Home Equity Loan or Line of Credit
A home equity loan or a home equity line of credit (HELOC) can be used to finance your project using equity in your house. The basic difference is the loan is a one-time lump sum. Usually with a fixed interest rate. Alternatively, HELOC is a line of reusable line of credit with an adjustable interest rate. In all, interest rates are lower than other types of loans because they are secured by the home.
Personal or Home Improvement Loan
Home improvement loans are unsecured. In other words, your property or assets will not be used as collateral. Consequently, the interest rates tend to be higher than home equity loans. These loans are sometimes called a “home improvement loan.” They are available at banks, credit unions or other lending institutions.
There are lending products designed specifically for energy efficiency and renewable energy projects. Specifically, in 2018 the Colorado Energy Office sponsored The Residential Energy Upgrade Loan (RENU). This low-interest loan to helps Coloradans invest in energy upgrades. RENU contractors work locally and that means finding funding is easy.