What's the difference between a HELOC and a home equity loan?

A HELOC is a revolving credit line — you draw funds as needed and only pay interest on what you use. A home equity loan gives you a lump sum upfront at a fixed rate. HELOCs suit phased projects; home equity loans suit single large projects with a known cost.

Can I get a home improvement loan with bad credit?

Yes, but your options narrow. FHA Title I loans are government-backed and more accessible. Some credit unions and online lenders work with scores as low as 580. Expect higher rates — improving your score before applying can save thousands.

Is a cash-out refinance a good idea right now?

It depends on your current mortgage rate. If your existing rate is already low (say, under 4%), a cash-out refi would replace it with today's higher rates — costing you more over the life of the loan. If your current rate is above today's market rate, it can make sense.

How much can I borrow against my home equity?

Most lenders allow you to borrow up to 80–85% of your home's value minus what you owe. For example, a $400,000 home with a $200,000 mortgage gives you roughly $120,000–$140,000 in borrowable equity.

Do I need to use the loan for a specific project?

For FHA Title I loans, yes — funds must be used for home improvements. For personal loans and HELOCs, lenders typically don't restrict use, though using them for non-home purposes may not be wise given the rates.

What's the fastest way to get financing for a home project?

BNPL and personal loans are the fastest — some personal loans fund the same day. If you need more than $50,000 quickly, a HELOC with a pre-approval in place is your best bet. Cash-out refinances are the slowest, typically taking 3–6 weeks.

Free resource

How to Choose the Right Home Improvement Loan

Eight financing options explained — so you can pick the one that fits your project, your equity, and your budget.

Not every home improvement loan is created equal. A $3,000 bathroom refresh calls for a very different product than a $120,000 whole-home renovation. The wrong choice can cost you thousands in unnecessary interest — or leave you short of funds mid-project.

This guide walks you through all eight loan types available to Australian and US homeowners, with honest pros and cons for each, so you can make a confident decision before you speak to a lender.

The 8 loan types explained

Click any card to see full details.

Which loan is right for you?

Answer three quick questions to narrow your options.

How much do you need to borrow?

Under $25,000

Personal loan, BNPL, interest-free, or FHA Title I

$25,000 – $100,000

Personal loan, HELOC, or home equity loan

Over $100,000

HELOC, home equity loan, or cash-out refinance

Do you have home equity?

Yes — 20% or more

HELOC, home equity loan, or cash-out refinance for best rates

Some — under 20%

Personal loan or FHA Title I

No or not sure

Personal loan, BNPL, or FHA Title I

How quickly do you need the funds?

Within a few days

Personal loan, BNPL, or interest-free financing

Within a few weeks

Home equity loan or HELOC

I can wait 4–6 weeks

Cash-out refinance for the lowest possible rate

Side-by-side comparison

Loan type	Rate range	Max amount	Equity needed?	Time to fund	Home at risk?	Best for
Personal Loan	6.99–29.99%	$100k	No	1–5 days	No	Speed & flexibility
HELOC	7.99–15.99%	$1M	Yes	2–6 weeks	Yes	Phased projects
Home Equity Loan	7.99–14.99%	$750k	Yes	2–4 weeks	Yes	Large fixed projects
Cash-Out Refi	6.75–9.99%	$3M	Yes	3–6 weeks	Yes	Whole-home renos
FHA Title I	6.99–11.00%	$25k	No	1–3 weeks	No	No-equity borrowers
BNPL	0–36%	$17.5k	No	Instant	No	Small purchases
Interest-Free	0% intro	$50k	No	1–5 days	No	Short-term payoff
Credit Union	6.49–18.99%	$100k	No	1–7 days	No	Best personal rate

5 things to check before you apply

Know your credit score

Your rate depends heavily on your credit. Check your score for free before applying — a score above 720 unlocks the best rates on personal loans and HELOCs.

Get a firm contractor quote first

Lenders want to know the project cost. A written quote also protects you from scope creep — borrow only what the job actually costs.

Compare at least three lenders

Rates vary significantly between lenders for the same product. A 2% rate difference on a $50,000 loan is over $5,000 in interest over five years.

Watch for origination fees

Some lenders charge 1–8% upfront. A low advertised rate with a high origination fee can cost more than a slightly higher rate with no fees.

Understand the repayment term

A longer term means lower monthly payments but more total interest. Match the loan term to how long you plan to stay in the home.

Common questions

Ready to compare lenders?

Browse vetted lenders across all eight loan types — filtered by state and loan type.

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