Best Options for Kitchen Remodel Financing

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by | Feb 9, 2021

Best Options for Kitchen Remodel Financing

For many families, the kitchen is the center of most activities. It is not just a place where food is cooked and eaten. It is also where families and friends gather, hold parties, essential discussions and decisions are made, school work gets done, and most importantly, where memories are made. If done correctly, a custom-designed kitchen can bring more joy to your life, enhancing your quality of life.  And let’s not forget the value it adds to your home.

If you have lately been feeling the need to renovate or upgrade your old kitchen completely? Or you have just shifted to a new home and want to settle for nothing less than your dream kitchen; then this ultimate kitchen remodeling financing guide is for you. This guide covers primary reasons people consider kitchen remodeling and the value it adds to your home. We have also tailored this guide to give you an idea of different kitchen remodeling types you can get done and, finally, financing options you can consider for your kitchen makeover.

What Are Some Of The Common Reasons To Remodel Your Kitchen?

Despite kitchen remodeling being a hefty task, homeowners always find reasons to go ahead with it. Reasons can vary from remodeling to sell their house for a better return to just wanting to enjoy a dream kitchen, amongst many others including:

1. Improving functionality

If you feel your kitchen has an awkward layout and could use more storage and prep space, or if your kitchen is deteriorating with tiles cracking or the Formica countertops scratching, then you may want to go for a makeover!

2. Upgrade to meet your family’s needs.

While the kitchen may be perfect for the family before you, it might not be for you. Perhaps, it is missing a breakfast bar or space for a dining table, or maybe you want a gourmet kitchen with quartz counters, a warming drawer, and cafe chairs for guests. If your current kitchen doesn’t fit your lifestyle, you can consider a makeover to transform it into the kitchen of your dreams.

3. Upgrade according to your style.

Since a kitchen is the place where you spend a lot of your time; you would want it according to your aesthetics. If you feel your existing kitchen does not reflect your design and styling taste, then it is time for an upgrade.

4. Increase your home’s resale value

A freshly remodeled kitchen will increase the market value of your kitchen and will likely attract more buyers. This is the most prominent reason that leads to homeowners considering a kitchen remodel.

5. Increase energy and water savings

Remodeling a vintage kitchen will give you a chance to reduce the artificial light and add more sunlight or skylights. You can also cut down your electricity bill by upgrading to energy and water-saving appliances and ecologically smart materials in your kitchen.

What to Include In Your New Kitchen Design?

Now that you have decided to remodel your kitchen, you must know how you can utilize your kitchen space, what materials and appliances will come into your kitchen to make it look appealing, and increase its life by a few years.

1. Kitchen functionality:

Before you decide on the colors, tile patterns, and material, you need to think about the purpose of using your kitchen? Is it only for cooking or more like a hangout space? Also, will you be eating in the kitchen? What kind of storage space do you need in the kitchen? Just a fridge or do you want pantry storage as well; all these functionalities will decide the layout of your kitchen.

2. Kitchen style:

Next, you can decide which kitchen style is best for you – you can choose from styles such as traditional, contemporary, transitional, or vintage.

3. Kitchen materials:

Your aim should be to choose durable kitchen materials, so they last you years while looking great. It would be best if you focused on including; countertops, cabinets, flooring, plumbing fixtures, tiles, and sinks.

4. Kitchen appliances:

Kitchen appliances seem easy after the daunting task of finalizing the materials. You can decide on your kitchen appliances following your functionalities in the kitchen. Some necessary kitchen appliances needed include a dishwasher, stove, oven, refrigerator, and microwave.

Before you dive into your kitchen renovation, you have to be clear about the elements mentioned above. These will directly decide the cost to be incurred in the remodeling project. This can be of great help if you wish to apply for a loan; you’d have an idea of the amount you should be using.

The Main Question – Does Kitchen Remodeling Increase Your Home Value?

If you plan on kitchen renovation to increase your home value for reselling purposes, you should know that kitchen remodeling is considered one of the best investments you can make in your home. According to a recent survey, you can retrieve up to 80% of your initial kitchen remodeling investment when you sell your home.

It is no secret; buyers pay more for high-end finishes and fancy upgrades. 80% of homebuyers prioritize the kitchen on top of their three most important spaces to look for when buying a home. 69% of buyers who purchased homes said they were willing to pay more if the kitchen had new appliances, and 55% said they would have paid more money for granite countertop, furnished cabinets, and smooth flooring.


Average ROI on a Kitchen Remodel

Recovering the cost of a renovation depends on the investment. How much you usually recoup has a lot to do with how much you spend and what sort of renovation you opted for. For example, the average national ROI for an upscale kitchen is around 54%. That means you recover about $68,000 after spending around $126,000. A minor renovation project costs about $21,000, while the amount recouped on a little kitchen remodel is $17,000. It makes an ROI of 81%.

Your ROI can also vary based on your home location and how well-maintained you kept your kitchen. Suppose you live in the country’s pacific area, the national average ROI for a minor remodel would increase from 81% to 93%, but if you live in Iowa or North Dakota, you will only receive 68% of the cost spent based on national averages.

So, Is It Really Worth It?

The answer solely depends on you and your objective. Let’s look at it this way; if you’re planning to put your house on sale within two months, then it may not be a smart move to put $60,000 into your kitchen if your estate agent predicts that you’ll recoup only $40,000. That’s $20,000 down. Absolute no! In such circumstances, play smart and do a few needed renovations that will cost you $5,000 – $10,000 only. This makes more sense. Your estate agent would give you the best advice before you hit the market – so you can attract more buyers.

But how about you remodel your kitchen to enjoy yourself? Working in a kitchen that you love can positively impact your daily life. For people who remodeled their most crucial space in 2017, 33% of those said they adopted a healthier and more hygienic lifestyle after renovating their kitchen. Nearly 50% said they enjoyed more time with family, and 41% said they have started cooking more at home. Well, they are right. It’s tough to deny these perks!

Updating your kitchen space can still be worth the investment for you and your family, even if you don’t recover the entire amount of your remodeling when you decide to sell your home.

How Much Remodeling a Kitchen Can Cost?

Remodeling or upgrading your kitchen can get costly very fast, especially if you dream of custom cabinets, spacious islands, and quartz counters.

Value Reports vs. Remodeling Magazine’s 2018, states the average expense to renovate a 200-sq.foot kitchen with wooden cabinets, laminated countertops, an island, and a standard quality sink with a mediocre faucet is $64,000. This budget also includes upgraded appliances, flooring, and new lighting.

However, it depends on you how much more or less you are willing to spend. For example, a gourmet kitchen with customized cabinets, granite countertops, and tile backsplash, built-in and commercial-grade appliances can cost up to $126,000. A simpler renovation that consists of replacing appliances, changing only cabinet fronts, installing new flooring, and choosing new lamination for counters can give you a hit of $21,000.

But don’t let these prices demotivate your decisions just yet. We can help you finance your dream kitchen without you feeling the financial constraint. The answer to the question as to how much will your kitchen remodeling cost depends on your renovation ideas and your budget.

Let’s take a look at some of the best options to finance your kitchen remodel.

How to Finance for your Kitchen Remodel?

A kitchen remodel is one of the most expensive home improvement projects that a homeowner will undertake.”

-Marlin Martin, Owner of Eagle Building Solutions.

1. Personal loan

A personal loan can be the best option for funding your kitchen remodel, particularly when you are running short of cash in hand and don’t have enough equity in your home to use. Usually, homeowners who plan to get the remodeling done with $30,000 opt for personal loans. These loans are unsecured and can be granted based on your credit history without keeping your house as collateral.

The application procedure is relatively easy and quick, with an approval time of less than 7 days. Once your request is approved, the fund appears in your bank account, ready to be withdrawn almost immediately. The best factor of personal loans is that they come with long-term repayment terms, typically over 60 months, making it easier for you to handle the monthly payments. Often, the interest rates are also fixed from 6% to 36%. Your interest rate will be higher when your credit score is low. However, some lenders also consider borrowers with low credit scores.

These are the most common pros and cons associated with personal loans for kitchen remodeling in a broader picture.


  • Available to large credit spectrum
  • Quick online application and approval procedure
  • Quick funding (in some cases within 24 hours).
  • Competitive interest rates, with good credit.
  • Expectable payment amount with a fixed interest rate.
  • You can choose the length of your loan.
  • Numerous lenders to choose from.


  • The lower your credit score, the higher the interest rate.
  • Potential fees for prepayment and loan origination.
  • Interest rates can vary from lender to lender

Looking for a personal loan? Search right here at Loan Glide.

There are plenty of lenders offering personal loans for home improvement and kitchen remodeling projects. Searching for them individually may take you some time as they all have different rates, fees, and requirements. We make it simple for you. You tell us your needs, and we will do the research and give you the best personal loan options to choose from with instant decisions. You can apply here.


2. Home equity line of credit (HELOC)

“The most common and cost-effective way to finance a kitchen remodel is to obtain a Home Equity Line of Credit (HELOC).”

-Jeff Hensel, sales and marketing director at North Coast Financial, Inc.

A HELOC is very similar to a credit card. It’s a rotating line of credit, and your home is put up to secure the loan. Instead of getting a lump sum amount like a home equity loan, a HELOC gives you a series of credits that you can tap into overtime.

Tapping into the equity in your home offers you the flexibility to move funds in and out of the credit line as needed. You only pay interest on the amount of money you borrow.”


But to be eligible for HELOC, you need to have good credit. You will also need ample equity in your home. Most HELOC lenders need a combined LTV – loan to value ratio of 70% or lower to qualify for a HELOC – The LTV ratio is your current mortgage amount owed divided by the evaluated value of your home. The combined loan-to-value includes the money you are willing to have on your credit line.

Estimate the combined LTV ratio by adding your current mortgage loan balance to the proposed amount you want for the HELOC. Then, divide that total by the present value of your home.


  • Nominal interest rates.
  • Interest paid could be tax-deductible.
  • Only withdraw the amount you need when you need it.
  • Only pay interest on the amount you borrow.
  • Stable source of credit.


  • You must have enough equity in your home.
  • Variable interest rate (your payments could increase over time).
  • You may need an appraisal.
  • The application process can be lengthy (often 25 to 45 days).
  • You risk losing your home if you fail to make payments.

HELOC kitchen financing example

Say your home is worth $250,000, you want a HELOC for $20,000, and your current mortgage is $150,000. The latter totals $170,000. That total divided by $250,000 equals a 68% LTV ratio, which would qualify you for a HELOC.

HELOCs provide credit for long periods. Many HELOCs allow for borrowing against the credit line for ten years; at the end of 10 years, the HELOC is often converted to a fixed loan. The outstanding balance is amortized over ten years.

During the application procedure, you will have to give the lender your home’s current value. You will have to share this information via a home appraisal.

3 .Credit Cards

Credits cards are customarily considered to be less affordable when we talk about kitchen remodel finance options. Credit card companies are most likely to charge more interest rates than other lending organizations.


  • Won’t raise your mortgage payment
  • Quick procedure – doesn’t take long
  • Easy to qualify for without a lengthy application
  • Many contractors accept credit cards


  • Will likely lower your credit score significantly
  • Loans amounts are lower than alternative options
  • Interest rates can be outrageous
  • People may not be able to pay back and get into a debt trap paying only monthly minimum payments


It’s your kitchen, and you get to decide which financing option works best for you. Compare and weigh the options keeping in mind your financial condition. How much you should request your loan to cover. How much money in cash can you put in for your kitchen remodel? You should spend some time mapping out all these things so that you can make the best financial decision for your kitchen and your family.

Are you a contractor?

Here’s some good news for you; continue reading.

Are you a contractor who loses clients after they know the total estimated cost of their kitchen remodeling? Don’t worry! We’ve got you covered. We offer flexible financing solutions for your customers with free consultations on which option is best and why your client should opt for it.

Next time, your customer isn’t going anywhere but instead getting their kitchen renovation done happily. You provide the consultation for the estimate of the total cost; we provide the loan financing services. Signup with LoanGlide for a valuable partnership!



Four Ways to Finance a Kitchen Remodel. (2020, November 19). Retrieved November 29, 2020, from https://touchstonekitchens.com/four-best-ways-to-finance-a-kitchen-remodel/

Jenkins, S. (n.d.). What Is The Best Way To Finance A Kitchen Remodel? Retrieved November 29, 2020, from https://architypes.net/kitchen/remodeling-loans/


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Are you a contractor?

Are you losing clients after they know the total estimated cost of their kitchen remodeling? Don’t worry! We’ve got you covered. We offer flexible financing solutions for your customers with free consultations on which option is best and why your client should opt for it.

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