Upgrading and renovating your home costs money, and depending on the type of home improvement project, it can cost a lot of money. However, what if that money isn’t there right now and a new roof just doesn’t fit into your budget? That’s where home improvement financing and loans come into play, even if you generally prefer to avoid them.If you don’t have all the money that you need for your home improvement project, there are ways to borrow it, including a home equity loan, credit line, second mortgage, home improvement loans and short-term credit card solutions.Most people who want to finance a home improvement project apply to their bank for a home equity loan. Like a mortgage, a home equity loan uses your house as collateral for the loan which is often based on the projected value of the house after the renovations are completed. How much you can borrow will also depend on how much of your first mortgage you have remaining.Your interest rate for a home equity loan will depend on your credit score, your lender, the value of your equity and the going or prime interest rate. Often for home equity loans that are targeted specifically toward home improvement projects, your lender will ask to see a full plan of your home improvement project along with a budget and estimated timeline. This way, the lender can not only gauge the value of the property after the renovations, but also get a clear grasp of the required budget. Remember, when making your budget, always add a 10-20% buffer to allow for delays, weather problems or unexpectedly higher supply costs.Another option for smaller projects is a line of credit. A line of credit allows you to only borrow what you need and only pay interest on what you use. For example, if you get a line of credit for $25,000, but only spend $15,000 to renovate your kitchen, then you’ll only need to make payments on that $15,000. With a solid credit rating, a credit line usually offers great interest rates too.For short-term and small financing needs, many couples use credit cards. And when planning a smaller project or a quick-fix like a refrigerator that needs to be replaced promptly, credit cards can work adequately. However, the interest rates are normally much higher and should only be seen as a short-term solution rather than a means of long-term financing.