Chapter 1: An Unexpected Visitor

Once upon a time, in a small suburb close to a large city, Goldilocks and her husband, Silverlocks, were on a stroll laughing about porridge.

But when Goldilocks and Silverlocks got home, their grins faded; their jolly laughter grew quieter. Something was not quite right.

“No matter how hard I try,” Goldilocks said, “I can’t stop thinking about how much more I like the bears’ kitchen than ours.”


Standing in the doorway was Mama Bear!

Goldilocks smiled. “I remember loving your kitchen so much all those years ago. It’s so comfy.”

“Well did you know,” Mama Bear asked, “our kitchen didn’t come like that? We have to renovate and build a new kitchen that felt just right.”

“Tell us more! How did you pay for it?” Silverlocks asked, leaning forward.

Mama Bear plopped down in Goldilocks’s velvet armchair and prepared to help.

Chapter 2: Mama Bear Talks Financing

“Let’s just cover the basics for now, as I want to go home to say hello to Papa Bear,” she said.

“You have three broad options,” Mama Bear explained, “You can pay with cash for your entire project. For small projects in our cottage, we used cash. Baby Bear loved the new paint in her room!”

Silverlocks said, “I don’t think we want a small project though. Our kitchen needs A LOT of work.”

Mama Bear didn’t immediately answer, but instead hungrily eyed Silverlocks’ freshly cooked porridge. For a second, she thought about eating the porridge as revenge for Golilocks’s actions several years ago.

But she resisted.

“That’s why you have financing,” Mama Bear finally continued, “First, you’ve got collateralized options. If you cannot pay back the loan, then the bank can take your home through foreclosure. Most secured home improvement loans use your home as collateral in return for low rates.”

“Ah!” Goldilocks exclaimed, “These are what HELOCs and home equity loans mean, right? Aren’t both long-term loans–typically around 30 years?”

Mama Bear answered, “Yes! The main difference between the two is that you can access money from a HELOC as needed, while a home equity loan (also known as a second mortgage) gives you all the money at once.”

Silverlocks then asked which types of projects collateralized loans are best for, to which Mama Bear replied that secured loans are best for very large renovations.

“We’ve talked about financing for projects that are too small for us!” Goldilocks exclaimed, “We’ve talked about financing for projects that are too large for just one kitchen! What is the just right financing choice for our new kitchen?”

Mama Bear nodded and gave Goldilocks a knowing wink, her paws planted on the armchair.

Chapter 3: The “Just Right” Option

“For your project, it seems like you want to think about getting a personal loan,” Mama Bear said with a satisfied smile.

Goldilocks and Silverlocks looked at each other with blank stares.

Mama Bear couldn’t resist anymore: “I’d love a bowl of warm porridge right now.”

A couple minutes, she leaned back in the armchair, porridge comfortably in her paws with a bear-sized smile on her face.

“We used a personal loan for our new kitchen. Unlike a HELOC or home equity loan, we didn’t have to risk our cottage as collateral. And, we still had relatively affordable monthly payments.”

Silverlocks interrupted and asked, “I heard collateralized loans take weeks to be approved, but I have a contractor who would start soon. He’s awesome, and I’m worried I’ll lose him if I can’t start the renovation soon.”

“I know the answer to this!” Goldilocks said excitedly, “I heard a friend talking about this. You can get your money as soon as a day after you apply.”

Mama Bear nodded her head.

“What about credit cards?” Silverlocks asked.

Mama Bear’s smile faded a little bit. “Stay away from those for your project, as you can quickly fall into too much debt if you don’t quickly pay off the card. Credit cards are best for small projects you can pay off within 12 to 18 months.”

Mama Bear then looked out the window.

“Looks like the Sun is going down. It was great to see you after all these years! But now it’s time for me to go. Any chance I could get some of that porridge for the walk home?”

Porridge in paw, Mama Bear left Goldilocks and Silverlocks.

The End

Personal loans won’t protect you from little kids who want to eat your porridge, but they are often the best way for you to finance your dream renovation.

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