5 Ways to Finance Paving Your Driveway

Lauren WardUpdated September 30, 2022

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

If your driveway needs improvements, paving it can enhance the exterior of your house, making your home more attractive and welcoming. It can also pay off in the long run: Paving your driveway can help add to the value of your property. If you don’t have the money to pay for the project upfront, there are driveway financing options available. Here’s what you need to know about driveway paving and how to finance it.

Understanding Driveway Paving Financing

There are several different types of financing for driveway paving, including credit cards, home equity loans, and personal loans. Each option works differently. For instance, personal loan fundamentals include borrowing money, and paying it back with interest in monthly installments for a certain period of time.Before you start to explore driveway financing options, it’s helpful to establish a budget for home improvement projects like this one. The cost of paving a driveway typically ranges from $2,000 to $7,000, depending on what kind of driveway you choose. You’ll want to determine what you can afford and the amount you can comfortably borrow and repay without feeling financially stretched.

Does Improving Your Driveway Improve Your Home Value?

Paving your driveway, and improving the look of your property, can help add value to your home. In fact, enhancing curb appeal, including paving a driveway, can account for as much as 7% of your home’s value.

Different Driveway Types

The cost to pave a driveway varies, depending on the type of driveway you choose. Here are some of the most common options:

Gravel Driveway

A gravel driveway is resilient and can help with water runoff. It is one of the most affordable types. The cost of a gravel driveway is about $1 to $3 a square foot.

Concrete Driveway

Concrete is commonly used to pave driveways. It’s fairly affordable and easy to customize with different patterns and colors. The cost of a concrete driveway is about $4 to $8 a square foot. Customizing your driveway will increase the price.

Asphalt Driveway

An asphalt driveway typically costs $7 to $13 per square foot. It’s durable and can last 15 to 30 years. However, you will likely need to reseal an asphalt driveway approximately every three years.

Brick or Stone Driveway

Because of the cost of the materials, and the time and effort they take to install, a brick or stone driveway is generally the most expensive driveway option. You’ll pay $10 to $70 per square foot. Some homeowners may consider the price worth it, since brick or stone driveways tend to be the most attractive and they’re also strong and durable.

New Driveway Paving & Repaving Financing Options

When it comes to driveway paving financing, you have a number of options to choose from, including:

HELOC

A home equity line of credit (HELOC) uses your home’s equity as collateral for a line of credit. You’ll need to have at least 15% equity in your home, and a lender will usually allow you to use 80 to 90% of that equity. For instance, if you have $20,000 worth of equity in your home, a lender might let you borrow between $16,000 to $18,000. HELOCs often have low interest rates. However, the rates tend to be variable and can fluctuate over time, which means your payments may increase. And if you fail to pay off a HELOC, the lender can seize your house.

Credit Card

If you have a good credit score, you may be able to qualify for a new credit card with a 0% introductory APR to pay for your driveway project. That way, if you pay off the cost of the driveway before the promotional period ends, you won’t owe any interest.You could also use a rewards credit card to earn points or cash back if you charge the cost of driveway paving to the card. But you will have to pay interest on the amount you owe unless you pay off the balance right away.

Home Equity Loan

A home equity loan is similar to a home equity line of credit in that you need to have about 20% equity in your home. You can access about 80% of that equity for the loan. The difference is that with a home equity loan, you get one lump sum, rather than a line of credit, and the interest rate, which tends to be lower than with some other financing options, is fixed and won’t change. However, because a home equity loan, like a HELOC, uses your house as collateral, you could lose your home if you default on payments.

Cash

If you have enough money to pay for your driveway out of pocket, this could be a good option for you. Just make sure that paying for your driveway won’t stretch your finances too much or empty your bank account. You should have enough money on hand for an emergency, in case something comes up.

Personal Loans

With a personal loan, you get a lump sum of money that you pay back over time with interest. The interest rate with personal loans can be higher than with some other options, but because these loans are unsecured, they don’t require collateral.There are all types of personal loans you can choose from, including large personal loans, in case you want to do other home improvements along with paving your driveway. To qualify for a personal loan you will need to meet the personal loan requirements, which can vary from lender to lender. Generally, you will need to give proof of employment and income. A lender will also look at your debt to income ratio, which is your gross monthly income compared to your monthly debt. Once you are approved for a personal loan, you can typically get the money within a few days or less.

Compare Personal Loan Options With Lantern

Paving a driveway can cost several thousand dollars, but it will increase your home’s curb appeal and help add to its value. Fortunately, there are ways to finance a new driveway, whether you opt for an asphalt driveway or something more customized with stone or brick.As you’re exploring your financing options and looking at personal loans, Lantern by SoFi can help you through the process. In our marketplace, you can compare personal loans, along with their interest rates and terms, by filling out one simple form. With Lantern, you can conveniently find the best option for your needs.Compare personal loan options with Lantern.

Frequently Asked Questions

What is the most common driveway financing option?

How does driveway paving financing work?

Can you use a personal loan to finance paving a driveway?

Photo credit: iStock/PC Photography

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About the Author

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.

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