If you’re looking for a home remodel but you’re worried about financing it, you may be surprised to learn there are multiple different types of home remodel loans available. Whether you’re looking for kitchen remodel financing or a home addition loan, here are two types of loans to remodel your house, and what to consider.
Secure Loans
Essentially, secure loans are home equity loans that involve using your home or other assets as collateral while you make monthly payments. Home equity loans for remodeling typically come with lower interest rates than other loan types, and are less strict with credit score requirements in order to get them.

The ease of getting secure loans is due to the security of using your home’s equity as opposed to unsecure loans that are based on personal financial wellness alone. These became less popular after the 2008 housing crisis when home equities plummeted, but today they are a great resource for investing in your home using existing equity.

Using equity to remodel is ideal for you if you are concerned about getting approved for a loan due to credit scores or debt accumulation, but you’re comfortable with your ability to make monthly payments for the long-term. These loans also typically come with higher dollar amounts as an added perk, with longer pay-off terms to keep payments low.

Unsecured Loans
These loans are sometimes preferred over secure loans, as they are considered a personal loan and don’t involve using assets as collateral. Unsecured loans are based on your credit score, amount of debt and credit history, so they are much quicker to get than secured loans. It is also a much quicker process to have money deposited in your account if you need the money sooner. However, since they are by nature less secure, the dollar amounts can be much lower than their secured loan counterparts. For this reason, they may be better suited to smaller home remodel projects such as a kitchen remodel or bathroom remodel.

Despite these cons, unsecured loans often don’t come with as many or any fees,whereas secured loans may involve application fees, closing fees and the like. These loans are ideal for you if you have good credit but are unwilling to use your home as collateral. They are also ideal if you’re ok with higher interest rates in exchange for spending less on interest over time due to the shorter pay-off periods.