When you cannot pay cash for a major home project, the financing you choose can easily change your total cost by $1,000–$5,000.
The five common options
1. Cash — 0% cost of capital. 2. HELOC — prime + 0–2% variable. 3. Contractor financing — 0% in promo window, 18–28% retroactive if missed. 4. Credit card — 18–29% APR. 5. Personal loan — 9–18% APR, fixed term.
Cost-of-capital comparison (A $10,000 project over 36 months)
- 0% promo card paid on time: $10,000 total - 8% HELOC: $11,300 total - 12% personal loan: $11,800 total - 24% credit card: $13,500 total
The right answer depends on how much equity you have, your credit score, and whether you can reliably clear a 0% promo.