When I met my now-husband, his house didnâ€™t have a garage. I quickly learned the downsides to this: bird droppings all over the car in the summer, clearing snow in the winter, no place to store your stuff, and the dread of needing something from the car in the rain. If weâ€™d planned to stay in that house, building a garage would have been a big priority, as it is for many homeowners.
If youâ€™re one of those homeowners, the convenience a garage provides may seem priceless. But you still should make a smart plan to finance a garage addition or upgrade.
This could mean garage loans, but borrowing has some big disadvantages. Letâ€™s look at the different ways of paying â€” and evaluate the pros and cons of each â€” so that you can make a smart choice.
A new garage comes at a big cost. HomeAdvisor indicates the national average is $26,092, although prices vary depending on the size, whether you add amenities such as electricity or heating, and whether itâ€™s attached or detached.
To cover these costs, here are your main options.
The best way to finance most home improvement projects is to pay out of pocket. The benefits of paying for a garage with savings include:
Of course, there are some downsides as well, including:
To save enough to do the project ASAP, create a budget that prioritizes saving for your garage project and other important goals.
Some lenders offer dedicated garage loans, and some builders or suppliers also offer financing. The benefits include:
But for most homeowners, the disadvantages of garage loans significantly outweigh the advantages. Some downsides include:
Given these drawbacks â€” and the interest costs in particular â€” itâ€™s generally not a good idea to take out a loan to add or upgrade a garage unless thereâ€™s a pressing safety issue.
But if youâ€™re considering garage loans anyway, explore options and talk with the garage builder or companies supplying materials to evaluate loan terms, the qualifying process, and total cost.
Personal loans can be used for any purpose, including construction or remodeling of a garage. The benefits include:
The downsides of using personal loans to fund your garage project also need to be considered. These include:
Personal loans, like garage loans, typically have bigger cons than pros. If you do decide to go forward, make sure to compare offers among multiple lenders. Our list of the best home improvement loans is a good starting point.
Home equity loans are available to those who own a sizable portion of their home compared to what they owe on their mortgage, and these loans can be used to fund a garage remodel. Some advantages include:
But the disadvantages are substantial and include:
The downsides make home equity loans a bad choice for many homeowners. And, as with the other loans, finding the best offer is important if you decide to borrow.
Taking a loan for a garage project usually doesnâ€™t make financial sense, especially as home improvement website Fixr estimates the return on investment for a garage addition at only about 81% of what you spend. Paying interest only adds to the cost of your project.
If you need a garage now, borrow responsibly by keeping the total cost of the project as low as possible and shopping carefully for the best financing.
Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount||Â|
|1 Includes AutoPay discount. .
2 Includes AutoPay discount. .
|7.73% â€“ 29.99%||$1,000 – $50,000||Visit Upstart|
|5.81% â€“ 15.37%1||$5,000 – $100,000||Visit SoFi|
|6.87% â€“ 35.97%*||$1,000 – $50,000||Visit Upgrade|
|8.00% â€“ 25.00%2||$5,000 – $35,000||Visit Payoff|
|4.99% â€“ 29.99%3||$10,000 – $35,000||Visit FreedomPlus|
|5.99% â€“ 18.99%4||$5,000 – $50,000||Visit Citizens|
|15.49% â€“ 34.49%5||$2,000 – $25,000||Visit LendingPoint|
|6.16% â€“ 35.89%6||$1,000 – $40,000||Visit LendingClub|
|6.99% â€“ 18.24%7||$5,000 – $75,000||Visit Earnest|
|9.95% â€“ 35.99%8||$2,000 – $35,000||Visit Avant|