Financing your Home Improvement Project with Personal Loans.
Renovating your home is one of the biggest achievements for adults. It is a major accomplishment, because to do so would require some serious funding. Home improvement is no simple task.
In order to finance your home improvement project, you have the option of using your savings, your credit card, or a loan. But if you do not have enough savings, and if your credit limit would not be able to cover for your home improvement expenses, then it is advisable for you to know about personal loans and how such loans may just be the answer to your problem.
What are Personal Loans?
Personal loans are unsecured loans that can help give you cash that can be used for various purposes. Personal loans are great because no collateral is needed, and the interest rate is usually low. The repayment period is usually around a year, up to five years.
However, because of the absences of a loan security, the bank would be a bit more meticulous, and would conduct some background check to ensure that you have the capacity to repay your loan.
How to Use Personal Loans for Home Improvement
Home improvement is one of the purposes for which a personal loan can be applied for. To help you get approved for a personal loan for you home improvement project. Just apply for a personal loan, state your desired amount, and say that the purpose of your loan is for home improvement. If they ask what your specific plan is, tell what your intended project is. Banks don’t usually dig in too deep for your purpose as personal loans are very flexible, but it would help if your purpose is declared. If your purpose is evident, you have a higher chance of getting approved.
Why Personal Loans?
Personal loans are not the only financing that you can use for your home improvement project. If you are considering some other mode of funding, the following reasons why personal loans are great for home improvement projects can help you decide:
1. A personal loan is unsecured
One of the best features of a personal loan is that you may apply for it without the need for a collateral. Not all of us have assets that can be used as loan security. The home that you are planning to renovate may be your family’s home and might not be under your name yet. It is great that there are less requirements to qualify for financial leverage.
2. Less financial burden
Equity loans can also be used for home improvement, but may not be the best choice financially. It has a longer repayment period that would, overall, add a lot of interest to your principal loan amount.
Also, the minimum loan amount for equity loans are usually $10,000, which may be more than what you’ll spend for a simple home improvement project. Personal loans would be able to provide lower amounts, so you would not get more than you need. Furthermore, personal loans have shorter loan terms so you won’t be paying that much in interest as compared to long-term loans.
3. More freedom
While your primary reason for loaning is home improvement; it is a relief to know that any extra amount may be used for other purposes for personal loans. Other loans are very strict with the proceeds of a loan while personal loans are very flexible. You can never be too sure about the total amount of a project before it is completed so having the freedom to reallocate the proceeds of your personal loan is a great idea.
Where to Get Home Improvement Loans?
Many banks and financial institutions offer personal loans that you may use for your home improvement project. Each provider has its particular offer. And one may be better for your specific need over the others. It is best that you get as much information about the personal loan offers of various banks; and weigh which one is the best for you.
Things to look out for are interest rates, minimum loan amount, requirements, and promotions. Take into consideration all these to find out the personal loan offer that is best fit for your home improvement needs.
