Bathroom Remodel Financing & Loans For Good & Bad Credit

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Bathroom Renovation Financing For Good & Bad Credit

When should I use a personal home improvement loan for my bathroom remodel? Besides the kitchen, the one room we Americans use most frequently in the household is the bathroom. It's no wonder that bathroom renovations are one of the most common home improvement projects. The National Association of Realtors 2017 Remodeling Impact Report found that bathroom remodels rank among the highest in bringing personal joy and satisfaction from a home remodeling project. Outdated features and small bathrooms people can't stand anymore are among the main reasons homeowners reported engaging in bathroom remodeling projects. 2016 U.S. Houzz Bathroom Trends Study. But sometimes bathroom renovations are a necessity. Aging, ill, or disabled household members may need a more functional bathroom space to meet their needs. Leaking pipes or outdated fixtures waste resources and can result in elevated utility and maintenance costs, water damage, mold, and toxic hazards. Fire, flood, and natural disasters can also precipitate an emergency need for bathroom restoration.

How does a bathroom remodel loan work?

How a bathroom remodel loan works depends on the type of loan you choose. If you use a term loan such as a personal loan or home equity loan they should work similarly. Most term loans are issued as a lump sum that can be repaid over a set term with interest. If you use a line of credit you’ll most likely need to withdraw the money you need. Regardless of the type of loan you use, it should provide the money you need to remodel a bathroom or bathrooms, while allowing you to make affordable repayments.

How much does a bathroom remodel cost?

As with all home remodeling projects, the costs for a bathroom remodeling project can vary widely. The National Association of Remodeling reports that the average cost of a bathroom remodel in the U.S. ranges from $9600 to $11,000, ($23,000 for high-end remodels).

The cost of a bathroom remodel can depend on a handful of varying factors. However, on average most bathroom remodels cost between $9,600 to $11,000. Bathroom remodels are one of the best home improvement investments. Statistics show that bathroom remodels should increase your home value. Most homeowners see an ROI of up to 80 percent from bathroom remodels. There are 8 core components involved with most bathroom remodels. These components include cabinets and hardware, countertops, faucets and plumbing, doors and windows, walls and ceilings, fixtures, and flooring. In addition to these core components, homeowners should account for installation and design fees. Out of all 8 components, cabinets usually consume the largest portion of the budget. However, in most cases installation is the biggest ticket. If you can’t afford a full bathroom remodel, you can still make a lasting difference with a few small improvements. New lighting, a new vanity, a fresh coat of paint, or new countertops can transform the look of your bathroom. Homeowners trying to adhere to tight may also want to consider doing a bathroom remodel in pieces. In addition, some materials may be cheaper than others so you should shop around and get creative. If you are able to do any of the installation on your own you can save a lot of money.

Does a bathroom remodeling project provide a good return on investment?

If you are considering selling your home or building up the equity of your home, bathroom remodels done right can yield a 50% return on your investment. Factoring in the increased ability to attract buyers, you may find it's a project you can't overlook.

Can You Finance Finishing a Bathroom?

Given the current financial climate, not all homeowners have the cash on hand or collateral they need to start bathroom restoration and remodeling. Luckily, there are several financing options you can choose from to secure a bathroom remodeling loan and get your project off the ground.

What Is a Bathroom Renovation Loan?

Bathroom remodeling loans are personal loans used for home improvement upgrades, restoration, additions, and complete remodeling. Personal loans are just one of the many options available for financing home improvement projects around your house. 

What are my bathroom remodel financing options?

Homeowners considering financing a bathroom remodel should explore the options available. Some homeowners may qualify for all the options and others may only qualify for one or two. Homeowners should compare options and choose the one that makes the most sense financially. In some cases, you may have had a leak or broken pipe or something go wrong which has forced you to repair damages and remodel. If this is the case, you may need the funds quickly to get your bathroom back in working order. Personal loans are usually one of the fastest options for bathroom remodel financing. Let’s compare the top 3 options for bathroom remodel financing. . .

HELOC (Home Equity Line of Credit)

A HELOC provides homeowners with a revolving line of capital that can be used for bathroom remodels. HELOC’s allow homeowners to draw cash as needed and access a specified amount of capital. In most cases, homeowners can withdraw cash within the first 10 years of the loan. After the draw period, there is a repayment period. Repayment periods for HELOC’s is usually 2- years. You should be able to repay the money before the repayment period if you want. Since you may not use the full loan amount with a HELOC, you should only be charged interest on the amount of money you use. HELOC’s may have a variable interest rate during the draw period. In some cases, you may be able to lock in a fixed rate during the repayment period. This can make them a little more difficult to manage than other options. To qualify for  a HELOC loan you’ll need to have equity in your home. Most lenders allow homeowners to borrow about 75% to 90% of their available home equity with a HELOC.This means you should have 20% or more equity in your home to apply for a HELOC. HELOC loans can have lengthy approval processes. In addition, if you default on a HELOC loan you may risk losing your home. Most banks and credit unions offer HELOC loans.

Personal Loan

Personal loans are a low risk bathroom remodel financing option that are usually pretty easy to qualify for. Personal loans can provide homeowners with an unsecured lump sum of cash that can be repaid over time with interest. Homeowners do not need to provide collateral or money down for an unsecured personal loan. While personal loans may have slightly higher interest rates, the extra cost is easy to justify when you consider the reduced risk. If you default on a personal loan you may affect your credit score but you should not lose your home.  In addition, most personal loans have fixed interest rates making them easy to manage with predictable monthly payments. PrimeRates has lending partners that specialize in bathroom remodel financing. Homeowners can obtain personal loans up to $100,000 with terms up to 12 years and rates starting at just 3.99% through PrimeRates. If you are considering a personal loan for bathroom remodel financing you should apply through PrimeRates

Home Equity Loan

Home equity loans are comparable to personal loans in some ways and HELOC loans in other ways. Similar to personal loans, home equity loans provide homeowners with a lump sum of cash that can be repaid over time with interest. Similar to HELOC loans, home equity loans require homeowners to have equity in their home. Some lenders offer home equity loans with terms up to 20 or 30 years, which is much longer than most personal loan terms. Longer terms can mean lower monthly payments. However, longer terms can also mean more interest. In most cases, homeowners can borrow between 80% to 85% of their home’s equity. When you use a home equity loan you are borrowing against your home and using it as collateral. This means if you default on the loan you may risk losing your home. 

Can you finance smaller bathroom improvements or only remodels?

Smaller bathroom improvements can be financed. If you are financing less than $10,000 we recommend using a personal loan. Some lenders that provide personal loans have minimum loan requirements as low as $1,000. 

What is the estimated ROI on a bathroom remodel?

As we mentioned earlier, most homeowners see an ROI of about 80% from bathroom remodels. Remodeling a bathroom or bathrooms can also help you home sell faster and make it more desirable. 

Do I have to have good credit to apply for a bathroom remodel loan?

Good and bad credit borrowers can apply for a bathroom remodel loan. If you have credit challenges we recommend using a personal loan or a cosigner. PrimeRates has lending partners that can help all credit types secure a bathroom remodel loan. Whether you use a secured or unsecured bathroom remodel loan, you should be able to apply with a cosigner. Ideally, the cosigner should have good credit and solid income. 

Best Bathroom Remodel Financing Lenders

LightStream

» MORE: LightStream Personal Loans Review

SoFi

APR range: 5.99% to 16.99% APR (with AutoPay)
Available loan terms: 24-84 months
Loan amounts: $5,000—$100,000
Time to fund: Typically 7 days
Origination fee: None
Credit needed: 680+
Income needed: $50,000+
Soft Credit Check? Yes
Best for: Young professionals and graduates, good credit
Click "Check Rates" to apply to SoFi

» MORE: SoFi Personal Loans Review

Home Equity Line of Credit - Also known as  HELOC, is credit extended to you by a lender, secured by the equity in your home. Once obtained, homeowners have a revolving line of credit to use for project expenses. Like a credit card, you can pay all of it or some of it monthly. Unlike a credit card, because they are secured second mortgages, the interest rates are among the lowest. But there is some risk. Since your home is used for collateral, If you are unable to make your payments, you could lose your home. 

Figure

APR range Starting at 4.99%
Available loan terms Up to 30 years
Loan amounts Borrow up to $150,000
Fees Low origination fee
Credit needed Minimum credit score 600
Best for Major Purchases, Home Improvements or Consolidating Debt
Click "Check Rates" to apply to Figure

» MORE: Figure.com home equity review

Credit Card - There are a few things to keep in mind before funding your home improvement project using a credit card. If your remodel is reasonably low-cost, and you can take advantage of an introductory 0% financing offer, this may be an option for you to consider. Generally speaking, credit card financing comes with a lot higher risk. Keep in mind that interest accrues every month, driving up the final cost of your renovations considerably.

How do I apply for bathroom remodel financing?

Most banks, credit unions, and online lenders offer bathroom remodel or home improvement loans. Regardless of which lender you choose, you’ll most likely need to start with an application. Online lenders usually have less strict requirements and faster funding processes. If you decide to use an online lender you can apply through PrimeRates. Here are 3 easy steps to apply for a bathroom remodel loan using PrimeRates. . .

#1. Submit a short application

#2. Review bathroom remodel loan offers

#3. Select an offer & finalize your loan

Are you ready to go for it?

Bathroom upgrades and renovations will likely bring increases in both your satisfaction and in the equity of your home. Use this information to support your research in obtaining the right funding solution for you. Before you sign the bottom line, be sure to consider both the hard costs and the financing costs of your project to be clear about the long-term financial impact. 

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