How To Finance A Minor Renovation At Home

You spend a lot of time in your home. The way it looks and functions is very important. Maintaining a home is also a long-term investment. This keeps the value high or at best increases it.

Whether you need to do simple home repairs or want to renovate a specific room the price tag is hardly ever low. To ensure the renovation becomes an investment rather than a long-lasting debt you need to have a plan.

If you don’t have money saved for this task, there are many types of credit available to you. So you really need to weigh up your options. Read on to discover what’s available as well as some helpful budgeting tips.

Get Many Quotes

Don’t settle for the first quote you get from tradies or reno businesses. Get several quotes and consider bargaining if you find a better rate. It doesn’t matter if the expert you choose does carpentry or plumbing, it’s still possible to score a bargain.

You can even get a friend that is good at bargaining to do this for you. When you get a quote, be as specific as you can. Let the professional know the room dimensions or anything else about your vision so they can give you an accurate price.

Read reviews of their business online. If they were referred by word of mouth, ask for details about the quality of work/level of professionalism.

Budget for the Renovation

Once you have an idea of the general price of your renovation, begin budgeting. You may need slightly more than what you’re quoted for. This is because the quote is only an estimate of the total cost.

Whoever you hire may discover things like water damage or loose wiring. This may need to be addressed before construction can begin. This will then become an additional cost. So you may want to add 10-20% of the quoted amount to work out your total budget.

If the construction is less than the entire value, you could put the leftover money back into the credit type you’ve chosen. For example, if you take out a personal loan, use the ‘leftover’ money to pay back the loan in advance.

Weigh up Your Options

There are many types of credit available for home renovations. However, the one you choose depends on the value of the renovations. That’s why it’s important to figure out your budget first. ‘Minor’ renovations mean something different to each person.

Each of these types of credit will have a different value bracket. For example, a full home renovation that may involve a home expansion will suit a construction loan. On the other hand, a personal loan might suit fixing leaks and repainting the house. Take a look at some typical options listed below.

1. Line of Credit

This option is useful if the renovations are going to take months to complete. This is a revolving credit. You only borrow money when you need it up to a certain limit.

There are minimum repayments but you can make larger repayments if you want. You only pay interest on the amount you borrow. This is a good option if the renovations don’t have a clear price.

The benefit of the Line of Credit is that you don’t have to withdraw the full amount if you don’t need it. For example, if you take out a $10,000 line of credit and only need $8,000 you can just withdraw that amount. So the $2,000 can be saved for other upcoming expenses.

Also, as you pay back the line of credit, you can continue to withdraw and payback as you need. It works similar to a credit card.

2. Homeowner Mortgage

This option suits very expensive renovations. If you plan to overhaul the interior/exterior of the property, this kind of credit could help. These loans are typically a large percentage of the current property value.

The interest rates may be lower than other forms of credit and these loans are often long-term – like 20-30 years. This solution might suit experienced property renovators.

3. Credit Card

Upping the limit on your current credit card or possibly getting a new one may be an option for you to consider if you’re planning a small renovation project.

While the interest rate on some credit cards might be higher than some of the other options on this list, if you shop around, you may find some credit cards with a lower interest rate. However, some of these may also come with establishment and additional fees.

4. Personal Loans

Personal loans are best suited to minor renovations, much like credit cards. They have a lower borrowing limit. The requirements to obtain a personal loan may be more relaxed than the other options on the list.

But before you apply, you may want to check out the cost of the loan and ensure that you can make the minimum repayments. Personal loans sometimes come with an establishment fee and additional fees. It helps to calculate if it fits your budget.

If you’re deciding between a personal loan or a credit card, it helps to weigh up the costs difference by calculating the total cost of the credit card vs. the total cost of a loan. Do this calculation assuming you will only make the minimum repayments.

Make Your Dream Home a Reality

If the home you’re in has issues that bother you, it’s definitely worth considering making some improvements. If you’re smart with your choice of credit solution, it can be a great investment for the future!

If you’re unsure about how to finance the above, you’re in luck. Credit24 has loans up to $10,000 that could help fund your home renovations. Visit to find out more.


IPF Digital Australia Pty Ltd, trading as Credit24, ABN 59 130 894 405. Australian Credit Licence 422839. Lending criteria, fees and charges apply.

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