
Of all home improvement projects, kitchen remodels are often the most rewarding and the most satisfying. Maybe it’s because kitchens are the most used rooms in our homes, or because they’re also the most visible, but building a dream kitchen is the most common home improvement project.
Though kitchen remodeling is a popular choice, it can also be an expensive one. Replacing the cabinets, countertops and fixtures is just the start. There are also appliances, flooring, and finishes to consider. On average, a kitchen remodel project can cost anywhere from $12,500 to $35,000 and up, depending on size, scope and materials. That’s why most homeowners depend on home improvement funds to make their projects possible.
Options for Financing Kitchen Remodel
Home remodeling projects involve plenty of planning. Part of the planning process involves anticipating costs–both expected and unexpected. The good news is that many financing options are available to help you get your project done. Good credit and a strong credit history will help you balance the pros and cons of each type of home improvement financing. Read on to find a loan option that works well with your finances.
Credit Cards
The easiest way to get funding for smaller kitchen projects (or those that require a lower loan amount), is to leverage existing credit cards. They’re more straightforward because there is no approval process, required collateral or application fees, which means you can start your project right away.
The downside of using credit cards to finance a kitchen remodel is that they often come with higher interest rates than other types of financing. It’s also possible that you may not have a large enough credit limit, which could require additional financing on top of the credit debt.
Credit cards are useful for emergency repairs and low cost projects, but may not make sense for larger projects where interest will add up over time.
FHA 203(K) Rehab Loan
When purchasing a new or new-to-you home that comes with some necessary repairs, including a kitchen remodel, a FHA 203(k) rehab loan may be the best option. Specially made for fixer uppers, this renovation loan bundles both the home’s purchase price with the remodeling costs in one loan. The result: just one simple payment.
Much like any type of mortgage, the loan terms and rates and terms depend on market conditions and selected lenders.
FHA 203(K) rehab loans are limited to homebuyers who are purchasing a property. Existing homeowners who want to start new home remodel projects may want to look at other loan options.
Unsecured Personal Loan
Personal loans are some of the most efficient and effective ways to finance a kitchen remodel. Personal loans are unsecured loans – that means they are not backed by collateral, including your home’s equity. Instead, these fixed rate loans deliver a lump sum in a range of amounts, with flexible terms and a manageable monthly payment.
The process for obtaining a personal loan is usually quicker than other types of financing, considering your creditworthiness and needs. Time to receive your funds is also shorter, making personal loans perfect for home improvement projects of any size and scope.
Home Equity Loan (HEL)
A home equity loan (HEL), also known as a second mortgage, is a loan based on your home’s existing equity. With a HEL you’ll borrow up to 80 percent of the equity in your home in a loan similar to your existing mortgage.
Unlike a cash out refinance or equity line of credit, a HEL is a loan that runs in tandem with your current mortgage, but has terms, interest rates and monthly payments of its own. The advantage is a long repayment window and fixed rates. However, a HEL comes with closing costs and origination fees. It’s important to consider whether the additional costs are worth it in the long run.
Home Equity Line of Credit (HELOC)
One of the most popular choices for home improvement project financing is a home equity line of credit (HELOC). Much like a HEL, a HELOC relies on the existing equity of a home to determine how much you can borrow. Lines of credit that use a home as collateral are dependent on the market price of the area and region.
Unlike other types of financing, HELOCs often have adjustable rates and rules about how much money you can borrow. This loan may make sense for someone with lots of equity in their home, but also comes with closing costs, financing fees and other upfront costs that can outweigh the benefits.
Pros of Financing a Kitchen Remodel with a Home Improvement Loan
Home improvement loans can be the leg-up you need to fund an otherwise unreachable project. Many offer better-than-average interest rates and special provisions for certain types of borrowers. Because kitchen remodels can greatly improve a home’s value, you can look at these loans like investments: money you spend now to make more money later, if and when you decide to sell the home.
Cons of Financing a Kitchen Remodel with a Home Improvement Loan
Though many home improvement loans offer better interest rates and terms, they can be difficult to qualify for–especially if you don’t have great credit. You’ll likely need to meet a certain criteria to be eligible (with FHA loans, for example) and you may need to make extra or higher payments each month, depending on the interest rates available.
What’s The Best Way to Finance a Kitchen Remodel?
Start building your dream kitchen sooner than later. Personal home improvement loans offer many advantages over other types of financing including seamless application processes, flexible terms, fixed rates and varied loan amounts. With shorter processing windows, and no need for collateral, personal loans are a quicker, easier way to start your project.
How Much Does Financing a Kitchen Remodel Cost?
When it comes to calculating the cost of your remodel, location matters. Where you live and what kind of home you have will dictate many of your costs. For example, kitchen remodels in upscale homes typically cost more than those in starter homes. As well, homes in higher cost-of-living areas will typically have more expensive kitchen appliances and furnishings.
On that note, what costs most in a kitchen remodel? Cabinets are usually the most expensive components of a kitchen remodel, running anywhere from $2,000 to more than $30,000 according to Angie’s List. However, new appliances–dishwashers, stoves, refrigerators–can also run up the bill, depending on the manufacturer and eco-efficiency.
Home Improvement Loan Rates
When you’re shopping around for a home improvement loan option, be sure to look closely at the rates available. Rates and repayment terms will vary depending on the amount of money you need for your project, the loan term, APR, and whether or not you have a cosigner. (A cosigner with a higher income or a better credit score may help you secure a better interest rate.)

**Required Minimum Monthly Payment of $99
How to Apply for a Kitchen Remodel Loan
Ready to kick-start your kitchen remodeling project? When you apply for a personal loan with AmeriFirst, the process is simple. The online application starts with just a few quick questions. Once you’re approved, you’ll receive your loan amount, anywhere from $5,000 to $80,000 directly deposited into your account. And just like that, you’re on your way to building your dream kitchen.
What to Look for From Home Improvement Lenders
When you’re comparing online lenders, trust matters. Choose one that makes you feel confident in tackling your kitchen remodeling project–one that understands your financial needs and proposes solutions that fit them. AmeriFirst has served consumers since 1979, and we take pride in our track record of integrity and innovation.