A bathroom remodel is one of the most popular home improvement projects for American homeowners who want to enhance comfort, boost home value, or simply refresh a dated space.
However, even a modest upgrade can come with a significant price tag—which means you need to think about bathroom remodel financing.
In this guide, we’ll explore different ways to finance your bathroom remodel, ultimately highlighting why a home equity line of credit (HELOC) can be an excellent choice.
How much can a bathroom remodel cost per square foot?
Since material costs fluctuate, it’s challenging to estimate bathroom remodeling expenses based on square footage alone.
Larger spaces typically result in higher material and labor costs, allowing for some general estimates. The average cost of a bathroom remodel ranges from $600 to $800 per square foot.
However, this remodel can also give you a sizable return on investment (ROI), increasing the incentive to get this done right.
Ways you can achieve bathroom remodel financing
Several financing options are available for homeowners, but choosing the right one can depend on your personal financial situation, the size of your remodel, and how much flexibility you need in repaying the loan.
Cash savings
Paying for a bathroom remodel out of pocket is the simplest option.
Using cash means you won’t incur any debt, pay interest, or have to worry about loan terms. Cash can be a great way to avoid financing fees if you’ve been saving specifically for home improvements.
However, there are some drawbacks to using cash. If your remodel goes over budget—something that happens more often than homeowners expect—you may not have the extra funds readily available.
Additionally, if using your savings depletes your emergency fund, you could leave yourself financially vulnerable should any unexpected expenses arise after the remodel.
Personal loans
These are unsecured loans, meaning you won’t need to offer collateral, like your home, to qualify.
Most personal loans have locked-in interest rates and repayment terms, usually ranging from three to seven years.
Personal loans might be an attractive option for smaller remodels, as they offer a predictable monthly payment. The application process is usually quick, and many lenders provide fast approval and funding.
However, since personal loans are unsecured, interest rates are often higher than HELOCs.
If you have a lower credit score, you may also find it difficult to qualify for favorable rates.
Credit cards
For homeowners planning a small or mid-range bathroom remodel, credit cards may seem like an easy way to pay for materials and labor.
Many credit cards offer attention-grabbing introductory 0% APR periods, often lasting between 12 and 18 months, which can give you time to pay off the remodel without interest charges.
However, once the 0% APR period is over, any remaining balance you still owe will be subject to the card’s standard interest rate, which can be significantly higher.
Additionally, if your remodel exceeds the available credit limit, you might need another source of financing to cover the full cost.
Home improvement loans
Home improvement loans are designed specifically for renovation projects. Like personal loans, these are typically unsecured loans that offer fixed interest rates and terms.
Some lenders even offer home improvement loans with no prepayment penalties, allowing you to pay off the loan early without extra fees.
Home improvement loans can mean quick access to funds, but they tend to come with higher interest rates than secured loans, especially for borrowers with lower credit scores.
If you’re taking on a larger project, a home improvement loan might not cover the full cost, and you could end up borrowing from multiple sources.
Home equity line of credit (HELOC)
A HELOC is one of the most flexible and affordable ways to finance a bathroom remodel.
HELOCs allows you to borrow against your home equity, but unlike a lump-sum home equity loan, you have access to a revolving line of credit—something you can use as needed, similar to a credit card.
With a HELOC, you only pay interest on the amount you’ve borrowed, not the full line of credit. This can be especially beneficial with bathroom remodels because costs can fluctuate.
For example, if your original project estimate is $15,000 but unexpected expenses push the total to $18,000, a HELOC allows you to tap into the extra funds easily without needing to apply for a new loan.
Flexibility and affordability
HELOCs also offer competitive interest rates, often lower than personal loans or credit cards, making them an affordable option for homeowners with significant equity.
Additionally, many lenders offer interest-only payment options during the draw period, giving you greater flexibility in managing your finances during the remodel.
HELOC Pros:
- Only pay interest on what you borrow
- Flexible line of credit that adjusts to project needs
- Competitive interest rates
- Possible interest-only payments during the draw period
HELOC Cons:
- Variable interest rates could rise over time
- Your home serves as collateral
Why a HELOC can be the ideal choice for bathroom remodel financing
When comparing all the available options, a HELOC stands out as the ideal solution for most homeowners considering a bathroom remodel.
A HELOC offers a balance of flexibility, affordability, and convenience that other financing methods may not provide.
With a HELOC, you have the ability to borrow exactly what you need, when you need it, without being locked into a large lump-sum payment. This is especially valuable for remodels, where costs can change as the project progresses.
HELOCs also have lower interest rates than unsecured loans, and the option to make interest-only payments during the draw period gives homeowners more budget flexibility.
Secure your bathroom remodel financing with HomeEQ
Financing a bathroom remodel doesn’t have to be complicated.
While there are many options available, a HELOC provides the flexibility and affordability that make it ideal for homeowners looking to fund their renovation.
With a HELOC, you can confidently move forward with your bathroom remodel, knowing you have access to the funds you need—exactly when you need them.
HomeEQ’s fully digital application program can tell you if you are approved for a HELOC in minutes—faster than almost any other bathroom remodel financing option.
Check out our quick digital HELOC application right now, and let’s see if we can get you the funds you deserve to renovate that bathroom.