Kitchen remodel
Often large and planned. Home equity can cost less; a personal loan is faster.
Fund your renovation the smart way.
You can pay for a project with or without putting your home on the line. The right choice depends on the project size, how much equity you have, and how fast you need the money.
- Fast or low-cost. Personal loans are quicker; home equity is usually cheaper.
- Know your equity. It decides how much you can borrow against your home.
- Read promo terms. Deferred-interest offers can backfire.
Written by the Lendli Editorial Team under our editorial policy. Last reviewed .
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5 optionsFrom personal loans to cash-out refinance
DaysTypical personal loan funding time
80–85%Common limit on total home borrowing
How home equity borrowing works
Equity is your home's value minus what you owe. Home equity loans and HELOCs let you borrow part of it, usually at lower rates than unsecured loans, because the home is collateral.
Lenders cap your total borrowing, mortgage included, at a share of the home's value. In the example, an 85% limit on a $400,000 home allows $340,000 in total debt. With $250,000 already owed, up to $90,000 may be available.
Interest on home equity debt may be tax-deductible when the money buys, builds or substantially improves the home that secures it (IRS Publication 936). Ask a tax professional.
Common projects and how people pay for them
Project size and urgency usually point to the best way to borrow.
Roof or HVAC replacement
Urgent and hard to delay. Speed often makes a personal loan the practical choice.
Bathroom update
Mid-size projects fit well within typical personal loan amounts.
Energy upgrades
Solar, windows or insulation. Check for tax credits and utility rebates first.
Addition or ADU
Large projects often suit home equity or a cash-out refinance.
Repairs after damage
Check your homeowners insurance before borrowing.
Loan payment calculator
Estimated monthly payment
$336.89
Principal $10,000
Total interest $2,128
Total repaid $12,128
Estimates only, for fixed-rate installment loans with payments made on time. Your actual rate, fees and payment depend on the lender's review of your credit and income.
Estimate your project payment
The calculator is set to a $15,000 project at 9.99% APR over 60 months: $318.63 a month and $4,117.91 in total interest.
Enter your quote and the APR you are offered. For a HELOC, keep in mind that the rate is usually variable, so the payment can change, and many HELOCs start with interest-only payments during the draw period.
Get 3 contractor quotes before you choose a loan amount
Borrow for the quote plus a contingency of roughly 10% to 15% for surprises, rather than taking a second loan mid-project.
Your financing options compared
Five common ways to pay for a renovation, side by side.
| Option | Collateral | Rate | Speed | Best for |
|---|---|---|---|---|
| Personal loan | None | Fixed | Days | Small to mid projects, little equity, urgency |
| Home equity loan | Your home | Usually fixed | Weeks | Large one-time projects with a set budget |
| HELOC | Your home | Usually variable | Weeks | Projects paid in stages |
| Cash-out refinance | Your home | Fixed or adjustable | Weeks to months | Very large projects when a new mortgage rate makes sense |
| Contractor or store financing | Varies | Varies | Same day | Only if you can clear a promo balance in time |
What lenders look at
Personal loans focus on credit and income. Home equity loans add your home's value and your equity.
Credit score
Higher scores unlock lower rates on every option.
Debt-to-income ratio
Your monthly debts, including the new payment, divided by income.
Home equity
For secured options, the home's appraised value minus what you owe.
Project details
Some lenders ask for a quote or scope of work.
Deferred interest, explained
Some store and contractor offers say "no interest if paid in full" within a promotional period. If any balance remains when it ends, you can be charged all the interest back to the purchase date. A true 0% APR offer does not do this, so read which kind you are getting.
Personal loan vs. home equity: pros and cons
The trade-off is usually speed and safety versus cost.
Pros
- Personal loan: fastFunding often in days, with no appraisal.
- Personal loan: home not at riskNo lien on your house.
- Home equity: lower ratesSecured borrowing usually costs less.
- Home equity: bigger amountsBorrow more for large projects.
Cons
- Personal loan: higher APRUnsecured loans cost more than equity borrowing.
- Personal loan: lower limitsLarge remodels may exceed what lenders offer.
- Home equity: home at riskYou could lose the home if you cannot repay.
- Home equity: slower, with costsAppraisals and closing costs add time and money.
From quote to finished project
A simple order of operations keeps the budget under control.
Get 3 quotes
Compare scope, price and timeline from licensed contractors.
Set a budget
Add a 10%–15% contingency for surprises.
Compare financing
Personal loan vs. equity options by APR and total cost.
Pay in stages
Avoid paying most of the job upfront.
Keep records
Receipts and permits help with taxes and resale.
Protect yourself from contractor scams
The FTC highlights these warning signs when hiring for home improvement.
Door-to-door pressure
Be wary of unsolicited offers, especially after storms, and anyone pushing you to decide today.
Large cash upfront
Paying most of the job before work starts leaves you with little leverage.
Financing they arrange
Be cautious if a contractor steers you to a lender they know, especially if it involves your home as collateral.
Home improvement loan questions, answered
Common questions from homeowners planning a project.
What credit score do I need for a home improvement loan?
It depends on the loan type and lender. Better scores bring lower rates. Home equity products also depend heavily on your equity and debt-to-income ratio.
Can I get a home improvement loan with no equity?
Yes. An unsecured personal loan does not require home equity.
Is a HELOC better than a personal loan?
A HELOC can cost less and offer more money, but it uses your home as collateral and often has a variable rate. A personal loan is faster and does not risk your home.
How much can I borrow for home improvements?
Personal loans commonly reach about $50,000 or more with some lenders. Home equity borrowing depends on your home's value, your mortgage balance and the lender's limit.
Is home improvement loan interest tax-deductible?
Interest on home equity debt may be deductible if the money substantially improves the home that secures it. Personal loan interest generally is not. Ask a tax professional.
Ready to start your project?
Check your loan options in a few minutes, then compare against home equity.