Brown three-car garage doors in suburb home.

Garage Financing And Loan Options

Victoria Araj4-Minute Read
UPDATED: May 24, 2023


Adding a garage to your property might be one of the best home improvement projects you can pursue in terms of its impact on your daily life. A garage can provide extra storage, a staging space for outdoor projects and a secure and reliable parking spot that keeps your vehicle safe from weather damage, saving you the time and effort of keeping up with snow, pollen or whatever else nature might deposit on your car.

But while the convenience and versatility of a garage are undeniable, it can come with a significant price tag. The good news is that plenty of garage financing options are available to break down your costs and make your home improvement goals attainable.

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How To Finance A Garage Build

While you may be able to find dedicated “garage loans,” your financing options for a garage, carport or other detached structure are similar to your loan options for other home improvement projects.

Here’s a list of home improvement loans for financing a garage, whether you’re updating your existing garage or building a new one.

Personal Loans

Personal loans can be an ideal financing option for building or remodeling a garage. They offer a quick turnaround, are unsecured (for example, no collateral) and don’t factor in your credit score as heavily as other loan options. Even if your credit score is on the lower side right now, you might still be able to get a personal loan if you can accept a higher interest rate.

Personal loan amounts tend to range from $1,000 – $50,000, depending on your lender and qualifications.

Home Equity Loans

Home equity loans aren’t quite as simple as personal loans. For one, you’ll need a credit score of 680 or higher and at least 20% equity in your home to qualify. These requirements mean it could take longer to qualify, plus you’ll be using your house as collateral – meaning you could lose your home if you miss or are late on monthly payments – and might have to pay higher fees and closing costs than you would with other loan options.


A home equity line of credit (HELOC) can be used for various purchases, including garage financing. Like home equity loans, HELOCs are dependent on the equity you have in your home, so you’ll need to have enough built up to finance a significant construction project. As with a home equity loan, your house acts as the collateral and could be repossessed by your lender if you’re late on your monthly payments.

Cash-Out Refinances

A cash-out refinance can also convert your home’s equity into cash, which can then act as a loan to build a garage. You’ll also be replacing your existing mortgage with a new mortgage, so there’s potential for you to secure a lower interest rate. Unlike most home improvement financing options, a cash-out refinance involves going through the mortgage application process again and facing all the fees and credit checks that come with that, plus closing costs. 

203(K) Loan

A 203(K) is a renovation loan offered by the Federal Housing Administration (FHA) for home improvement projects. It covers a wide variety of renovations, including garage builds.

To qualify, your garage project needs to meet FHA health and safety regulations and match comparable properties in your area. Alternatively, garage-like buildings aren’t covered by this loan, so your project must look and act like a traditional garage structure to get approved.

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Alternative Garage Loan Options

If a loan doesn’t feel like the right garage financing method for you, cash and credit cards are an option.

Paying By Cash

Unless you have the cash readily on hand, saving for a project of this size may take a significant amount of time, and paying upfront might drain your account and make it difficult to keep up with other payments. But, if you have a strong financial plan in place, purchasing in cash can be a good option to avoid paying interest. In many cases, though, having enough cash on hand for fully financing a garage build might not be feasible.

Paying By Credit

Credit cards are another option if you want to move forward with your garage project now and pay later. Just remember you might pay more interest on your card than on a personal loan, and the latter tends to be better for major purchases.

Since you’ll likely be borrowing a big chunk of change to finance your new garage build, you might end up paying more than you can afford with a card and find yourself with overwhelming credit card debt.

How Much Your Garage Build May Cost

If you’re considering your financing options, estimating the actual cost of the project should be one of your top priorities. Depending on the type of structure you want to build, your costs for a garage build can vary significantly. You’ll need to do a bit of research to figure out the right balance of how much garage you need and how much you can afford. Keep in ind the price ranges provided below are accurate as of May 2023.


A carport is a detached, open-walled structure that provides a sheltered parking space for your vehicle. Since it’s free-standing and doesn’t include walls, a carport is one of the more affordable garage-type options on the market.

HomeAdvisor puts the average cost of a carport between $3,000 and $10,000.

Attached And Detached Garages

While detached garages might cost less than an attached garage, both are significant construction projects, especially if you’d like your new garage to include a living space like an apartment or in-law suite.

While HomeAdvisor estimates the average cost of a garage project between $16,000 and $41,000, a number of factors such as the combination of materials, size and special features can have a huge impact on how much you’ll pay.

Storage Shed

A shed can’t house a car, but if you’re interested in some of a garage’s other benefits like storage and extra workspace, a shed is a great option. Sheds are some of the cheapest detached structures – estimated between $1,500 and $10,000 by HomeAdvisor – and they’re highly customizable. While many people use sheds to simply store tools and set up workbenches, others turn them into home offices and personal retreats.

Garage Doors

Replacing just your garage doors is much more affordable than building a new structure, but depending on the material you choose, the cost can still add up significantly, averaging about $700 – $2,000, according to Fixr.

Steel doors are the least expensive option, starting at $450, and they’re often a popular choice. If you’re looking for a more polished look, you can also find vinyl, aluminum, composite, fiberglass and wood doors. Each of these can cost hundreds more than the steel option, so if you’re considering a double wooden door replacement, you could still end up needing a fair amount of financing.

Installation Costs

Hiring a contractor for your garage build? Try asking multiple construction professionals for cost estimates. This can help you find the best deal while also giving you a better idea of the price range for your project – and knowing that range will make it easier for you to pick your best financing option.

Permit Fees

Finally, it’s important to note that cities and towns often require permits for new construction or major renovations. Check your local government’s rules and regulations to see whether your project needs a permit and remember to factor in this fee when calculating your overall estimate. Permit fees vary wildly depending on where you live.

A small town might ask only a few hundred dollars, while a city might require thousands of dollars to secure a permit – and the size of your garage will also increase these fees.

Final Thoughts: Finance Your Garage Build Today

A garage is one of the most versatile additions you can make to your house. If you know what kind of garage or detached structure you’re looking for but don’t have the cash on hand, you have a number of garage financing options available. These include personal loans, home equity loans and cash-out refinancing.

To see what personal loan rates you prequalify for, start an application with Rocket Loans℠ today!

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Victoria Araj

Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.