Many people like to remodel their bathrooms frequently and change how their homes look and feel. Sometimes, remodeling is not an option. This is usually the case when repeated use damages the fixtures, fittings, and flooring or the water leaves stains everywhere. Whatever the reason, remodeling a bathroom is not cheap at all. However, people who are on a tight budget can choose several loan options to finance the project.

How much does it cost to remodel a bathroom?
Most bathroom remodeling projects include several activities, from fitting new fixtures to changing the entire floor plan. Depending on what a homeowner wants, the overall cost can change. The size of the room will also be a crucial factor affecting the price.

Generally, the project can cost anywhere between $2,500 and $80,000. On average, homeowners have been known to spend around $10,000 on remodeling their bathrooms. This can be a big expense, especially when someone does not have money readily available. In such situations, people can apply for a loan or another type of credit to pay for the expenses involved in completing the work.

Top loan options to finance a bathroom remodel
Here are seven ways one can finance the bathroom remodeling project:

Home equity lines of credit or HELOC
Homeowners who have home equity can tap it to finance the bathroom remodeling work. However, the final decision usually depends on whether enough equity is available and how much one wants to borrow. If an individual has not lived in their home long enough to build equity, the HELOC may not be sufficient to finance the remodeling project. This is especially the case when the bathroom needs big changes. However, if the expenses are not too high, home equity is a good loan option to explore. If one has lived in their home for many years and has accumulated substantial equity, they can even finance a large-scale remodeling project with HELOC.

Cash-out refinance
Cash-out refinance is another famous option homeowners usually turn to for home improvement projects like bathroom remodeling. It is like HELOC, where one has to build up sufficient equity if they need to borrow a large amount. However, people who choose this loan option must refinance into a new interest rate on their primary mortgage. The problem here is that if one has scored low interest on their mortgage, the cash-out refinance may be a bad choice. But, if the interest rate does not change much with the refinancing, this loan option can be helpful.

Personal loans
People can seek personal loans if they have not built enough equity in their homes to get a home equity loan or refinancing. These loans can be secured or unsecured, meaning one may or may not have to offer collateral when applying. Secured personal loans require one to offer assets like their car as collateral, which ensures the loan terms are favorable. In case no collateral is provided or the loan is unsecured, chances are the interest rate will be higher. In either case, personal loans can help finance a bathroom remodeling project that is not expected to cost a lot. So, one does not need to take a big loan with high interest, and they can pay it back in time without incurring penalties.

Construction loans
For larger bathroom remodeling projects, construction loans are often quite useful. These are similar to the other loan options where the loan is secured against the home. Yet, construction loans are considered specialty financing options because, unlike other home equity-based loans, they allow a homeowner to get a larger loan with low interest rates. The low rates continue until the construction of remodeling work is completed. Once the project is finished, the loan is rolled into a regular financing option with a slightly higher interest rate.

Financing through credit cards or credit companies
If one is comfortable with an unsecured loan option, credit cards and credit companies are worth looking into for the extra funds required for the remodeling work. Most credit companies offer bigger loans for such purposes. However, the interest rate is slightly higher, mostly because the loan is unsecured and no collateral is required. Yet, this type of loan can be useful if one needs more money quickly or needs a smaller loan that can be repaid pretty soon.

Contractor-offered financing
Many homeowners often consider contractor financing favorable because the remodeling contractor directly offers the loan. So, there are no third-party lenders involved. Besides, most contractors often provide instant approvals for financing the project. However, people must legally document all the terms and conditions before agreeing to the loan and read the fine print carefully before signing on the dotted line to accept the offer.

Energy efficient mortgages or EEMs
Homeowners who want to remodel their bathroom to make it more energy efficient can seek energy efficient mortgages or EEMs. These loans are based on what the value of a house will be after it has been made more energy efficient. Although the loan amount is not quite high, the money can be helpful to finance some part of the remodeling work.