A bathroom remodel can dramatically change the living experience of a home as well as its value. The National Association of REALTORS® (NAR) Remodeling Impact Report estimates that homeowners recover about 71% of the value from a bathroom renovation project. With an average price of $35,000, bathroom remodels may be prohibitively expensive without the use of financing.*
The good news for homeowners is that there are several financing options, including personal loans, that can provide the money necessary to seize the opportunity for a bathroom remodel while offering clear payment terms and favorable interest rates for repayment.
Key Considerations
- A bathroom remodel can significantly enhance home value, with homeowners typically recouping 71% of renovation costs, with an average price point of 35,000.
- Financing choices like personal loans, home equity loans, and HELOCs offer flexibility in funding bathroom renovations, each with distinct benefits and drawbacks.
- BHG Financial provides specialized personal loans up to $200,0001, offering competitive rates and terms for comprehensive bathroom remodel projects.
Examining a Bathroom Renovation
The scope of a bathroom remodel can range from refreshing fixtures and rolling on a fresh coat of paint to completely gutting the room down to the studs and rebuilding. As you determine the scope and scale of your home improvement project, consider some of these popular reasons to remodel a bathroom.
- Make the home more beautiful by upgrading worn out surfaces and finishes: If you’ve purchased an older home, it might be time to remove old tile work and fixtures and replace them with some more modern options.
- Increase the home value: 26% of REALTORS® recommend a bathroom renovation before selling, and they estimate that a bathroom renovation will recoup 71% of the value from the project.* That means a $10,000 bathroom renovation may add $7,100 to the value of your home, making the $10,000 investment worth $17,100 when you go to sell.
- Add features and enhance the livability of the home: Sometimes, it’s time to upgrade and move from a small shower stall to a luxurious tiled shower with rain heads. Changes like this will require a more extensive overhaul but may make day-to-day living more pleasant.
- Make the bathroom accessible for everyone living in the house: If you live with an aging family member or someone who requires wheelchair access, you may renovate a bathroom with accessibility in mind. To accommodate family members, a bathroom remodel could implement changes like grab bars, a wider doorway, and a walk-in shower.
Ways to Finance a Bathroom Remodel
When reviewing financing options for your upcoming bathroom remodel, there are several options to consider.
Personal loan
A personal loan is an unsecured loan that you can use for various purposes, including remodeling a bathroom. Personal loans generally have lower interest rates than credit cards or other high-interest loans, plus you’ll receive a lump sum you can use to fund the entire renovation up front. Then, you’ll benefit from a set repayment schedule with predictable monthly payments.
BHG Financial offers personal loans up to $200,0001 to qualified borrowers, meaning you may be able to finance one or all of your home renovation projects with a single loan.
Home equity loan
A home equity loan, also called a second mortgage, uses the equity in your home to fund the loan for a bathroom remodel. If your home is worth $400,000 and your current mortgage balance is $200,000, you could be eligible to borrow up to $190,000 toward a home equity loan, depending on your lender. Some lenders cap the loan-to-value (LTV) ratio at around 80%, but you may be able to get up to 95% of your home’s equity with some lenders.
Like a personal loan, a home equity loan is a lump sum you’ll pay back over predictable monthly installments and you”ll benefit from a fixed interest rate. Since a home equity loan is secured using your home as collateral, you’ll want to ensure you can make the payments alongside your existing mortgage before you commit. Failure to pay what you owe in a timely manner could result in an eventual foreclosure.
Home equity line of credit
A home equity line of credit (HELOC) is a revolving debt that you can take out against your home’s equity. Unlike a home equity loan, your line of credit will be open for you to spend up to a predetermined credit limit. If you plan to do your bathroom renovation over a period of months, you may want to spend money as you need to instead of all at once in one lump sum. Then, you can repay the balance due as interest-only payments during the HELOC’s draw period or interest and principal payments during the repayment period.
A HELOC is also secured by your home as collateral, so you’ll need to have a plan for timely repayment in order to avoid the risk of foreclosure.
Credit card
If you already have access to a credit card and have a few thousand dollars before you hit your credit limit, you may be tempted to use the card to fund your bathroom remodel. But unless your credit card is in a 0% APR introductory period, doing so could mean significant interest payments if you can't pay off the balance quickly. Plus, you may risk a hit to your credit score since credit utilization over 30% is considered high and can have negative effects on your score. If you have a good credit score, you may want to turn to a lower-interest personal loan before you pull out your credit card to cover the renovation.
How BHG Financial Can Help You with a Bathroom Remodel
BHG Financial offers highly specialized consumer financing up to $200,0001 for personal loans, providing a reliable solution for your home improvement objectives. With repayment terms of up to 10 years1,2 our affordable, unsecured loans can be used to reconfigure your bathroom completely. Get started by viewing your personalized estimate using our payment estimator.
At BHG, we cater to busy, high-income professionals by providing a simplified lending process with minimal paperwork and no personal collateral required. If you’re looking to make quick improvements to increase the value and desirability of your home, we make it easy to get the funds you need.
Bathroom Remodel Financing FAQs
Can you pay monthly for a new bathroom?
If you use a personal loan, you can pay for your bathroom remodel with predictable monthly payments. With loan terms of up to ten years with some lenders, you could reduce the cost of your monthly payment so that you're able to afford the remodel of your dreams.
