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How to Finance a Bathroom Remodel

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Whether you want to put in a soaker tub, remove dated wallpaper, or retile your floor, a personal loan can help you create the bathroom of your dreams. Below, we'll talk about the cost of remodeling a bathroom, how the best personal loans work, and other ways to fund your renovations.

How much a bathroom remodel costs

Dreaming of a rainfall shower? Or stone countertops? Big dreams come with big costs: The average bathroom remodeling project runs somewhere between $9,600-$11,000, according to Angie's List.

But that's the average. As with any average, you might spend less or more. You'll need to look at your bathroom and decide for yourself how much you'd like to spend. Not everyone can afford to pay cash for a bathroom remodel -- and that's okay.

Getting a bathroom remodel loan

One of the best financing options for a bathroom remodel is taking out a personal loan. You can use a personal loan to cover just about any costs, and pay it off over a few months or several years. You can customize monthly payments to fit your budget, too.

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Best loans for a bathroom renovation

If you're ready to get started on financing your bathroom renovation, head over to our list of expert-ranked best home renovation loans. If you're still not sure if a personal loan is for you, keep reading -- we'll go over the details of getting a personal loan for a bathroom remodel below.

How a personal loan for a bathroom remodel works

What is a personal loan? It's money you borrow from a lender and pay back with interest, normally in equal monthly payments. You can get a personal loan for just about anything -- there isn't a specific category for bathroom remodel loans. If you're financing a bathroom remodel with a personal loan, you'll just apply for a regular personal loan, then use the money to pay for your bathroom upgrades.

Pros and cons of personal loans

Some reasons you might want to get a personal loan for your bathroom remodel include:

  • You know exactly how long it'll take to pay off the loan.
  • Your loan payment is the same every month (except for a few rare exceptions).
  • You can get as much or as little as you need -- whether you're repainting or completely gutting your bathroom, there's probably a loan in the right amount for you.

But personal loans have some downsides, too. These include:

  • If your credit score is below 600, you might have trouble getting approved for a loan.
  • If you can't get approved for a good loan interest rate, your loan could be expensive.
  • If your income isn't stable, you may not be able to make the monthly payments consistently.

Only you can decide whether or not a personal loan is right for you. For more information on what a personal loan for a bathroom remodel might look like for you, use the calculator below to estimate different payments and loan terms.

Financing a bathroom remodel: Personal loan calculator
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Scoring a low-interest bathroom remodel loan

Financing any home improvement project -- from a master bathroom remodel to a basement or kitchen remodel -- is more affordable if you can get a low-interest personal loan. Here's how to get approved for a low-interest bathroom remodel loan:

Take steps to improve your credit score

People with excellent credit have access to the best interest rates and loan terms. If you need a personal loan for financing a bathroom remodel, but your credit score makes borrowing expensive, consider postponing the project for a few months. Use that time to build your credit score. Then, you can apply to the best personal loans with confidence.

Here are some quick ways to build credit:

Check your credit reports. Look over your credit reports for any errors and report them to the credit bureau in question. By law, you are eligible for one free credit report annually from each of the big three credit bureaus -- TransUnion, Equifax, and Experian.

For example, if you see TransUnion reported that you owe $20,000 on a car you sold years ago, that error could be dragging down your credit score. Dispute that error with TransUnion. Credit bureaus typically have 30 to 45 days to investigate your claim. Unless they can prove their report is accurate, they must remove the negative information.

Pay off debt. If you have existing debt, it could be weighing down your credit score. Pay down as much as possible before applying for a loan. This helps improve something called your debt-to-income ratio -- the amount of debt you have relative to your salary. Your lender is far more likely to extend a bathroom remodel loan if they are confident in your ability to manage your debt load.

Get pre-qualified with multiple lenders

If you accept the first loan you find, how do you know you scored the best interest rate?

Getting pre-qualified doesn't (usually) impact your credit score -- and it lets you compare personalized interest rates from different lenders. For more information on getting pre-qualified for a personal loan, check out our guide on how to get a personal loan.

How to apply for a bathroom remodel loan

Once you can apply with confidence, here's how to finance a bathroom remodel with a personal loan. Each lender will have slightly different requirements, but these are the basics:

  • Gather the documents you will need. For example, be prepared to provide the lender with your Social Security number, information about your employer, and verification of how much you earn. The lender may also ask you to provide a copy of your bank statement and last tax return. You will also need to provide proof of identity, such as a driver's license or passport.
  • Complete an application online, by phone, or in person. Before you apply, determine if the lender plans to conduct a hard or soft credit check. A hard credit check will ding your credit score, while a soft check won't. The top lenders all conduct a soft credit check before making a decision. Also, find out if the lender charges an origination fee, or if it has flexible financing options. The more you know ahead of time, the better.
  • Wait to hear back from the lender. If you work with an online lender, you will typically have an answer within minutes. If you're approved for a loan, the lender will show you your interest rate and all available repayment options.
  • Make a decision. If you decide to proceed with the loan, the lender will run a hard credit check to verify all information.
  • Sign on the dotted line. Once the final verification is complete, it's time to sign a loan agreement. Read the document carefully to make sure you understand what you're signing up for. If you have any questions, ask before signing.
  • Get funded. Depending on the lender, the cash should hit your account within one to three days.

A note on secured vs. unsecured loans

You have the option of applying for either a secured loan or an unsecured loan when you're ready to finance your bathroom remodel.

Secured loans require collateral. Collateral can be your bank account, vehicle, or other possession of value. If you miss loan payments, the lender has a legal right to take possession of what you offered for collateral.

Borrowers with poor credit have a better chance of getting approved for a secured personal loan. Secured personal loans also have lower interest rates.

Unsecured loans don't require collateral. If you miss payments on an unsecured loan, the lender can't take anything you own. The lender can sue you, though -- so you should still make an effort to make payments on-time.

Unsecured loans are harder to get and tend to have higher interest rates. Still, they're not as risky as secured loans.

Alternatives to a personal loan

As you investigate how to finance a bathroom remodel, don't forget to consider other options. If now is not the right time for you to take on a personal loan, here are a few other financing ideas.

Save up for it

Admittedly, saving up for a bathroom renovation sounds like zero fun. Still, there are a couple of advantages to putting a little money away each month until you have enough to cover your home improvement project.

  • Saving gives you time to consider what you want the new bathroom to look like.
  • Paying cash may help you stick to a budget.
  • Paying cash means not having to pay interest, which saves money.

Get a home equity loan or HELOC

A home equity loan and a home equity line of credit (HELOC) are two types of secured loans. That means they both use the equity in your home as collateral to secure a loan.

One difference between a home equity loan and a HELOC is the way the money is distributed. With a home equity loan, the funds are distributed in a lump sum that you pay back over a specific period of time. A HELOC doesn't require you to take a set amount of money at once. You are approved to borrow a certain amount but are free to draw from it as needed. And once you've repaid money borrowed from your HELOC, you can borrow it again until what's called the "draw period" ends.

Another key difference is that a home equity loan typically has a fixed interest rate, while a HELOC normally has a variable rate that changes based on what's happening with interest rates.

The inherent risk of both a home equity loan and HELOC is that your home is on the line if you default on payments. Because your home is used as collateral, the lender can take possession, sell the property, and recoup their losses.

Take advantage of a 0% promotional rate credit card

If your credit is strong, you'll likely qualify for a credit card with a 0% promotional APR offer. These offers typically let you pay the debt off in 12 to 18 months with no interest. Just make sure you pay the credit card off in full before the promotional rate expires to avoid getting hit with a high interest rate.

Taking out a personal loan to finance home improvements is an easy process. The challenge is making sure your credit score and budget are in good shape before filling out an application.

The Ascent's best personal loans

Looking for a personal loan but don’t know where to start? Our favorites offer quick approval and rock-bottom interest rates. Check out our list to find the best loan for you.

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