Planning to repair, renovate, or beautify your home? Discover how to get funding to improve your house.
In this article, the founder and CEO of AdvanceSOS, Nick Wilson, shares his insights on home improvement loans. Nick is a well-seasoned loan officer who has seen how loans work for customers. He will use the said experience to share the basics of home improvement loans. As CEO of AdvenceSOS, Nick will also share his advice on how to get the best loan deal for yourself based on what you need. AdvanceSOS’s fast and easy application lets you get payday loans in Florida, Texas, Ohio, and other states.
What Can You Use Home Improvement Loans For?
Home improvement loans are unsecured personal loans. You can get one to repair, renovate, upgrade, or remodel your house. The uses for home improvement loans vary from customer to customer. The general idea is that it is a loan you can get to improve your house.
Common reasons you may have to use a home improvement loan are,
- Fixing blown plumbing
- Heater maintenance before winter,
- House repainting, or
Home improvement loans work best for borrowers who do have money – just not all at once. You know you have the cash you need to fund your home improvements, but in a couple of paydays more. You can use a loan to get the money you need right away, payable in installments so that you can work on your home now.
Home Improvement Loans: How Much Can You Borrow?
A home improvement loan comes in lump-sum or bulk. Depending on how much you ask and get approval, you can cash out between $1,000 to $100,000.
What Are Home Improvement Loan Rates?
According to the top loan providers in the US, home improvement loan rates range from 3.99% to 35.99% per annum. But the actual rates differ from lender to lender. Interest rates can lower with a more significant amount, an extended period, or collateral or a cosigner.
As you can hold onto a home improvement loan for anywhere around one to ten years, borrowing your loan for less than a year can raise your interest rate. But if you hold your loan for ten years, you may most likely find low-interest rates of around 3.99% to 10% per annum only.
How to Get Approval for a Home Improvement Loan?
To make sure you get approval for a home improvement loan, you need to look at: (1) yourself and (2) your lender. First, look at yourself to convince your lender to lend you money. Do you have,
- A strong credit history,
- A good credit score,
- Collateral (house title, car title, jewelry, etc.),
- A cosigner (someone who can vouch for you), or
- A stable income (from employment, benefits, business, etc.).
Second, look to your lender. Ask the questions,
- What is the scale of this lender’s business? Large, medium, or small? Large-scale lenders like banks and credit unions have more money than other lenders. So, if you need a big loan, they may have what you need more than other lending companies. But you will also need to convince your lender more to get loan approval. Make sure you have bullet-proof documents and requirements to increase your chances.
- How easy/hard is it to convince this lender to lend me money? Online direct lenders and lending apps are the easiest options to get fast cash. There are often little checks you need to pass to get loan approval. A hard credit check is rarely a need, even. With these options, you get a higher chance of getting approval the smaller the amount you ask for. It’s easy to get approval; the question is – is the amount they can offer enough for your needs?
Frequently Asked Questions
Is a Home Improvement Loan Mortgage?
No, a home improvement loan is not a mortgage. While both have to do with financing your house, a home improvement loan is unsecured. Unlike a mortgage, it does not make your home collateral and endanger it.
The difference is: if you cannot repay your mortgage, the bank can seize your house. If you cannot repay your home improvement loan, your home is safe from your lender.
Is a Home Improvement Loan Worth It?
A home improvement loan is worth the while if you know you can repay it as you commit. If you already know where to draw the funds to repay it, borrowing money in bulk should not be a problem. The primary issue customers have with loans is when they over-commit. Always know the ins and outs of your budget. Live within your means – even as you take out home improvement loans.
Amanda Girard is the official financial copywriter of AdvanceSOS. She owns the credit for writing and fact-checking the information we share on our website. Amanda also ensures that you get the best info on our products and services.