Customized financing to consolidate high-interest debt or fund major purchases or expenses.

Tailored commercial financing that supports all your business needs to help you grow quickly. 

Tailored for entrepreneurs that want to establish additional active and passive income streams.

Tailored for entrepreneurs that want to establish additional active and passive income streams.




Customized financing to consolidate high-interest debt or fund major purchases or expenses.

April 4, 2022

How Do Home Improvement Loans Work? | BHG Financial

How home improvement loans work

A home improvement loan¹ works by providing you with the money you need to complete an upgrade, repair, or other renovation on your home.

There are three main steps in the process of taking a home improvement loan.

  1. Determining how large of a loan you’ll need based on the projects you want to complete
  2. Finding out where to get the funding and submitting an application
  3. Paying the loan amount back

We’re going to dive into each of these steps to give you a better idea of what they entail.

How to determine the home improvement loan amount you need

To figure out your ideal loan amount, you can take these simple steps:

  1. Find a good contractor who specializes in the type of home improvement work you need
  2. Contact them to get a quote for labor and supplies
  3. See how much of your own money you can or would like to put towards the project
  4. Subtract the amount you have on hand from the total

The important thing to remember is to consider all costs. Let’s use a kitchen remodel as an example. You don’t just need to pay for countertops and cabinets. There is also the cost of:

  • Labor to install everything
  • Paint for the walls
  • A backsplash
  • New light fixtures
  • And more

For your home improvement loan to work for your needs, consider these costs before getting a quote.

Now that you have an idea of the loan amount needed to complete your project let’s look at where to get the funding.

Where to get your home improvement loan

Financing your project may be easier than you think. There are numerous ways for you to get funding for home improvements.

  • Getting a personal loan from lenders like us
  • Borrowing from a friend or family member
  • Using the equity from your mortgage
  • Using personal credit cards (These can be helpful for smaller projects that fit within your credit limit)

Each option has variables to consider—from interest rates, repayment periods, potential collateral requirements, and more. It is important for you to decide which is right for your situation.

The good news is that, at BHG Financial, our home improvement loans don’t require personal collateral, and they offer extended repayment terms2 and affordably low monthly payments.

Starting the loan application process is as simple as calling our team or estimating your monthly payment quickly using our online Payment Estimator.

Paying the loan amount back

The last step in the process of how a home improvement loan works is paying the loan back. When you apply for a loan, you receive a repayment term. Repayment terms vary by lender, so you may want to consider what length of time is best for your situation before securing financing.

For example, an extended repayment term, like those offered at BHG Financial, can make monthly payments low and easy to manage. Meanwhile, short-term loans may come with higher monthly payments that eat up a larger amount of your fixed budget.

Once you’ve finalized your repayment terms, you’ll need to make a payment each month to keep up with your loan and eventually pay it off. Missing payments or making payments late could adversely impact your credit score, among other consequences.

That is how a home improvement loan works. If you’re in the market for financing or just want to talk to a specialist to find out what our financial solutions could do for you, contact our team today at 866-588-7910. You can also get a quick glimpse at how low your monthly payment could be by using our online Payment Estimator.


Personal loans not currently available in Illinois or Maryland.

1 Consumer loans funded by one or more participating lenders. Equal Housing Lenders.  EHL

2 Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile. Finance amount may vary depending on the applicant's state of residence. 

For California Residents: BHG Financial loans made or arranged pursuant to a California Financing Law license - Number 603G493.