Your Complete Guide to Home Improvement Loans | US Loan Applications
Interested in remodeling your kitchen? Ready to make an extension? Or have you inherited a home you want to renovate? Whatever your reason, a home improvement loan is often the perfect way to get financing for your remodel. But what are they, what can you use them for, and what should you be aware of before applying? Read on for everything you need to know about home improvement loans.
What is a home improvement loan?
A home improvement loan is a personal loan you take out so you can make home improvements. This can be as minor as redecorating your living room, or as major as an extension or structural repairs.
What can I use a home improvement loan for?
In most cases, a loan you take out for home improvements is simply a personal loan, so the money isn’t tied to any one project. That means you could use your loan for:
- Structural repairs
- Painting and decorating
- Renovating your kitchen
- Renovating your bathroom
- Adding a garage
- Adding a carport
- Adding a new room
- Getting your windows or doors replaced
- Getting your roof replaced
- Getting new siding
- New flooring and carpets
- Getting you heating replaced
- Getting your air conditioning replaced
- Improving your driveway
Should I use credit cards instead of home improvement loans?
For small amounts, and if you have great credit, a credit card may be a good option. If you’re only planning to use up to $2,000, and you can get (or already have) a 0% interest period card, then that will be your best option. However, if you’re looking to borrow more, only have high-interest credit cards, or want to pay it off over a longer period, then you’re going to need to look at home improvement loans.
What are the benefits of a home improvement loan?
Many people choose to get a home improvement loan to help them realize their vision for their home. Here are a few benefits of choosing a home improvement loan.
- Flexible: home improvement loans aren’t tied to one purpose, which means you can use the money flexibly to buy the materials you need for your home improvement, hire people to do the work for you, or use it to fix an unexpected issue.
- Home improvements are expensive: if you’ve owned a home for any length of time, you’ll know how expensive home improvements quickly get! Unless you’re giving a room a quick coat of paint, doing any fencing, decking, or remodeling jumps into the hundreds of dollars for even a small project. For a big one, you’re looking at thousands and tens of thousands of dollars. Few of us have that kind of money lying around.
- They allow you to spread the cost: home improvement loans ensure you pay off the loan over a predetermined length of time, such as 5 or 7 years. That means that, unlike borrowing on a credit card, you know exactly what borrowing the money will cost you, and when it will be paid off.
- They allow you to make emergency repairs: there are many problems that can arise with our homes that need to be fixed ASAP. An issue with the roof, heating, gas, water, or air conditioning can need immediate attention, especially during summer and winter, when the weather outside may make the problem more urgent. A home improvement loan will give you the money you need to make the necessary fixes.
- They increase the value of your home: unlike taking money out for other purposes, borrowing for home improvements is one of the safest reasons to borrow money. In all cases, the home improvements you make will improve the overall value of your home, meaning that although your borrowing money and paying interest on it, there’s a good chance that it actually increases the value of your biggest asset.
Should I get an unsecured loan or a secured loan for home improvements?
With the average kitchen costing more than $23,000 to remodel, a bathroom $21,000 and even a wood deck costing over $10,000, it is no surprise that home improvement loans are so popular. In most cases, and for smaller amounts (under $35,000 or so), an unsecured home improvement loan will be best. While the interest rate may be higher, an unsecured loan is essentially based on the promise that you’ll pay the lender back.
A secured loan is one where you put up collateral to get the loan, and in most cases for a home improvement loan, this will be upon the home itself. While this may be necessary or the best option if you’re looking to borrow a large amount of money, it’s also more of a risk. If you default on your payments, they can take the collateral from you to pay off your loan. For this reason, you should think wisely before taking out a secured loan.
How much can I borrow with home improvement loans?
Since most home improvement loans are simply personal loans, this will depend on a few factors:
- Your income
- Your credit score
- Other debt you have
Generally, most unsecured home improvement loans are between $3,000 and $35,000, though this can be less or more depending on your needs and circumstances. Our lenders typically lend between $1,000 and $35,000, and you need to have been in your current employment for 90 days, be a US citizen, over 18, an income of $1,000 a month after tax or more, and a checking account.
How can I get a home improvement loan?
When you’re ready to apply for a home improvement loan, you need to compare loans to ensure you have the best chance of getting approved and get the best rate. It’s important to remember that you will be paying for borrowing the money, and so you need to get the best deal possible! That’s what we do here at US Loan applications; we help you compare loans and find the best one to suit your needs and circumstances. If you’re approved, you can pick your loan, and you’ll be redirected to their site to sign the agreement. You’ll often have the money you need within just a few hours. Click here to find out more or get started today!