How to pay for home improvements

Personal loans allow you to borrow a fixed amount of money with a fixed interest rate. These loans are unsecured, meaning you don’t have to put your home or other property up as collateral. 

Home equity loans are similar to personal loans in that you receive a lump sum of cash with a fixed interest rate and fixed monthly payment. Home equity lines of credit, also known as HELOCs, work like credit cards, and come with variable rates and a line of credit. These borrowing options require you to put your home up as collateral.  

If you need to borrow a small amount of cash, you might be able to skip the loan and go with a 0% APR credit card instead. Just remember: If you don’t pay your balance off by the time your zero-percent APR offer ends, your card’s interest rate will reset to a much higher variable rate.

If you have built equity in your home and you’re looking to do a major renovation, a cash-out refinance could provide you with the funds you need while getting you a lower rate on your current mortgage. If you go this route, shop around for the best refinance rates.