Bathroom renovation can be a complicated process — for example, the complex plumbing and installations. And yet, a bathroom remodel is a popular home improvement project among homeowners — whether for design upgrade or maintenance, or both. However, changing your bathroom’s look and functionality comes at a cost. And, that’s why you need the best bathroom remodel financing to cover all the costs and fees. 

According to the National Association of Home Builders Remodeling Marketing Index, bathroom renovations are one of the most common home improvement projects.

Before you begin working on your bathroom remodel, keep in mind that you’ll have to pull a permit — whether you undertake the work yourself or hire a professional. Pulling a permit would ensure that everything done in the bathroom meets the building code and passes inspection once the work is complete. 

Make sure that the bathroom professionals you hire, including bathroom designers and builders, are familiar with the current building and plumbing codes. 

How much does the average small bathroom remodel cost? 

The average cost of remodeling a bathroom runs between $6,000 to $25,000 — with most homeowners spending around $10,000. The total remodeling cost depends on the scope of work, the size of the bathroom, the labor cost, material cost, the number of bathroom fixtures, the scale of the bathroom remodel and your zip code. 

The lowest price for a minor bathroom remodeling, with basic repair and paint job, has been found around $2,000 while extensive projects fall on the higher end of the scale.

The national average to remodel a small bathroom is $6,500, but ranges anywhere between $1,500 and $15,000, or more. That translates to $70 per square foot for low-end bathroom fixtures with DIY labor, and $250 per square foot for high-end bathroom fixtures that’s been installed by a licensed contractor.

Planning a renovation for your bathroom? Try our free bathroom remodel cost estimator; it’s easy and quick!

Oftentimes, that dream bathroom of yours costs you more than anticipated. And, that’s why it’s important to carefully look at your bathroom remodel financing options before committing to anything large-scale.

Read more: Why should I estimate my bathroom remodel?

Bathroom remodel cost breakdown

Take a look at the average costs for some of the most common bathroom fixtures and fitment:

Can you remodel a bathroom for $5000?

You can get your bathroom remodel down to around $5,000 if you absolutely plan your project well. The most powerful tool in saving costs is understanding the remodeling process and choosing the most cost-effective ways.

Here are some inexpensive bathroom remodeling ideas that can save you good money.   

  • Limit the usage of tiles in your bathroom.
  • Save money by choosing inexpensive bathroom countertops.
  • Paint the bathroom yourself instead of hiring a professional painter.
  • Update your bathroom with cost-effective light fixtures, sink faucets, towel racks, and drawer pulls.
  • Clean the grout and caulking around the tub and sink.
  • Refinish your bathroom fixtures yourself.
  • Opt for repurposed, quality fixtures (even toilets and showers) instead of buying new ones. 

Read more: Plumbing financing for good & bad credit

Does remodeling my bathroom improve the value of my home?

A bathroom is one of the most essential parts of any home. According to the National Association of the Remodeling Industry, updating or adding a new bathroom is one of the best ways to add value to your home. Moreover, such a home improvement project improves the salability of your home or makes it more practical for you and your family members. 

Want to know which home improvements give you maximum return on investment? Kukun’s How to Prepare Your House for Sale tool will give you the best answers!

Pros and cons of a bathroom remodel

Remodeling a bathroom can impact both its functionality and the resale value of your home. An updated bathroom will not only look great, function well to suit your lifestyle, but also become your favorite retreat at the end of a long day. 

Having said that, undertaking a bathroom remodel is a serious job. Before beginning working on one, it’s a good idea to evaluate the pros and cons of a bathroom renovation.

Pros Cons
Homeowners can recoup up to 50% of the cost put into the projectBathroom remodeling is an expensive undertaking, of course depending on the scope of the remodeling  
Adds to your bathroom’s functionality and appealRemodeling a bath can take as long as six weeks to complete

What is the best way to finance a bathroom remodel?

If you’re wondering how to pay for your bathroom remodel, you are not alone. While a financial advisor will recommend paying for your bathroom remodeling project with cash, as it saves hundreds in financing costs, it’s a very impractical solution. Who keeps $10,000 to 20,000 lying around? 

The good news is that there are a few good ways to finance the bathroom of your dreams. Some of the best loans for bathroom remodels include home improvement loans, home equity loans, credit cards, and more.

Read more: Easy hot tub financing options for good & bad credit

What are the different bathroom remodel financing options? 

If and when you decide to finance your bathroom upgrade, you have many options — a home equity loan, home equity line of credit, a personal home improvement loan, or through a credit card. Let’s explore some of these popular bathroom remodel loans in more detail.

Home equity lines of credit (HELOCs)

A home equity line of credit aka HELOC gives you access to a line of credit that’s ensured by your home equity. Your home equity is calculated as the difference between your home’s market value and your remaining mortgage amount.

You can use the funds during your draw period (usually 10 years). And then, repay the loan at a variable interest rate during the repayment period of time. Such a loan comes with low-interest rates but utilizes the equity in your home. 

Home equity loans 

In the case of home equity loans, you get a fixed amount of money that you repay in fixed monthly installments. Such a loan is best when you know how much money you’ll need for your bathroom remodel. Like in the case of a HELOC, here too, you use your home as collateral to secure the loan. The only downside is that if you fail to repay the secured loan or the scheduled monthly payments, you may stand to lose your house.

Cash-out refinance

Refinancing a mortgage is a good idea when you take out a new mortgage whose rates are lower than the original mortgage rates. That way, you can use the extra cash for your upgrades — especially if they are large-scale, expensive projects. Such a financing option balances the effort and cost of an appraisal, closing costs, and other mortgage loan fees.

Personal loans

An unsecured personal loan is another popular bathroom remodel loan. This type of loan is a good option when you require funds quickly. Most personal loan lenders can get you the lump sum loan amount in as few as one to three days. 

If you want the required funds but do not want to put up any collateral, a home improvement loan (a kind of personal loan) is your best option. It helps you finance smaller-scale home renovations, remodel, or repair works. 

Credit cards

If you decide to use a credit card to finance your bathroom project, do keep a few things in mind. Credit cards are an expensive way to remodel your bathroom. The average APR is usually around 16% and the interest tends to accumulate quickly. 

Consider using credit cards only if you’re able to secure low-interest rates and low costs. Or, if you take advantage of an introductory 0% financing offer and are confident enough to pay down the debt during the promotional period. 

Company financing

Today, many of the home improvement stores and companies offer loans that can be used for home improvement projects — with some stores even offering 0% introductory financing for eligible customers. Especially those with an excellent credit score.

However, there could be a catch if you’re not careful enough. Maybe hidden costs and fees. Do thoroughly read the terms and conditions and evaluate the interest rates before zeroing in on a loan. 

How do you apply for financing for a bathroom?

The process of applying for financing for a bathroom remodel depends on the financing option you choose. 

For example, if you choose to finance your bathroom remodel by taking a personal loan, here’s the process:

  1. Gather the documents that most lenders will want to see, such as your social security number, proof of employment, proof of income, and maybe even copies of your tax returns as well as a copy of your bank statement. You will also need to furnish proof of identity, such as a driver’s license.
  2. You will need to fill out an application, either online or on the phone. The lender will then run a soft or hard credit check on you. Now is also a good time to find out if the lender charges origination fees.
  3. Ideally, in a few minutes, the lender will let you know if you qualified and what your interest rates, as well as terms of repayment, are.
  4. Make a decision if the loan being offered works for you or not.
  5. If the loan fits your needs and you’re sure you can pay it back, sign on the dotted line. However, make sure you read and understand all the terms and conditions.
  6. You ought to get the money in your debit account in between one to three days.

The process is different if you’re applying for a HELOC, or home equity line of credit.

  1. Begin by checking your credit score and making sure it is healthy enough for you to qualify.
  2. Keep all the necessary documents ready, including your social security number, income and employment details, home details such as mortgage details, repayment history, taxes, and insurance, as well as details about your debts and outgoing payments.
  3. Fill out the application. A loan officer from the bank ought to get in touch with you.
  4. The loan officer will verify your income, income tax returns, etc. This will also include income other than your salary, such as rental income if any.
  5. If your loan is approved, you will hear from a loan underwriter in around three business days regarding the initial decision and the terms and conditions. All your debts will be reviewed and your debt-to-income ratio will be calculated. 
  6. Your lender will next see how much equity you have in your home and may get your home appraised.
  7. Your lender will contact you and let you know if your loan has been approved, what the final terms and conditions are, and choose a closing date with you.
  8. Your line of credit will be available to you four days after closing.

When should I use a home improvement credit card for bathroom remodels?

Here are some scenarios when using a home improvement credit card is a good option to finance your bathroom remodel.

  1. Some credit card companies offer new customers 0% intro APRs for as long as 18 months. If you can pay for your renovation in that time frame, using your credit card makes sense.
  2. A lot of top-tier cards offer customers travel points, cashback of around 1%-2%, and other rewards. Others offer new customers travel bonuses or up to $750 cash for spending a certain amount in a specific time period, like the first 60 days after receiving the card. In these cases, paying for your bathroom remodeling with your credit card may actually pay for your next vacation.
  3. Credit cards are a great way to pay for remodeling if the scope of work is minor, such as replacing a sink, installing new lighting, a new toilet, or even a new cabinet. 
  4. All credit cards have an interest-free period of at least 30 days. If you can pay back for your renovation within then, go ahead and use your credit card.

Do companies offer bathroom remodel payment plans?

Yes, bathroom remodeling companies do offer payment plans to customers. Some of them have attractive offers as well, such as a 12 monthly interest-free repayment period, with the repayment plan extending to as many as 60 months.

Of course, these are unsecured loans, so the interest rates charged will be higher than those payable on secured loans.

How do you qualify for bathroom renovation financing?

With the right loan option, your dream bathroom can be designed easily — without putting a financial burden on you. The endeavor is to borrow the required funds at the lowest possible interest rates. Fortunately, there are a number of different types of bathroom remodel loans available to help you make your project a reality. 

The most important criteria that qualify you for any good bathroom remodel financing is your credit score. The better your score, the easier it is to get loan approval. Lenders also look at the equity you have in your home, your employment history, the loan amount you need to borrow, and the maximum monthly payments you can afford to make.

Having said that, there are ways to get a loan even with bad credit. Go through How to get a home equity loan with bad credit to know more. 

You can use the loan to cover just about any renovation costs and pay off the money over a few months or several years. The best part is, you can customize your monthly payments to fit your budget.

What credit score is needed for bathroom financing?

The minimum credit score requirement depends on the type of loan it is. For example, you’ll need a credit score of a minimum of 500 to qualify for an FHA 203(k) loan, though some loan lenders may have a higher minimum. 

The down payment too is dependent on your credit. If your credit score is 580 or higher for a 203(k) loan, the down payment is 3.5%. If it’s between 500 and 579, you’ll have to put down 10%. 

The minimum credit score requirement for a personal loan is usually considered to be between 720 and 750. Having a better score means that you are creditworthy, in which case, most lenders will approve your personal loan application quickly. Moreover, they may offer you your chosen loan amount at a lower interest rate. 

Read more: Why is credit important when you buy a home: Top reasons

Can you get bathroom remodel financing with no payments for two years?

The good news is that a bathroom remodel loan with no down payment is possible — provided you choose a financing option that doesn’t require it. For example, there are a few government-backed loans and down payment assistance programs that allow you to take a loan with no down payment. 

But, keep in mind that the more the down payment, the more confidence your loan lender will have in approving your loan application. 

The lender would look at your finances, assets, and credit score to determine the level of risk in approving your loan. A good down payment gives them a surety that you’ll be able to pay them back.

When should I use a home improvement credit card for bathroom remodels?

Due to the rising home prices across the United States, more and more homeowners are choosing to renovate their existing homes. But of course, remodeling can be costly. 

That’s when homeowners turn to home improvement loans or sometimes utilize their credit card. 

Although not a loan in the traditional sense of the word, a credit card can be used to finance a bathroom remodel. It can be a good idea specifically for low-budget remodels. For a larger home improvement project, we don’t recommend using plastic unless you know for sure you can pay the money back on time. 

Keep in mind that if you’re unable to pay the credit card bill on time, it would mean a very high interest. If you must use a credit card, do so only for certain parts of the remodel and not the entire remodeling project.

Steps to improve your credit score

Borrowers with excellent credit score have access to the best interest rates and loan terms. If you’re thinking of getting a personal loan for financing your bathroom remodel, but your credit score is less than desirable, it’s best to postpone the project for a few months. Otherwise, the funding will be a lot more expensive than you’ve anticipated.

You can utilize that time to improve your credit score. And then, apply for the best loans with confidence.

Here are some quick ways to build a credit score:

  1. Check your credit reports through your credit bureau, all the while looking for any errors. By law, you are eligible for a free credit report once a year. If you see any error, you must immediately report it to the credit bureau or else it will drag down your credit score. 
  2. Pay off your existing debt — as much as possible — before applying for a loan. A debt on your credit report could weigh down your credit score. Paying off your debt helps improve your debt-to-income ratio (DTI). A good DTI will make the lender confident in your ability to manage your debt load. They are then far more likely to extend your bathroom remodel loan. 

Read more: Home remodel financing options: Best way to finance a home remodel

Last words

Whether you’re renovating to get the perfect bathroom or have to remodel due to a sudden plumbing problem (like a leaky pipe) or have to quickly sell your home due to a hasty relocation — a bathroom upgrade needs good money. And, that’s when bathroom remodel financing comes in handy. 

Before you zero in on the loan option that suits your requirements, always consider its immediate as well as long-term financial impact. Do take into account the loan interest rates, loan terms, and interest paid over the course of the remodeling loan. Once you do that, you can be tension-free!

Read more: Your questions on home insurance after remodel, answered!

Bathroom Remodel & Renovation Financing Options was last modified: June 15th, 2021 by Ramona Sinha