6 Bathroom Remodel Financing Options

If you’re planning to remodel your bathroom, one of the first steps in the project is figuring out how to pay for it. The average cost for a bathroom remodel is $12,104.

If you don’t have enough saved up to pay for it, financing is available. Read on for information on six bathroom remodel financing options to consider. 

Types of Bathroom Remodel Financing

There are two main types of options for financing a bathroom remodel: secured financing and unsecured financing.

Secured Financing

A secured loan is backed by collateral. In the case of a home remodeling project, the collateral would typically be the house itself. Secured loans generally have lower interest rates. However, if you default on the loan, your house could be repossessed by the lender.

Unsecured Financing

Most personal loans are unsecured. An unsecured loan, such as a house improvement loan, does not require collateral. But unsecured loans typically have higher interest rates. If you fail to pay off the loan, your credit score may be damaged. 

Recommended: What Can Be Used as Collateral for a Personal Loan?

How Much Does It Cost to Remodel a Bathroom?

The national average cost to remodel a bathroom is $12,104. The cost can range from $6,645-$17,638, depending on the scope of the project. If your bathroom remodel uses premium materials and fixtures, or if it involves significant plumbing and electrical work, the cost could rise to more than $25,000. To figure out what type of renovations are best for your bathroom, learning tips for home remodels can help.

What Are My Bathroom Remodel Financing Options?

Financing a bathroom remodel can be done with:

• A home equity line of credit (HELOC)

• Direct financing

• Energy efficient mortgages

• Credit cards

• FHA 203(k) mortgages

• Personal loans

Here’s more information about each option.

1. HELOC

With a home equity line of credit, you can borrow against the equity you have in your home. You’ll typically need to have at least 15%-20% equity to qualify for a HELOC. You can borrow the funds as you need them up to a certain limit and repay the money monthly at a variable interest rate. HELOCs have lower interest rates because they use your home as collateral. However, if you fail to make payments, the lender could seize your house.

2. Direct Financing

Home improvement stores and some home remodeling companies may offer direct financing for a bathroom remodel. You receive a line of credit from the retailer, which you then use to pay for your bathroom renovation. Some companies may offer an introductory 0% APR. As long as you pay off the debt before the introductory period ends, you won’t owe interest. After that, interest will kick in, and it may be high. If you decide to go this route, read all the paperwork carefully to be sure you understand the terms and rates.

If you’re planning to remodel your bathroom, one of the first steps in the project is figuring out how to pay for it. The average cost for a bathroom remodel is $12,104.

If you don’t have enough saved up to pay for it, financing is available. Read on for information on six bathroom remodel financing options to consider. 

Types of Bathroom Remodel Financing

There are two main types of options for financing a bathroom remodel: secured financing and unsecured financing.

Secured Financing

A secured loan is backed by collateral. In the case of a home remodeling project, the collateral would typically be the house itself. Secured loans generally have lower interest rates. However, if you default on the loan, your house could be repossessed by the lender.

Unsecured Financing

Most personal loans are unsecured. An unsecured loan, such as a house improvement loan, does not require collateral. But unsecured loans typically have higher interest rates. If you fail to pay off the loan, your credit score may be damaged. 

Recommended: What Can Be Used as Collateral for a Personal Loan?

How Much Does It Cost to Remodel a Bathroom?

The national average cost to remodel a bathroom is $12,104. The cost can range from $6,645-$17,638, depending on the scope of the project. If your bathroom remodel uses premium materials and fixtures, or if it involves significant plumbing and electrical work, the cost could rise to more than $25,000. To figure out what type of renovations are best for your bathroom, learning tips for home remodels can help.

What Are My Bathroom Remodel Financing Options?

Financing a bathroom remodel can be done with:

• A home equity line of credit (HELOC)

• Direct financing

• Energy efficient mortgages

• Credit cards

• FHA 203(k) mortgages

• Personal loans

Here’s more information about each option.

1. HELOC

With a home equity line of credit, you can borrow against the equity you have in your home. You’ll typically need to have at least 15%-20% equity to qualify for a HELOC. You can borrow the funds as you need them up to a certain limit and repay the money monthly at a variable interest rate. HELOCs have lower interest rates because they use your home as collateral. However, if you fail to make payments, the lender could seize your house.

2. Direct Financing

Home improvement stores and some home remodeling companies may offer direct financing for a bathroom remodel. You receive a line of credit from the retailer, which you then use to pay for your bathroom renovation. Some companies may offer an introductory 0% APR. As long as you pay off the debt before the introductory period ends, you won’t owe interest. After that, interest will kick in, and it may be high. If you decide to go this route, read all the paperwork carefully to be sure you understand the terms and rates.

Check your rate today with Lantern.

The Takeaway

Remodeling your bathroom is an exciting project, but the costs can add up quickly. With an average price tag of over $12,000, finding the right financing plan is a smart first step. You may consider several options, from secured loans like a HELOC to more flexible, unsecured personal loans. Because every financing method has different interest rates and terms, it’s important to compare your choices carefully. Researching what works best for your specific budget now can help keep your renovation smooth and stress-free.