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A costly roof repair is a home improvement project most homeowners dread having to pay for. If your home requires a roof replacement, you may be wondering what financing options are available to help you with your project. Here, we'll discuss ways to pay for a new roof and what you should consider before financing through a lender.
Can you finance a new roof?
Yes, you can finance a new roof. In fact, there are several ways to borrow funds.
The most important thing to do before determining how you want to finance your roofing project is to shop around for the best loan. The research on personal loans show interest rates have continued to decline over time, yet a seemingly small difference in rates can still save you hundreds of dollars (or, in some cases, thousands of dollars).
For example, look at the difference in interest paid between these two loans:
| Lender | Loan amount | Interest rate | Monthly payment | Total interest paid |
|---|---|---|---|---|
| Lender A | $17,000 | 4.99% | $274 | $2,707 |
| Lender B | $17,000 | 6.99% | $290 | $3,862 |
TIP
Finding a roof loan
Of all the home improvement projects out there, roof replacement is among the hardest to get excited about. Still, when you need a new roof, you don't have many options. If you're not sure where to start, check out our best loans for home renovations page for a touch of inspiration.
If you have bad credit...
A damaged roof waits for no one. If your roof project is critical but you don't have the credit score for a loan from the lender of your choice, you do have options. Here are a few to consider.
- A personal loan designed for borrowers with bad credit: There are some credible, professional lenders that offer bad or fair credit loans. Check out several lenders to learn which offers the lowest interest rate and most attractive repayment term.
- A loan from your local bank or credit union: Even if your credit is far from perfect, your bank has access to your accounts and knows things like how often you make deposits and if you manage your bank account well. Your financial institution may be more forgiving than a lender you have no prior relationship with.
- A secured loan: If you're having trouble qualifying for a regular loan, you can ask your preferred lender about getting a loan with collateral. When you use collateral to get a loan, the loan is called a "secured loan." Collateral can be anything of value that can be sold, like a home, vehicle, or even a savings account. It's important to remember, however, that if you miss loan payments, the lender can take your collateral as payment.
For more help, check out our guide: Best personal loans for bad credit
Best ways to finance a new roof
Here are some of your options for financing a new roof.
Personal loan
One of the best things about taking out a personal loan is that it can be used for just about anything. Plus, interest rates for personal loans are lower than rates for credit cards (as low as 8% for borrowers with good credit). How much you can get with a personal loan varies by lender, but generally ranges from $1,000 to $50,000.
Once your roofing contractor lets you know how much the roof installation is going to cost, it's time to browse personal loan lenders. Personal loans are available from banks, credit unions, and online lenders.
Find a few lenders you would like to compare. Then, fill out a loan application with each. Each lender will let you know if you qualify for a loan once they've reviewed your credit history (this won't affect your credit score). At this point, lenders will tell you:
- What your interest rate will be
- How much your monthly payment will be
- If they add in charges like an origination fee
Using this information, you can decide which one is best for your roof replacement project. Make sure you compare the total cost of the loan (the APR) with each lender, rather than just looking at the interest rate.
Compare the best personal loans
Get the best rates and terms to fit your needs. Here are a few loans we'd like to highlight, including our award winners.
| Lender | APR Range | Loan Amount | Min. Credit Score | Next Steps |
|---|---|---|---|---|
Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
Fixed: 8.99%-29.99% APR (with all discounts)
|
$5,000 - $100,000
|
680
|
|
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
5.20% - 35.99%
|
$1,000 - $50,000
|
None
|
|
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
10.49% to 19.49%
|
$2,000 - $30,000
|
720
|
If you have a strong credit score, you'll have your choice of lenders, so be picky about which lender you work with.
Use the calculator below to experiment with different loan amounts, loan terms, and monthly payments to find what works for you.
Financing a new roof: Personal loan calculator
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Roofing company financing
Contractors know that many customers don't have cash available to pay for a major roof repair. That's why some roofing services offer loans -- either directly or through a lending partner. While accepting a roofing loan on the spot may seem convenient, it pays to check your other options to make sure you're getting the best interest rate, loan term, and monthly payment possible. It's possible that a roofing loan will provide all the best loan features available, but you won't know if you don't shop around.
Home equity loan
Another roof financing option is to take out a home equity loan. A home equity loan is a type of secured loan, meaning your house acts as collateral. Secured loans typically carry low interest rates.
Like most standard loans, once the loan has been approved and loan documents have been signed, all the funds are disbursed to you. You repay the loan in regular monthly installments.
Home equity line of credit (HELOC)
As the name implies, a HELOC is a line of credit. A line of credit is similar to a credit card: The lender gives you a specific spending limit, and you can borrow as much or as little as you need up to that limit. In fact, you can take a lump sum, pay it back, and borrow it again for a set number of years (generally 10).
Like a home equity loan, a HELOC uses your home as collateral. HELOCs also carry low interest rates, and when you're taking on a home improvement project as large as a roof replacement, it makes sense to pay as little interest as possible.
Credit card with a 0% promotional rate
If you have an excellent credit score, there's a chance you qualify for a new 0% intro APR credit card. These cards typically give the cardholder 12 to 18 months of interest-free borrowing power.
For example, if the promotional rate on your card lasts for 18 months and your damaged roof costs $17,000 to replace, 18 equal payments of $945 would pay for the roof replacement in full -- without having to pay any interest.
Things to consider when financing a roof
Borrowing money to install a new roof is nothing like borrowing money to pay for a kitchen remodel or destination wedding -- you can't postpone the project until you have time to come up with the cash on your own. Instead, you have to make the best decision possible with the limited time you have. Here are some things to consider before making your roof financing decision:
- Have I obtained bids from more than one licensed roofer so that I know I'm getting the best deal?
- Am I confident enough in my ability to make the monthly payment to risk my home or other valuable asset by taking out a secured loan?
- Do I have cash in my emergency fund to pay for part of the roofing project so I can finance less?
A new roof may not be as exciting as a dazzling new kitchen countertop or a luxurious hot tub, but it's hard to overrate the feeling of having a roof over your head. If your roof has seen better days, consider these options when it comes time for a replacement.
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.
Our Loans Expert
Dana George has a BA in Management and Organization Development from Spring Arbor University. For more than 25 years, she has written and reported on business and finance, and she's still passionate about her work. Dana and her husband recently moved to Champaign, Illinois, home of the Fighting Illini. And though she finds the color orange unflattering on most people, she thinks they'll enjoy Champaign tremendously.
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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Please note that this calculator is not personalized financial advice and should not be considered or used as such. Nor are we promising that by use of this calculator, will you be able to save more money, preserve wealth, or otherwise.
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Dana George has positions in Target. The Motley Fool has positions in and recommends Target and Upstart. The Motley Fool has a disclosure policy.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Please note that this calculator is not personalized financial advice and should not be considered or used as such. Nor are we promising that by use of this calculator, will you be able to save more money, preserve wealth, or otherwise.
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Dana George has positions in Target. The Motley Fool has positions in and recommends Target and Upstart. The Motley Fool has a disclosure policy.
Citi Personal Loan disclaimer:
**Rates as of 10-06-2023 . Your APR may be as low as 10.49% or as high as 19.49% for the term of your loan. The lowest rate quoted assumes excellent credit, and a loan term of 36 months or shorter. Otherwise, a higher rate will apply. For example, if you borrow $10,000 for 36 months at 15.99% APR, to repay your loan you will have to make 36 monthly payments of approximately $351.52.
There is a 0.5% APR discount if you enroll in automatic payments at loan origination. Additionally, existing Citigold and Citi Priority customers will receive a 0.25% discount to the interest rate. If you are in default, your APR may increase by 2.00%. No down payment is required. Rates subject to change without notice.
You must be at least 18 years of age (21 years of age in Puerto Rico). Co-applicants are not permitted. Loan proceeds cannot be used for post-secondary educational or business purposes.
If you apply online, you must agree to receive the loan note and all other account disclosures provided at loan origination in an electronic format and provide your signature electronically.
Credit cards issued by Citibank, N.A. or its affiliates, as well as Checking Plus and Ready Credit accounts, are not eligible for debt consolidation, and Citibank will not issue payoff checks for these accounts. If you are unsure of the issuer on the account, please visit https://www.citi.com/affiliatesproducts for a list of Citi products and affiliates.
*Upstart Loan Disclaimer
The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.
*SoFi Personal Loan Disclaimer
Fixed rates from 8.99% APR to 29.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors.
Loan amounts range from $5,000–$100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive.
Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.
Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.
Impact to credit score: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.