Don’t Overpay: What Every Homeowner Should Know About Home Improvement Loans

Home Improvement Loan

Thinking about upgrading your home? Maybe you want to fix that leaky roof, install energy-efficient windows, or finally get the new AC system your house desperately needs. No matter the project, a home improvement loan can be a great way to spread out the cost and get the work done now instead of waiting.

But here’s something most homeowners don’t know: not all home improvement loans are created equal.

In fact, many homeowners end up paying more than they should—not because of the contractor, but because of the way the project is financed.

Let’s break it down so you can make the best choice for your home and your wallet.

 

What Is a Home Improvement Loan?

A home improvement loan is money you borrow to make repairs or upgrades to your home. These loans help you pay for projects like:

  • Roof replacement
  • HVAC systems
  • Solar panels
  • Energy-efficient insulation
  • Accessibility upgrades (like ramps or walk-in showers)

You borrow the money, pay your contractor, and then repay the loan over time—usually with interest. Sounds simple, right?

Well… not always.

 

The Hidden Cost of Dealer Fees

Here’s where things can get tricky. Many contractors offer financing through third-party lenders. It sounds convenient—you get a quote and a loan in the same conversation.

But what they don’t always tell you is that some of these lenders charge large dealer fees—extra costs that get added to your total loan amount.

These fees don’t go toward your home or your project. They’re just added profit for the finance company. And in many cases, you end up paying as much as 20% to 40% more than if you paid in cash.

Even worse, these fees are often rolled into the loan. That means you may not even realize you’re paying them.

 

How to Protect Yourself: Ask for Two PricesHome Improvement Loan AZ

So, how do you make sure you’re not overpaying for home improvement loans?

It’s simple. Ask your contractor for two prices:

  1. Cash price – What the job would cost if you paid up front, with no financing.
  1. Financed price – What the job costs if you go through their lender.

If there’s a big difference between the two, that’s a red flag. It probably means the lender is charging a dealer fee—and you’re footing the bill.

Some contractors are upfront about this. Others may not even know the full details of what their finance partners charge. That’s why asking for both prices is so important. It gives you the power to make an informed choice.

 

SHILA: A Better Way to Finance Home Improvements

At Sustainable Home Improvement Loans of Arizona (SHILA), we believe in fair, transparent, and affordable home improvement loans.

We don’t charge large dealer fees—ever. We charge a small 5.49% project management charge and we tell you this up front. No hidden fees, no upselling, no surprises.

Even better, our loans are designed to help more Arizona homeowners qualify. With SHILA:

  • There’s no minimum credit score
  • You don’t need home equity
  • We offer low, fixed rates with simple terms

Whether you’re replacing an old air conditioning unit or installing solar panels, SHILA gives you the power to choose the best contractor—not just the one with the slickest financing.

 

Why This Matters More Than Ever

With Arizona’s hot summers and aging housing stock, more and more homeowners are turning to home improvement loans to stay safe, cool, and energy-efficient.

But as demand grows, so do the risks of choosing the wrong financing. That’s why it’s so important to slow down, ask questions, and understand what you’re agreeing to.

Choosing a loan with hidden fees could cost you thousands over the life of the loan. But choosing the right loan—one that’s affordable and transparent—can make all the difference.

 

Final Tips for Homeowners

Before you sign off on any home improvement loan, remember these key steps:

  • Ask for the cash price and financed price—and compare them
  • Read the loan terms carefully—look for any added fees or costs
  • Get a second opinion—you can always apply through SHILA or another trusted source
  • Choose a contractor who supports fair financing—they should be on your side, not the lender’s

Your home is one of your biggest investments. Don’t let hidden fees take away from the value of your upgrades.

 

Interested in a better home improvement loan?

Visit shilaaz.org or talk to your contractor about using SHILA for your next project. You’ll get fair rates, no dealer fees, and a financing partner that puts Arizona homeowners first.