The best loan for your bathroom remodeling project

Deciding if you want a renovation

If you’re like most people, your day starts and ends in your bathroom, so why not make it a space you love? An amazing shower, a huge soaking tub, acres of his-and-hers vanity space—the sky’s the limit.

If a bathroom remodel is on your wish-list this year, you’re not alone. 

Bathroom projects have occupied the number-one spot on the National Association of Home Builders Remodeling Marketing Index for several years in a row, edged out by kitchens in 2017 by a measly 1% (81% kitchen vs 80% bathroom).

What’s triggering all these bathroom remodels? Would it surprise you to know that “I just can’t stand the old one anymore” is the most common reason people renovate this space? 

Almost 50% of people who remodeled last year gave that response, while “sensible” reasons like “I needed to repair extensive damage,” or “The old bathroom was unhealthy or unsafe” came in at just 3% and 8% respectively. 

If you spend an hour or more a day in the room, you might as well enjoy it!

Bathroom remodels are a bit more complex than a lot of home improvement projects you’ll undertake—you’ll need qualified professionals to handle plumbing, electricity, and possibly even construction, and lighting and flooring installation. 

And the costs can vary wildly, depending on the furnishings, fixtures, and finishes you choose.

The key to a successful bathroom remodel is a carefully planned budget and responsible financing, and that’s what this guide is all about. We’ll give you tips on planning—and budgeting for—your project, potential pitfalls to avoid, and information to help you choose the right financing option for you.

How much does it cost?

According to HomeAdvisor, the national average last year was about $10,000, with high-end bathroom remodels coming in at nearly $25,000. But that leaves out a key cost factor—whether you’re remodeling a master bath or one of the other bathrooms in your home.

When it comes to master bath remodels, the figures are quite a bit higher, with about 40% spending between $10,000 and $25,000, and 25% spending between $25,000 and $50,000. A few big spenders (around 10%, actually) spent over $50,000 on their new master bath.

How is that money spent? Take a look at average costs for some of the most common changes homeowners make when they remodel a bathroom:

• Install a new bathtub – $3,000 to $8,000 (the tub itself can add between $500 and $2,000)
• Install cabinets and countertops – $4,700 to $13,000
• Install a new sink – $1,400 to $6,500
• Install a new shower – $3,000 to $10,000
• Install new flooring – $2,500 to $7,000
• Install new lighting – $1,100 to $4,000

If you’re freaked out over the huge range in prices, keep in mind that you can choose to use off-the-shelf solutions or go with completely custom ones. Obviously, a pre-made vinyl shower surround with a standard shower head will cost a whole lot less than a custom-designed tile surround and custom thermostatic shower system.

And if you can buy standard-sized cabinets from a home improvement store, you’ll save money compared to having a carpenter create ones specifically to fit your space.

A word of caution for the DIYer in you

A little do-it-yourself work can trim costs for your project, but this is one area where it’s really not wise to skimp on skilled labor. About 90% of homeowners who remodeled last year hired a professional, and over 50% used a general contractor to oversee the work.

If you really want to get your hands dirty, stick to front- or back-end work, like ripping out and disposing of your old fixtures, or painting walls and trim. Leave the more complicated projects to the pros—they have the skills and experience to make sure you’re happy with the results for years to come.

What are my lending options?

A financial advisor will always recommend paying for your remodeling projects with cash, but let’s be honest, you probably don’t have $20,000 lying around. 

On the other hand, with aesthetic improvements, you may want to save up for a year or two until you do have money in the bank. You’ll save hundreds, if not thousands, in financing costs.

But if you do decide to finance, you have three options—a home equity loan or line of credit, a personal home improvement loan, or a home improvement credit card.

 Each has its own advantages and disadvantages.

When should I use a personal home improvement loan?

These are probably your best option for a major bathroom remodel, especially if you lack adequate home equity for a secured loan. Personal home improvement loans are unsecured—you only need good credit and proof of income to qualify.

These loans are usually available in amounts up to $35,000 ($100,000 with some lending partners), which should cover all but the most upscale bathroom remodels.

And speaking of budgets, personal home improvement loans have fixed interest rates and fixed monthly payments—you’ll pay the same amount every month for the life of your loan.

You also won’t get hit with a flurry of fees; in most cases, you pay just a simple loan origination fee when your loan is approved. And if you want to pay your loan off early with your tax refund or windfall bonus from work, you won’t get socked with a prepayment penalty.

If you’re anxious to get started on your bathroom remodel, you can usually get approved in 24 hours or less, and have your money in the bank in just a couple of days.

There is a catch, however: You typically need good credit with a minimum credit score of 640 to qualify. 

You may find a lender willing to approve your loan if your credit isn’t up to par, but you’ll pay prohibitively high interest rates. 

If that sounds like you, do yourself a favor and work on repairing your credit before you begin remodeling your bath.

When should I use a home improvement credit card?

The thing about credit cards is that they are generally best when you need to borrow a small amount of money for a short amount of time. If you’re doing a major master bath remodel, this may not be your best option.

On the other hand, if you’re sprucing up a guest bath or powder room, and your project is less than six figures—or you’re doing a lot of the work yourself—a home improvement credit card could be a perfect fit.

Home improvement credit cards work like other major credit cards you carry—you’re approved for a credit limit and you can spend as much as you want up to that amount. Your payments vary each month based on your balance, which can make it hard to budget, however.

Interest rates are generally higher than with a personal home improvement loan, usually between 15% and 24%—but many lenders offer a 0% introductory rate for the first 6 to 18 months. 

If you can pay off your balance during the introductory rate, you can avoid finance charges altogether, making home improvement credit cards your most economical option.

If you can’t, however, they could definitely be the most expensive choice.

It’s smart to hammer out an airtight budget for your bathroom remodel before you begin if you’re using a home improvement credit card—it’s way too easy to go crazy with unplanned upgrades if your credit limit is higher than your project budget. 

Unlike a home improvement loan, where you get a lump sum equal to the amount of your planned remodel, you can spend as much as you want on a credit card, as long as you don’t exceed your limit. You can see how you could get into trouble and blow up your monthly budget.

One last thing—some contractors add a 5% surcharge to bills paid with plastic. 

If you’re planning to use a credit card, ask your contractor before you do. You may come out ahead taking a cash advance to pay rather than paying the extra fee.

How to request financing

If you’re ready to see your options, Hearth helps you find the best rates on home improvement loans and home improvement credit cards. Our loan request process takes just 60 seconds to complete and won’t affect your credit score.

Common bathroom renovation pitfalls

Bathroom remodels involve a lot of moving parts and a relatively small space—plus lots of potential for unexpected problems. Before you start the budgeting process, keep this tips in mind:

• Budget for hidden damage. You might be surprised at what your contractor finds once he begins work. An unnoticed shower leak could leave behind thousands of dollars in structural water damage that will need to be repaired before cosmetic work begins. Add 10% to 15% of your total remodel budget to cover any unexpected issues. If everything goes smoothly, you can put that money back in your pocket-or use it to pay down your loan.
• Don’t rush the planning phase. Want to avoid expensive cost overruns? Then take the time to plan carefully so things are done right the first time—a process than can take several weeks. Try to design around existing major plumbing lines and drains to keep costs down.
• See things in person before you buy. You can save a lot of money buying materials and fixtures online, but visit a showroom first and see them yourself to make sure colors and finishes are exactly what you want. Once you have a product in mind, go ahead and price shop online—your dealer may even offer to beat any price you find.
• Know where you can skimp—and where you shouldn’t. Toilets, faucets, and lighting fixtures tend to perform pretty consistently across all price points (and all but the cheapest have lifetime warranties); what you pay for is design. But when it comes to tiles, for example, super cut-rate tiles tend to have minor discrepancies in size and shape, which will make the finished work look shoddy.
• Get it in writing. Some contractors price by the hour, some by the job, and prices may vary depending on the materials and finishes you choose. Be sure your contract covers all the details and leaves no room for misunderstanding or dispute. If the contractor is providing materials and supplies, be sure your agreement specifies every product by model number and finish where possible.