Which type of loan provides financing for home improvements?

The type of loan that specifically provides financing for home improvements is commonly referred to as a home improvement loan. This type of financing is tailored to assist homeowners in funding renovations, repairs, or upgrades to their existing properties. Home improvement loans typically have features designed to accommodate the unique financial needs stemming from home renovation projects, such as flexible terms and the ability to finance projects with varying costs.

While other options like a home equity loan can also be used for home improvements, they are primarily secured by the equity in the home rather than specifically designated for renovations. A fixed-rate mortgage is intended for purchasing a home rather than financing renovations. Similarly, short-term loans may be utilized for various purposes but do not specifically focus on the financing of home improvements. Therefore, the home improvement loan is the most appropriate answer for financing home renovations directly.