Roof Financing: Best Ways to Pay for a New Roof

There are several ways to finance a new roof. The best choice for you depends on your credit history, how much home equity you have, and the type of loan that works best for your situation.

We’ll go through all the financing options including contractor financing, personal loans, home equity loans, HELOCs, and credit cards. Each one has its own list of pros and cons, so it’s important to compare all of the options side-by-side before you make a decision.

Top 4 best ways to finance a roof

There is no one-size-fits-all option, but the best way to finance your new roof depends on four main factors:

Your credit history
How much equity you have in your home
How quickly the new roof needs to be installed
The total cost of the project

Your unique combination of these factors determines the options that are available to you. And there are a few main ways to finance a new roof.

Contractor financing: many roofing companies offer their own in-house financing at the point of sale.
Personal loans: Personal loans are not secured by any asset and can be used with any contractor of your choosing.
HELOC/home equity loans: There are also HELOCs or home equity loans that allow you to use your home’s value to borrow money.
Credit cards: you could choose to use a credit card for smaller repairs or to bridge the gap until lower-cost financing can be found.

This isn’t an exhaustive list. There are other loan types you could potentially use, and there are many state and local programs that can help fund a new roof, especially if doing so is an energy efficiency improvement.

With that in mind, here’s a table for quick reference that compares the main options:

Option	Cost Structure	Secured or Unsecured?	Credit Impact	Often Best For
Contractor financing	Often has promotional interest rate terms	Varies	Hard Inquiry, New Account	Homeowners who want convenience
Personal loan	Fixed interest rate, depends on credit	Unsecured	Hard inquiry, new account	Homeowners who want a fixed payment without a second lien on their home
HELOC/Home Equity Loan	Fixed or variable rate	Secured by your home	Hard inquiry, new account	Homeowners with significant home equity
Credit card	Variable APR, may have intro promotional period	Unsecured	Hard inquiry (for a new card), impact on credit utilization	Smaller repairs, especially with 0% intro APR

Personal loan for financing a new roof

Benefits of personal loans

A personal loan is perhaps the most flexible financing option on this list, and in a few ways. It gives homeowners a lump sum of cash with a fixed monthly payment. The loan doesn’t require your home or any other asset to be pledged as collateral. And because the money is deposited directly into your bank account, you can use it with whatever contractor you want, not just one who partners with a bank to offer promotional financing.

Flexibility and convenience

Personal loans are typically unsecured loans with a fixed interest rate with a fixed term, and this is another area where there’s flexibility. It’s common to find personal loans with terms ranging from two to eight years (or longer in some cases), so you can choose a loan with a monthly payment that fits your budget. There’s no need to worry about a promotional financing period ending, or your interest rate changing over time.

Speed of funding

A personal loan can also be the quickest option. It doesn’t need an appraisal of your home, a title search, or a lien on your property, the time from application to funding can be quite short. It’s not uncommon for personal loans to fund within one business day after final approval.

Downsides to consider

Of course, there are some downsides when it comes to using a personal loan.

Interest rate considerations

Because they are priced on credit risk rather than the value of an asset like your home, interest rates are often higher than you’ll find on comparable secured loans like HELOCs. Your credit score, income, employment history, and other factors will determine your rate, and whether you’ll be approved at all.

While it isn’t the perfect choice for everyone, a personal loan through Upstart is one way homeowners can fund a roof replacement. You can check personalized offers and APRs without a hard credit inquiry1, so it’s certainly worth looking into for comparison purposes.

HELOC for financing a roof

If you have substantial equity in your home, a HELOC (home equity line of credit) or a home equity loan can be an option worth considering. Because the loan is backed by the value of your home, interest rates can be considerably lower than you’ll find with an unsecured personal loan.

There’s a big trade-off, however. A HELOC or home equity loan is secured by your home. If you don’t make your payments as agreed, the lender has the ability to foreclose on your home, just as if you stopped paying your primary mortgage.

A home equity loan works like an installment loan, and is often referred to as a second mortgage. On the other hand, a HELOC is a revolving line of credit that you can draw against during a set period as needed. So, if you end up needing other repairs in addition to your roof, a HELOC can be a good option for multiple funding needs.

Qualification for a HELOC or home equity loan depends on a few factors, including how much equity you have, your credit history, and the lender’s requirements. You can check out our guides on HELOCs with bad credit and HELOC requirements for more details of what lenders generally look for.

HELOCs generally aren’t the speediest way to go. You’ll typically need to wait for an appraisal of your home before the loan can be funded. But if you have significant equity in your home and are comfortable using your home to secure the debt, a HELOC could be a smart option for you.

Contractor in-house financing

Pros

There are two main reasons people choose contractor financing to pay for a new roof:

Convenience

Contractor financing is arranged at the point of sale, so you can get an estimate and financing in a single visit.

Promotional rates

Most roofing companies partner with lenders, which often offer promotional financing offers, such as 24-month 0% APR financing. This can certainly save money in some cases.

Cons

Deferred interest risks

Many promotional financing offers use deferred interest, which is different from true 0% APR financing. Under deferred-interest financing, interest is actually accruing from day one, but you won’t have to pay it as long as the entire balance is paid before it expires. The problem is that if there’s even an outstanding balance of $1 at the end of the promotional period, all of the accumulated interest that has been building from day one will be retroactively added to the account.

Potential dealer fees

Another potential issue is that some contractors build a “dealer fee” into the project price to offset what their financial partner charges them to provide promotional financing. This charge may not be disclosed, and may simply be included in the quoted price of the roof. So, a 0% promotional financing offer may be significantly more expensive than it looks.

This isn’t to say that in-house contractor financing is automatically a bad option. In many cases, it can be the most practical, and lowest-cost option. Just be aware of what the true costs and drawbacks are, and compare it with your other options.

Can you finance a roof with bad credit?

Yes, you may be able to finance a roof with bad credit, but you’ll likely have narrower options than someone with outstanding credit. For example, you may not qualify for 0% APR financing and your personal loan offers might have relatively high APRs.

However, you might have a few paths open to you. Several personal lenders consider multiple factors beyond the borrower’s credit score. And if you have substantial home equity, you may find that a HELOC or home equity loan can be easier to get (and to get a reasonable interest rate).

If you have bad credit, it’s a good practice to check your personal rate offers from multiple lenders, which you can generally do without agreeing to a hard credit pull. This lets you see the full picture of what is available to you without simply committing to the first offer you get.

If you don’t have great options available to you, it could be a smart idea to apply with a co-signer who has strong credit. Even if you can get approved for a personal loan on your own, this can make a big difference in the terms you’re offered.

Should you put roof repairs on a credit card?

The general answer is no, but there’s more to it. Credit cards can be a good idea for smaller roof repairs, or for short-term financing needs. For example, if you need your roof replaced ASAP, but you’re not expecting a check from your insurance company for a couple weeks, a credit card could be a viable option.

However, credit cards are generally not the best fit for a full-scale roof replacement. Carrying a five-figure balance at a standard credit card APR can add thousands of dollars to your overall cost.

One caveat is if you can use a true 0% introductory APR offer (not a deferred interest offer) to finance the roof, and you’re confident that you can pay it off before the promotional period expires. This option still has its downsides, such as increasing your revolving credit utilization and potentially lowering your credit score temporarily. But it could be worth looking into and comparing with your other options.

Are there government or utility programs for roof replacement?

There are some state and local governments, as well as utilities, that offer assistance programs for energy-efficient home improvements. In some cases, a roofing project that is expected to improve your home’s overall energy efficiency can qualify.

However, these programs vary widely by location. Many state and local programs have their own unique sets of rules, and there’s no guarantee that a roofing project (or yours in particular) will meet the eligibility criteria.

Having said that, these types of programs are certainly worth looking into. A local housing agency or your local utility provider can be a great resource to point you in the right direction.

FAQ

Is guaranteed approval for roof financing real?

No lender can guarantee approval for a roof replacement without reviewing an application. If you see offers that advertise guaranteed approval, regardless of credit, you should be very skeptical.

Can you get roof financing with bad credit?

Yes, it is possible to finance a roof replacement even with bad credit. However, the options available to you may not be as numerous or attractive as they are for borrowers with strong credit histories.

Personal loan or HELOC: Which is better for financing a roof?

There’s no perfect answer, and the best option for you depends on your home equity and your timeline. A personal loan is unsecured and typically funds faster, while a HELOC may offer lower interest rates, but usually requires an appraisal and can put your home at risk if something goes wrong and you can’t make the payments.

What are the risks of contractor in-house roof financing?

The main risk is deferred interest, where a promotional 0% interest offer may retroactively charge interest on the entire balance from day one if not paid in full before the deadline. Some in-house financing programs also build a financing fee into the quoted project cost to cover the cost of the promotional financing.

How do you compare roof financing options before choosing one?

It’s important to compare the total cost of financing, including the rate, term, fees, and details of any promotional period. It’s also important to consider how fast you need the funding, as not all of the options fund within a few days.

What credit score do you need to finance a new roof?

There is no set minimum credit score to finance a new roof. Credit requirements vary widely by lender and the type of loan product. Consumers with higher credit scores generally have more options and better rates, but customers with fair or even poor credit often still have some financing options available, especially if they have substantial equity in their home.

Are there government loans or programs for roof replacement?

There are some programs offered by state and local governments, as well as utilities, designed to support energy efficiency improvements. In some cases, roofing projects may qualify. A local housing agency can usually point you in the right direction if these programs exist in your area.

How much does it typically cost to finance a new roof?

The cost of borrowing can vary widely depending on the amount financed, the interest rate you are offered, and the length of the borrowing term. Depending on factors such as your credit, the equity you have in your home, and any promotional financing offers available to you, financing a roof can cost anywhere from $0 to several thousand dollars.

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