4 Roofing Finance Problems Homeowners Face (And How to Avoid Them)

Is financing a roof always simple? Getting a new roof is one of the biggest investments you’ll make in your home, and for many people in Indiana, paying for it up front just isn’t an option. This is why they turn to financing.

At Hoel Roofing, we’ve worked with hundreds of homeowners for over eight years. We have seen firsthand how roofing costs can catch people off guard and how financing, while helpful, can also come with its own set of headaches. We’ve seen what causes the most stress, confusion, and costly mistakes.

It’s why we’ve put together this article that breaks down four of the most common roof financing problems homeowners face in Central Indiana, and most importantly, how to avoid them.

Not Qualifying For Financing Due to Debt-to-Income Ratio or Credit Score

Many homeowners don’t realize they might not qualify for roofing financing, or they assume a low credit score won’t matter for a small loan. Unfortunately, lenders often reject applications for two major reasons:

• High debt-to-income ratio (DTI) – meaning you’re already carrying a lot of debt relative to your income. A DTI ratio of below 36% is generally considered good, 36-43% is acceptable, 43-50% is considered high, and a DTI above 50% is very high. Individuals with this DTI are generally considered to be overextended.
• Poor or limited credit history – credit scores below 580 are considered poor, and scores between 580 and 669 are considered fair. If you have no credit, you are generally considered to have limited credit, as you have no established borrowing history, which increases the risk.

In our experience, these are the top two reasons people get denied.

How to avoid it:

• Check your credit score and know your DTI before applying. A DTI of 36% and a credit score above 680 is generally considered good.
• Consider financing through your contractor. This provides more flexibility for unexpected situations on the job.
• If your score needs work, explore secured loans backed by home equity or co-signers.

Confusion About Loan Types (Secured, Unsecured, Same-As-Cash)

Roof financing terms can sometimes feel difficult to understand. This oftentimes causes many homeowners to sign without fully understanding the risks and end up surprised by ballooning payments.

Here’s a quick breakdown of loan types:

Secured Loans

These loans are backed by collateral, usually your home. Because the lender has security, interest rates tend to be lower, and loan amounts can be higher.

Pros

• Lower interest rates
• Longer repayment terms
• Potentially higher loan limits.

Cons

• If you default, the lender can place a lien on your home.
• This option involves more paperwork and typically a longer approval timeline.

Unsecured Loans

These loans don’t require any collateral. Approval is based on your credit score and income, making it a faster and simpler option.

Pros

• No risk to your home
• Quick approvals
• No home equity required.

Cons

• Interest rates are generally higher
• Loan amounts may be smaller than secured options.

Same-As-Cash Financing

This is a promotional offer where you pay no interest as long as the full amount is paid off within a specific period, typically 6 to 12 months.

Pros

Great short-term option if you have cash coming soon (like a tax return or bonus).

Cons

If you don’t pay it off within the promo window, you’ll owe all the interest retroactively, which can add up quickly.

How to avoid it:

• Ask your contractor (or lender) to explain loan terms in plain English, and don’t be afraid to take your time.
• Read the fine print: What happens if you miss a payment? What’s the penalty if you go past the no-interest period?
• Choose a roofing company that helps match you with the right financing option, not just the fastest approval.    Getting the Runaround From Too Many Middlemen

Getting the Runaround From Too Many Middlemen

Many roofing companies hand over financing entirely to third-party lenders and discontinue involvement. If something changes, such as an increase in job scope or a question about the terms, you’re left calling a bank hotline or being bounced between departments.

How to avoid it:

• Choosing the Right Contractor: Choose a roofing contractor that offers comprehensive start-to-finish support during the financing process. This can help you avoid confusion and ensure a smooth financing experience.
• Ask upfront: If I need to change my loan during the project, who should I contact for assistance? If the answer is even more middlemen, that’s an arrangement you want to avoid.
• Avoid financing plans that require you to personally coordinate with multiple companies.

High Interest Rates That Add Up Quickly

Some roofing loans come with sky-high interest rates, particularly unsecured personal loans that have low credit requirements. A $12,000 roof could end up costing $17,000 or more over time if you’re not careful.

How to avoid it:

• Know your credit score ahead of time. Lenders use your credit score to determine how risky it is to lend you money. The higher your score, the lower your interest rate is likely to be. For example, on a $15,000 roof loan, the difference between 6% and 18% could mean paying thousands more in interest over time.
  • Excellent credit (740+): You may qualify for 0% intro offers or rates as low as 4%-6%
  • Fair credit (580-669): You may face rates of 10%-18%
  • Poor credit (<580): You may still qualify, but expect rates over 20% or stricter terms
• Shop around for interest rates before signing.
• Avoid deferred interest offers unless you’re 100% sure you can pay within the promo period.
• Always ask the lender for the total repayment amount, not just the monthly payment.

Roof Financing Frequently Asked Questions

Can I finance a roof with bad credit?

Yes, you still have options. Some lenders specialize in personal loans for home repairs, often approving loans even with lower credit scores, albeit at higher interest rates. Additionally, working with contractors who partner with such lenders can streamline the process. Terms vary, but it’s worth exploring for urgent roof replacements.

Can I finance a roof with bad credit and no credit check?

Options exist, but they’re limited. Specialty retailers may offer no-credit-check financing, but these often come with high fees and strict repayment terms.

What are the best ways to fund a new roof?

Primary funding options include:

• Home equity loans/HELOCs: Lower rates, but use your home as collateral
• Unsecured personal loans: Faster and simpler, no collateral needed
• Same-as-cash offers: 0% if full payment is made on time
• Credit cards with 0% intro APR: Useful for making quick payments, but be aware of high renewal rates.
• Government programs/grants: USDA 504, Indiana CDBG, etc.

What is the best way to finance a new roof?

If you can repay quickly, a same-as-cash or low-interest unsecured loan often works best, as it is fast, affordable, and flexible. If you prefer lower monthly payments and can utilize home equity, a HELOC or home equity loan may be a more suitable long-term choice.

How do I pay for a roof with no money up front?

Many lenders offer $0 down programs with standard or promotional financing. Contractors sometimes cover upfront costs while you sign the financing agreement at installation. If you’re facing an emergency, reach out to them as some lenders offer deferred or delayed payment.

What grants are available to fund a roof?

Eligible homeowners in East Central Indiana may access:

• Indiana Owner-Occupied Rehabilitation (CDBG):
  Local governments grant funds to low- to moderate-income homeowners, including funds for roof repairs. Next round deadline: Aug 15, 2025 GrantExec+2Government of India+2indianahouserepublicans.com+2

• USDA Section 504 Home Repair Loans & Grants: Loans are available to very-low-income homeowners for home repair, improvement, or modernization. The maximum loan is $40,000 & minimum loan is $10,000. Grants are available to elderly, very-low-income homeowners for the removal of health and safety hazards.

What Roofing Contractors Offer Payment Plans In East Central Indiana?

You should consult with a contractor to explore their financing options and determine which one might be best for your home and finances. If you’re unsure who to contact, here’s a list of the top roofing contractors in East Central Indiana that offer payment plans. 

If you’re feeling overwhelmed by roofing costs, you’re not alone. The good news? You don’t have to pay for everything up front. Many roofing companies in East Central Indiana offer flexible payment plans designed to fit a variety of budgets and credit situations. But not all financing is the same. It’s important to talk with a contractor about:

• What financing options they offer (in-house or third-party)
• Interest rates, fees, and repayment terms
• Whether you qualify based on credit, income, or down payment

To make things easier, we’ve already done the homework for you. Check out our full article on roofing contractors in East Central Indiana that offer payment plans, so you can compare your options, ask smarter questions, and move forward with confidence.