Should I Consider a Personal Loan or Possibly Refinancing to Pay For My New Roof?

When it comes to paying for a new roof, you do have a few options. A personal loan or refinancing may be the first two ideas to come to mind. If you’re comparing these two financing options before hiring a Kissimmee roofing company, let’s take a deeper look at them.

Personal Loan

Before you commit to the idea of taking out a personal loan to pay for your new roof, it’s vital to understand what a personal loan is as well as the pros and cons of one for a new roof. 

A personal loan is an unsecured loan that is generally repaid over two to seven years. Since personal loans are unsecured, you’ll pay a higher interest rate than with other types of loans. Interest rates can be anywhere between 6% and 36% depending on the lender and your credit score.

Personal loans are offered through many lenders, but you often need to have a good credit score to obtain one. In most cases, a credit score of at least 640 is necessary. Higher scores will grant you a loan with a lower interest rate, whereas, lower credit scores will predictably result in a loan with a higher interest rate. 


Usually, people cite one of these three pros when choosing a personal loan:

With a personal loan, there is no collateral necessary. This means that you aren’t at risk of losing your home if you ever fail to make a payment.

Personal loans are a quick way to fund a roof replacement. Many online lenders will grant you a personal loan within a day, which means you have access to the money you need quickly. 

Although personal loans have higher than normal interest rates for loans, they have lower interest rates than credit cards. If your other option is to put the full roof replacement on a credit card, taking out a personal loan may result in less interest paid over time.


Unfortunately, personal loans aren’t without fault. Despite having an interest rate that’s lower than most credit cards, personal loans do have a fairly high interest rate overall. You’ll have a shorter repayment schedule, but the interest will be high.

You won’t have any tax benefits with a personal loan which means not only will you pay a high interest rate, but you also won’t get any tax deductions from it.


Often referred to as a cash-out refinance, refinancing your home mortgage is another common way to pay for a new roof. This allows you to take out a new mortgage for more than you actually owe and put the excess toward the cost of replacing your roof.

With a refinance, you can expect lower interest rates than your current mortgage. While this isn’t always true, it can be done with market research and investigation. However, just like with personal loans, there are both pros and cons to refinancing to pay for a new roof. Unfortunately, the cons are fairly numerous.


As mentioned above, refinancing often results in a lower mortgage interest rate. You may also be able to switch from a variable-rate mortgage plan to a fixed-rate plan.


When you refinance, you use your home as collateral. This means that, should you miss a payment, you’re at risk of losing your home.

Refinancing isn’t a quick process. It will take much longer to secure funding for a roof replacement, so this isn’t the best choice if you’re in a rush. Lenders can (and will) be picky and demand quite a bit of paperwork, so be prepared.


Replacing your roof is a significant and expensive project which means you have to really think about the financial impact of it. Fortunately, there are options available that allow for some flexibility in how you pay for a new roof.

Before you decide, it’s crucial to consider your current financial status and what you can likely afford in the future. In some cases, refinancing is a better option, whereas, in others, a personal loan is your best bet. It all depends on your situation and what you can afford. If you have any doubts, don’t hesitate to contact us for advice as we do provide financing options for our customers.

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