Contractor Financing Guide · Awareness

Financing Options for Home Improvement

By the Hearth team · Last updated: July 2026

TL;DR

The short answer

Homeowners fund projects five ways: cash/savings, home-equity products (HELOC/cash-out refi), credit cards, unsecured personal loans, and contractor-offered point-of-sale financing. Each has a different speed, cost, and psychology. For the contractor, the last category is the one you control: offering it at the point of quote means the funding conversation happens inside YOUR sale instead of at their bank three weeks later.

The homeowner's menu

Cash is simplest and quietly shrinks scope — savings caps the project. Home equity offers low rates but weeks of process, closing costs, and using the house as collateral; it fits planned renovations, not a dead furnace. Credit cards are instant but carry the highest revolving rates and card-limit ceilings. Unsecured personal/home-improvement loans — what point-of-sale platforms deliver — fund in days at fixed rates with multi-year terms, covering $1,000–$250,000 through marketplaces like Hearth.

Why the funding path changes your close

Every external path (bank, HELOC, their own card research) sends the buyer away from your table with homework — and cold quotes die. Point-of-sale financing keeps the money conversation inside the sales conversation: soft-pull offers in about 60 seconds while you're still on site. Offer breadth matters too — homeowners shown 4–5 offers fund at 6.7% vs 3.6% with one offer in Hearth's national data.

Matching option to project

Emergency replacements (roof leak, dead AC): speed wins — point-of-sale or card, and the card ceiling usually decides it. Planned five-figure remodels: homeowners weigh equity vs unsecured; having your financing option on the bid means the comparison includes a path that closes this week. Small tickets under a few thousand: cards and short plans are fine — financing earns its keep as tickets grow.

FAQ

What's the cheapest option for the homeowner?

Often home equity on rate alone — but closing costs, weeks of process, and collateral change the real comparison. Fixed-rate unsecured loans (from 7.99% APR through Hearth's lenders, credit-dependent) win on speed and simplicity.

Should contractors care how the homeowner pays?

Yes: funding path predicts close speed and scope. Externally-funded buyers stall and shrink projects; point-of-sale-financed buyers decide faster and keep scope.

What if a homeowner has poor credit?

Marketplaces beat single lenders here: 18 underwriting boxes instead of one, with offers reaching lower credit bands on some products.

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