first—or next—home improvement project.¹

Our home improvement loans are unsecured, which means you don’t need to provide personal collateral to receive funds. You also don’t need to have a certain amount of equity in your home to qualify. Our home renovation loans let you focus on turning your dreams into reality—without putting your home at risk.

We offer flat rates and extended repayment terms,* which means you get affordably low monthly payments. And funding comes fast. With approval in as little as 24 hours and funds in your bank account in as few as 5 days,* you can kick off your renovations while your ideas are still fresh.
Want to make sure you get the right amount?

We tailor our financial solutions to work for you. Borrow as little as $20,000 or as much as $200,000*—and use your money your way. BHG Money personal loans give you the freedom to:


  • Improve your home
  • Consolidate and pay off personal debt
  • Invest in new opportunities
  • Cover unplanned expenses
  • Make major purchases


Ready to review potential loan options? See how we can help you fund your dream home renovations in as few as 30 seconds by visiting our Payment Estimator below, or call our team to speak to a loan specialist today.

*Terms subject to credit approval upon completion of application. Loan sizes and interest rates vary and are determined by applicant’s credit profile. Call for complete program details. For California residents: Consumer and commercial loans are made or arranged pursuant to the California Financing Law, License No. 603-G493.

¹Loans funded by Pinnacle Bank, a Tennessee bank. Member FDIC. Equal Housing Lender Equal Housing Lender