When your roof needs replacing, it can be a daunting expense. Which is why many homeowners decide to finance the work rather than pay out of pocket. Some of the most popular roof financing options include using a home improvement loan, taking out a home equity loan or home equity line of credit (HELOC), or signing up for financing through a roofing contractor.
Each choice has pros and cons, so finding the roof loan that’s the right fit for your budget will depend on your individual situation. Read on for a look at what to expect when you compare these financing alternatives.
Table of Contents
Key Points
• Financing options for roof replacement include unsecured personal loans, secured home equity products, and contractor financing.
• Personal loans offer quick funding but may have higher interest rates than those for home-equity based lending.
• Home equity products require more time to obtain funds and also have closing costs.
• Contractor financing is convenient, sometimes offering 0% APR promotions, but can have high interest costs if not paid off promptly.
• Comparison shopping across all options is essential.
How Roof Financing Works
The average total cost of a new roof in 2026 is $9,530, according to the home improvement site Angi. But that amount could vary significantly, depending on where you live, the size of your home, the materials you choose, roof height and pitch, and if structural repairs are necessary. Your cost could range from an average low of $5,869 to an average high of $46,000.
Roof replacement financing allows you to pay for this pricey project over time instead of all at once. And shopping for the most competitive loan terms—by comparing interest rates, fees, monthly payments, etc.—can be an important part of keeping your overall costs in line.
If your roof is damaged due to weather, tree branches, or fire, your first stop should be your insurance company. In this case, your roofing project may be covered by insurance. But if your roof is old or has deteriorated due to normal wear and tear, one of these financing options may be in order.
Wondering about metal roof refinancing? The type of roof material is usually not an issue where financing is concerned, but you’ll want your new roof to meet local building codes as well as your home insurer’s requirements.
You’ll want to keep your timeline in mind as you explore financing, especially if your roof leaks or if your homeowners insurance company won’t renew your policy because your current roof no longer meets its requirements. If time is tight, some borrowing options are easier to apply for and can provide funding faster than others.
Top Roof Financing Options
Your best choice for new roof financing may depend on several factors, including your creditworthiness, how much you need to borrow, how much equity you have in your home, and how soon you want the work to start. Here’s a breakdown of some of the most common financing options:
1. Home Improvement Loans
Banks don’t really make roof loans, per se, but they do offer home improvement loans. A home improvement loan is a type of personal loan that’s used to pay for home repairs or renovations. These loans, which are offered by banks, credit unions, and online lenders, are typically unsecured, which means your house won’t be used as collateral. And most personal loans come with fixed monthly payments, which can make budgeting much easier.
Because they’re unsecured, personal loans for roof replacement tend to have higher interest rates than home equity loans and HELOCs. But there’s usually less paperwork involved, low or no fees, and funding can be much quicker. Applying for a personal loan online can take just a few minutes, and some lenders offer same-day approvals.
2. Roof Company Financing Plans
Roofing contractors sometimes partner with large financial institutions to offer financing to their customers. Their plans may entail applying for an installment loan or a credit card meant specifically for the roofing project.
Applying through a contractor can be convenient, so it may be worth checking out these financing offers once you settle on a reputable roofing company. But it’s important to be clear about the terms of your contractor’s roofing loan before moving forward.
If you have good credit, for example, a roofing company may offer you financing with a 0% interest rate for a preset promotional period (12 or 24 months, for example). But if you fail to pay off the full amount due by the end of that period, you can expect to pay a much higher rate on any amount you still owe — and you might even face retroactive interest charges.
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3. Home Equity Loans or HELOCs
If you’ve managed to build up some equity in your home, you may want to look into using a home equity loan (a fixed-rate loan that’s received as a lump-sum payment) or a home equity line of credit (HELOC) to finance your roof replacement. A HELOC is a revolving credit line that works much like a credit card.
Because these forms of financing are secured with your home as collateral, interest rates are generally lower than those for personal loans. This can be especially helpful for homeowners dealing with hefty roofing costs. Even better, the interest you pay on a home equity loan or HELOC may be tax deductible.
However, a home equity loan and a HELOC are both technically a second mortgage. This means approval can take longer than it would for other roof loan options. (There’s usually more paperwork involved, and your lender will likely require an appraisal to determine your home’s current value.) This could be a downside if you’re eager to get your project completed. Borrowers can also expect to pay closing costs and other fees with these types of loans.
There’s also the risk that if you default on your payments, the bank could seize your home to recover its losses. And if you sell your home, you’ll likely be expected to pay back any balance you still owe as soon as you close. That said, a home equity loan for roof replacement could be a good solution if you don’t need funds fast. And once you have a home equity loan, you can use the funds for any purpose if plans for your roof project change.
Recommended: Home Improvements That Increase Your Home’s Value
4. Government Programs and Incentives
While you’re researching the best roofing financing options, you also may want to check out government programs that could help. The Department of Housing and Urban Development (HUD), for example, offers a few loan and assistance programs for homeowners who are hoping to make repairs or improvements. Your eligibility for these programs may be based on your income, age, location, and the property you own.
• FHA Title I loans: These are loans backed by the Federal Housing Administration that can be used for home improvements, such as roofing. Loans up to $7,500 don’t require you to use your home as collateral.
• Energy-efficiency rebates or tax credits: A roofing project that includes insulation or air sealing might qualify for federal or state incentives if it helps better insulate the home.
• Local grants or low-interest loans: Look for city or state programs that help homeowners finance home repairs. These are often reserved for low-income borrowers.
• USDA rural development loans: The USDA offers low-interest loans for eligible homeowners in rural areas to make home repairs.
How to Qualify for Roof Financing
Borrowers with good credit scores, a stable income, and low debt can expect to receive the most favorable loan terms, no matter which type of roof replacement financing they choose. But some lenders also offer options for those with fair or even poor credit. Comparing multiple loan types and offers can help you find the best fit for your budget. Here are some steps to keep in mind as you consider how to finance a new roof:
• Ask for firm cost estimates. Knowing how much you’ll need to borrow can help you choose the right type of financing for your roof repair and make applying easier. If you’re dealing with storm damage, try to get an idea of how much of the expense your homeowners insurance policy will cover. Be sure to keep track of costs on your roofing project. Significant home improvements can help defray taxes when you sell your home.
• Know your budget limitations. Consider how your loan or HELOC payment would fit into your monthly budget and how it might affect your long-term goals. If you’re borrowing a large amount, for instance, you might need a longer repayment term.
• Shop for competitive rates and fees. A contractor loan provides one-stop convenience, but these loans often have higher interest rates. Fortunately, it doesn’t take long to hop online to see what various lenders have to offer: Comparing multiple loan options can help you find the best interest rates and other terms. And you can make note of any fees that could add to the overall cost of borrowing.
• Keep your timeline in mind. You can usually expect a faster approval and quicker funding through a home improvement loan or contractor financing than if you apply for a home equity loan or HELOC.
Which Roof Financing Option Is Best for You?
The new roof financing option that best suits your situation will depend on one or more of the following factors:
• You need a new roof fast. Consider a home improvement loan. Explore contractor financing if you feel you can pay off what you borrow relatively quickly.
• You have great credit and aren’t in a hurry. If you’ve built up some equity in your home through regular mortgage payments, a home equity loan or HELOC might be a good fit for you. The latter could be useful if the roof isn’t the only expense you foresee in the near future.
• You have a lower credit score or limited home equity. Consider an FHA Title 1 loan or explore other government-backed funding.
The Takeaway
Fixing a roof can be an intimidating and unexpected expense. And if the work has to be done quickly, you might not have the means or desire to cover the cost out of pocket. Many homeowners choose to finance their project instead, often with a home improvement loan or a second mortgage that allows them to repay the cost over several months or years. The right choice for your roof replacement loan will depend on your credit score, the overall cost of your project, and other factors.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
FAQ
Can I finance a roof with bad credit?
Lenders typically offer the most competitive financing terms to borrowers with good or excellent credit. But if you shop around, you’ll likely find some lenders who are willing to accept lower credit scores, and you can compare their interest rates and other terms. You can also explore a government-backed FHA loan.
Do roofing companies offer payment plans?
Roofing companies often partner with financial institutions to offer financing for roof repair and replacement. These plans, although convenient, can come with higher interest rates than what you might obtain with a home improvement loan, so it can be a good idea to compare them to other financing options before moving forward.
What is the average monthly payment for a new roof loan?
The monthly payment for a new roof can vary significantly based on the overall cost of the roof and the terms of the financing you choose (the interest rate and repayment term being two important factors). If you borrowed $10,000 at a fixed personal loan APR of 7.74%, your monthly payment over a 10-year term would be around $120.
How long can you finance a roof for?
Depending on how much you borrow and the type of financing you choose, your loan term could last anywhere from a few months to 10 years or more.
Is roof replacement covered by homeowners insurance?
If your roof repair or replacement is the result of damage caused by something your homeowners policy covers, you can expect your insurer to help pay for the roof repair or replacement. The actual amount of your payout could depend on the roof’s age, your deductible, and the extent of the damage.
Photo credit: iStock/yacobchuk
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