How to Pay for Pricey Home Repairs

Summary
There are a number of different ways to finance a home repair project, including personal loans. Learn more about all of your options.
In this article:
Home upkeep is a normal part of homeownership. But financing home repairs, even when they’re expected, can seem daunting.
Whether you’re dreaming of a long-awaited renovation or dealing with something urgent, we’re exploring how to pay for expensive home repairs so you can plan for the future with confidence.
7 Ways to pay for home repairs
From tapping into your savings to home renovation loan options, home repairs don’t have to be out of reach. With some careful planning, you can get your home in tip-top shape. These six ideas can you get started.
Tap into your savings
It can be tempting to turn to credit cards or home repair loans when you’re trying to figure out how to pay for expensive home repairs. But a much-needed kitchen renovation, or your dream deck, could be the perfect reason to tap into your savings. If you’re facing an urgent home repair, such as a leaky roof or broken air-conditioning, your emergency fund could be an ideal solution.
Low on savings? That’s ok. Sometimes the best way to pay for (non-urgent) home repairs and renovatons is to take your time and start saving for them. Daydreaming about cookouts on that new deck may be just the encouragement you need to set a savings goal – and meet it.Home equity lines of credit (HELOCs)
Homeownership has its perks, especially when it comes to home equity, which can come in handy when it comes to large purchases like renovations.
Home equity is the difference between what you owe on your mortgage and your home’s value. A home equity line of credit, also known as a HELOC, can be a great financing option for home repairs. A HELOC is a revolving credit line secured by your home. They’re calculated by subtracting what you owe on your home from its appraised value.
In general, the more equity you have in your home (i.e., the less you owe), the larger the line of credit lenders may offer you. This can be great news if you’re facing expensve home repairs that require a contractor.Home equity loans
Similar to HELOCs, home equity loans require you to have a certain amount of equity in your home. They also use your home as collateral. But, unlike a revolving line of credit, you receive one lump sum and agree to make equal monthly payments over a fixed term.
Shopping around and reading the terms carefully is the best way to ensure you get the best home equity loan available to you. Read more about using your home’s equity to pay for pricey home repairs and other expenses.Homeowners insurance
If the repairs or renovations are the result of damage from a natural event covered by your homeowners insurance policy – such as a storm or earthquake – your policy may end up paying for some or all of your home repairs.1 Replacing something like an old appliance or 30-year-roof with normal wear and tear wouldn’t typically be covered by homeowners insurance policies. But if there’s a doubt, check your policy or ask your insurance company.Government loans and grants
The U.S. government’s Section 504 Home Repair program lends money to qualified homeowners to repair, improve or modernize homes. If you’re over 62, you may be eligible for a grant. As you can imagine, there are specific rules and requirements you must meet, but if you do, you could get a low-interest loan of up to $20,000 or a grant of up to $7,500.2Personal loans
A personal loan for home improvement from OneMain can be a great option to finance home renovations as well. Depending on the lender you choose, you may even be able to get money the same day you apply.
Unlike credit cards, a loan to repair your home will provide you with one lump sum to spend how you’d like. Then you’ll pay it off over a set amount of time with set payments so there’s no surprises.Credit cards
Ideally, you should only use a credit card to finance a home repair that’s urgent and can’t wait. Credit cards are good tools when used responsibly, but their interest rates can be higher than those of personal loans and home equity lines of credit. And unlike a home repair loan, monthly payments can be unpredictable.
How will you pay for your home repair projects?
Whatever you have on your homeowner to-do list, be sure take your time and weigh your payment options. If your list contains larger projects, don’t let the thought of hiring contractors deter you. With some research and preparation, you can get the job done – with financing that meets your needs.

1. https://www.thehartford.com/aarp/homeowners-insurance/act-of-god
2. https://www.rd.usda.gov/programs-services/single-family-housing-repair-loans-grants
This article has been updated from a previous posting on July 9, 2020. Jeff Rasmussen contributed.
This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.