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PayPal Pay Monthly lets you split kitchen appliance costs into manageable payments over 3, 6, 12, or 24 months—and now it works in-store with Apple Pay or Google Pay. Other ways to pay include home equity loans, personal loans, credit cards with 0% APR offers, cash savings, or contractor financing. The right option depends on your kitchen remodel cost, budget, and timeline.
A kitchen remodel can refresh your space and increase your home’s value. Focusing on appliances instead of a full tear-out is an affordable way to get a fresh look and improved function. But even this smaller upgrade can be a significant investment.
The good news is you have more options than ever to spread out costs without draining your savings. From PayPal Buy Now, Pay Later options to credit cards and various loans, there’s a financing method for nearly every budget and project size.
This guide helps you understand how to pay for a new kitchen and which choices work for your situation.
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Ideal for: Large in-store appliance purchases and a simple, predictable monthly payments
PayPal offers a Buy Now, Pay Later option called Pay Monthly1 that can be used in store. This payment option lets you split large in-store appliance costs into manageable payments over 3, 6, 12, or 24 months. If approved, you can pay using your phone’s digital wallet with Apple Pay or Google Pay. It’s a flexible way to bring home new appliances right away and spread payments over time.
To use Pay Monthly in store, you'll first apply for financing in the PayPal app. If approved, add the single-use virtual card to your digital wallet. You can then tap to pay in store. A soft credit check may be required as part of the application process.
This option can help you ease the burden of substantial appliance costs, which can reach several thousand dollars for a full suite of new units.
How it works: Say you want to buy a refrigerator from your local appliance retailer. The price is $2,400 and you'd like to split the cost into monthly payments, paying it off over 12 months. You can apply for a Pay Monthly loan in store, and once approved, you can buy the refrigerator locally with your mobile wallet, with the cost divided into 12 fixed monthly payments. You’ll know exactly how much you owe each month and when your loan will be paid off, fitting into your personal budget.
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Ideal for: Homeowners needing a fixed-rate lump sum
A home equity loan, which acts as a second mortgage, lets you borrow a lump sum of cash secured by the equity in your home. This financing method is common for a large, one-time expense like a major kitchen renovation.
Because your home serves as collateral, the interest rate is usually fixed and lower than unsecured options. You make a consistent monthly payment over a fixed repayment term, which can simplify budgeting for your kitchen renovation loan.
Lenders typically restrict the amount you can borrow with a home equity loan, usually capping the loan at a certain percentage of your available home equity. While a few lenders may allow you to borrow slightly more, you should expect this limit.
How it works: Let's say your home is valued at $400,000, and you owe $200,000 on your first mortgage. With 50% equity, a lender may let you borrow up to 80% of the home's value, or $320,000. You could borrow $40,000 for your average kitchen remodel cost while maintaining a safe equity cushion.
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Ideal for: Mid-size kitchen remodels
A personal loan is an unsecured installment loan that provides funds you can use for almost any purpose, including buying new appliances. You apply to a bank or an online lender, who reviews your income, credit history, and debt-to-income (DTI) ratio. If approved, they deposit the funds directly to you.
This allows you to pay for your new kitchen appliances upfront and repay the lender over a set period with fixed monthly payments. Since this loan is not secured by your home, the interest rate may be higher than that of a home equity loan.
How it works: If you finance a $5,000 appliance package, you could secure a five-year loan at an 11% interest rate. You receive the funds to purchase the items immediately. The loan mechanism means your total repayment would be about $6,440 over the five years, with $1,440 going toward interest.
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Ideal for: Lowering your mortgage rate while borrowing a large sum
A cash-out refinance replaces your current mortgage with a new, larger one, allowing you to take the difference in cash. This is suitable for major renovations and covering the full kitchen remodel cost, not just a single appliance.
Most lenders require you to keep at least 20% equity in your home, limiting your loan-to-value (LTV) ratio to 80%.2 While this option can offer a lower interest rate than a personal loan, you must factor in new closing costs and the potential for a longer repayment period.
How it works: If your home is worth $450,000 and you owe $200,000 on your mortgage, you could refinance to a $280,000 loan. The new loan pays off your existing balance, and you’d get about $80,000 in cash after closing costs. You can use that money toward your kitchen remodel.
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Ideal for: Small appliance purchases
You can use a debit or credit card to pay for new appliances, especially for a low-cost kitchen remodel that only involves one or two units. Using a credit card, especially one with a 0% introductory annual percentage rate (APR) offer, can act as short-term, interest-free financing. You must pay the balance in full before the promotional period ends to avoid high interest charges.
How it works: Say you buy a $900 dishwasher with a credit card that offers 0% interest for 15 months. Divide $900 by 15 to get a set monthly payment of $60. Paying that amount each month ensures you clear the balance before interest kicks in.
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Ideal for: Phased renovations with uncertain total costs
A home equity line of credit (HELOC) is a revolving credit line secured by your home equity. It works like a flexible credit card where you borrow what you need and pay interest only on that amount. This option can be useful if you are replacing appliances in phases and need to draw funds at different times.
HELOCs often have variable interest rates, meaning your monthly payments can change. Because your home is used as collateral, it's important to borrow responsibly. Some lenders may allow you to convert part of the balance to a fixed-rate loan for larger purchases like new appliances.
It's also important to note that lenders usually prefer that homeowners keep at least 20% equity in their home and borrow no more than 80% of its value.2 And while a higher credit score can help you qualify for better terms, each lender has its own approval process and there is no single cutoff score.
How it works: Say you’re approved for a $50,000 line of credit. You use $4,000 right away to buy new kitchen appliances. You’ll only pay interest on the $4,000 you borrow, while the remaining $46,000 stays available for future projects, like updating your cabinets.
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Ideal for: Energy-efficient upgrades or low-to-moderate-income households
You can reduce the effective cost of a kitchen remodel and new appliance purchases by exploring federal programs, rebates, and tax credits. These programs provide financial help for making energy-efficient upgrades to your home:
How it works: A tax credit helps reduce what you owe in taxes. For example, buying an ENERGY STAR-rated heat pump water heater for $2,000 may qualify you for the Energy Efficient Home Improvement Credit. That credit could save you $600, or 30% of the cost, when you file your federal taxes.
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Ideal for: Avoiding debt and interest charges
Paying for your new appliances or the full kitchen renovation cost with cash savings is a financially secure approach. This method eliminates all interest charges, loan fees, and the risk of taking on new debt.
This option requires planning, budgeting, and disciplined saving to avoid depleting your emergency fund. Some retailers may offer an additional discount or rebate for an outright cash payment, further reducing the cost of a kitchen remodel.
How it works: For example, saving $200 per month for 25 months can help you reach a $5,000 goal for your appliance package. By paying $5,000 in cash, you avoid the $1,440 in interest you would pay on a typical personal loan.
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Ideal for: Bundling installation costs or securing a store-specific deal
Appliance retailers often partner with financial companies to offer special promotional financing, such as a 0% introductory APR on kitchen appliance sales. Contractors may also offer financing through a third-party lender, which is convenient for bundling the appliance cost and installation into one loan.
Be cautious of deferred interest offers, as they differ from other no-interest loans. If you don't pay off the balance entirely before the promotional period ends, lenders can charge interest on the original purchase amount. Always check the high interest rate that applies after the promotion expires.
How it works: Promotional financing lets you delay interest for a set time, usually 6 to 12 months. Say you buy a $2,500 range with a 12-month, 0% interest offer and make monthly payments. If you don’t pay off the full $2,500 by the end of the 12 months, even if only $1 remains, you’ll owe interest on the entire purchase amount, not just the leftover balance.
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Ideal for: Buying or refinancing a home that needs to be renovated
Renovation-specific loans combine the cost of purchasing a home or refinancing an existing one with the cost of major renovations. These loans can finance appliances that are considered permanent fixtures of the home, such as a built-in oven, range, or dishwasher. These options are secured, meaning your home is collateral, but they allow you to finance the entire cost of a kitchen remodel into a single, long-term mortgage.
Types of renovation-specific loans include:
How it works: This option combines your home purchase and renovation costs into one loan. The lender estimates your home’s value after the renovation to decide how much you can borrow. The renovation funds, including money for appliances, go into an escrow account and are released to your contractor in stages as work is done. You’ll make just one mortgage payment each month.
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Ideal for: Fast access to funds as a last resort
A 401(k) loan lets you borrow from your vested retirement savings, up to 50% of the balance or $50,000.4 The process is fast and does not require a credit check, making it a quick way to handle how to pay for a kitchen remodel or new appliances. You repay the interest to your own account, usually via payroll deductions over a five-year term.
However, this option removes money from the market, causing you to miss out on potential investment growth, which can significantly impact your long-term wealth management plan.
How it works: You request the loan through your plan administrator, and the funds come out of your 401(k) balance. You then repay the amount, with interest, through automatic payments over about five years.
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Understanding how to finance your project is only one part of the equation. Before signing any contract or loan agreement, consider these key factors to ensure you make a financially sound decision:
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Finding the best way to finance a kitchen remodel means choosing the right tool for your situation. You can help to simplify the process by asking yourself a few key questions:
When you are ready to start shopping for your new refrigerator or range, it's important to have a plan. The smart choice gives you the appliances you need to finish the job while keeping your payments manageable.
One simple option is to de-stress your big-ticket purchases with PayPal. PayPal Buy Now, Pay Later options can help you manage kitchen renovation costs by giving you the flexibility to spread payments out over time.
Learn more about how you can pay later in store with Pay Monthly on your next appliance purchase.1
It's your do-it-all digital wallet. Load up on cash back offers before you shop. Track your packages. And manage it all on the go.