Every year, Americans look around at their homes and decide it’s time to make a change. In 2020, Americans Spent Nearly $420 Billion On Home Improvement Projects, many of which were do-it-yourself projects.

While deciding what room, which cabinets, and what color of paint is important, one of the first things any homeowner has to decide is how to pay for these renovations; big or small.

There are a number of options. What’s most important is choosing the one that’s right for you.


The simplest way to pay for anything is with cold hard cash.

For one thing, it’s the best way to stay on budget. 

It can also save you money in the long run. If you’re working with local contractors, paying with cash or check costs contractors fewer processing fees and they’re able to access the money faster. That can make things move more quickly, helping you avoid price adjustments on materials.

Plus, having the cash helps you avoid potential debt and interest associated with loans and credit cards.

That said, you have to make sure you have the cash. It takes time to save up for a big project. If you’re going for a major remodel – like say a kitchen – this one typically requires you to save for a while. Even the low-end average cost of a kitchen remodel is around $10,000.

Don’t pull from your emergency savings. Save money up specifically for this project. Yes, that might mean you need to put off the start of the project, but you want to ensure you have more than enough funds to cover it.

At RiverWind Bank, we can set you up with a savings account that includes our Roundup program, an account that moves money into it every time you use your debit card, helping you save faster.


If you’ve been living in your home for a while, then a home equity line of credit (HELOC) might be right for you.

A HELOC is a revolving credit line – meaning it stays open even when you’ve paid off what you borrowed – that is tied to the amount of equity you have in your home. Typically, you need to have built up at least 20% equity in your home.

Because a HELOC is tied to your equity, your credit limit will be based on how much you’ve paid on your mortgage. Also, interest rates tend to be lower because your home’s equity is being used as collateral. That said, rates are variable and can increase and decrease from month to month.

A HELOC is a convenient way to access credit when you need it and pay it back over a flexible timeline.

Home Equity Loan

Another way to utilize the equity you have in your home is with a home equity loan. Also known as a second mortgage, these are great if you need a large lump sum.

The interest rates do tend to be higher, but that interest may be tax deductible.

Similar to your first mortgage, you’ll have to qualify for the loan, meet any lender requirements, and pay various fees. The typical term is 15 years or less. The loan can be refinanced later if necessary, but you will have to pay off the balance if you sell your house.

One thing to note with both a home equity loan or HELOC; dipping into your home equity actually reverses the equity-building process. 

Credit Card

If you’re planning a smaller project, a credit card could be a good option. If you can get a 0% APR, it’s like getting an interest-free loan. BUT, you have to be sure to pay it off quickly.

Be sure to review the card information carefully for any hidden fees, and don’t use the card for any purpose other than the home improvement project so you can stay on your pre-planned pay-off schedule.

Grants and Special Programs

There are numerous grants and low-cost loans for home repairs, rehab, and energy-efficiency upgrades available, and you should investigate all of them before taking out a loan or applying for a credit card.

Whether or not you qualify typically depends on your income level and the type of house you have. That said, income restrictions that do exist often vary wildly.

There are four more common types of programs:

One option is an HIP loan, or home improvement program. These are subsidized loans that can save you a lot of money, especially on interest, compared to commercial loans. There’s usually an income cap, plus a variety of rules.

There are programs that can help with renovations for medical or disability reasons. You can find a large list of home modifications for homeowners with disabilities here.

Similarly, if your home improvement project will make your home more energy efficient, you can find all sorts of incentives and low-cost loans. You can find a collection of options in Arkansas here.

Personal Loan

If you’re planning to make some minor renovations around the house, a personal loan might be a good option. But, they may be more limited than other options. The interest rates on personal loans are often higher than they are home equity loans.

RiverWind Bank can help with a number of these, including personal loans, HELOCs and home equity loans, credit cards, and savings accounts. Visit our locations page to contact the RiverWind Bank nearest you.