There are a lot of different ways to improve your home and there are almost as many different ways to get home improvement financing to pay for those improvements. But just as you wouldn’t use a sledgehammer to put in a tack nail, there are different types of financing that are made for different types of home improvement projects.

There are a couple different factors that you should consider when first considering applying for some sort of home improvement loan or financing. First, you should consider the size of the project and how much it will ultimately cost. Second, you should consider the time frame you’ve set aside to pay off the home improvement loan and interest associated with the borrowed money. Third, you should consider your ultimate goal you want to accomplish with your home improvement.

Here are three common sources of home improvement financing and how they should be used:

Home Improvement Credit Card - These credit cards are given out by large home improvement stores who want to make money by financing your projects and having you buy products from them at the same time. Typical projects include things like replacing kitchen cabinets, upgrading appliances, building a deck, buying tools for a workshop or other things which you may be able to do on your own. Using store credit cards for home improvement financing is best for less expensive projects that you think you’ll be able to pay off quickly. They are easy to get, but they sometimes have a higher interest rate that other types of home improvement financing.

Home Equity Loan for Home Improvement - A home equity loan allows you to receive a set amount of money which is given to you all at once based on the amount of equity or extra value you have in your home. These are better for mid-sized projects like refinishing floors, upgrading electricity or even remodeling a bathroom. They are typically used for home improvement projects in which you have to hire experts. A home equity loan is a slightly more difficult type of home improvement financing to secure but the interest rate can be fixed and lower than a home improvement credit card. Using a home equity loan as form of home improvement financing may allow the interest you pay on the loan to be deducted on your income taxes.

Home Equity Line of Credit (HELOC) - Sometimes a little more work than a home equity loan to get, a home equity line of credit allows you to write checks and charge against the amount of equity in your home. This can be a fixed or variable rate and it’s best for larger projects where you may not even know the cost of the home improvement project. A home equity line of credit is the perfect home improvement financing vehicle for upgrading your furnace or central air conditioner, installing a pool, remodeling a kitchen or adding an addition if you have enough equity. Like a home equity loan the interest you pay on form of home improvement financing may be tax deductible and can be paid over a longer period of time.

Finally, you need to consider what you hope to accomplish with your home improvement project. If you are hoping to improve your home and increase its value so that you can turn around and sell it then you may want to stick with the home improvement credit card for financing your home improvement projects, especially if it has a low or zero percent interest rate for a short period of time. If you don’t plan on moving and simply want to improve your home for your own benefit then you might want to consider one of the other types of home improvement financing.

Whatever you do, remember to do your research and plan ahead before moving forward with one of the many different types of home improvement financing options available.