A home is one of the greatest investments that serve as a status symbol. However, it needs to be well maintained to increase in value. That includes performing necessary repairs, roof replacement, fixing some damages, or updating the plumbing. You also need to do some upgrades like renovating the kitchen, installing a swimming pool or even buying a washer and dryer. Perhaps you don’t have enough cash to cater for the cost of these renovation projects. In this case, you can fund them through a home improvement loan.
What Is a Home Improvement Loan
Home improvement loans allow the borrower to update his home, under the loan terms set by a bank or any financial institution providing the loan.
Note that a home improvement loan isn’t the same as a home refinance loan or home equity loan, so no room mistakes. Those types of home loans are mortgage-loan-oriented, meaning that they are longer and involve large loan amounts. Like most home loans, this type of financing is secured through the liquidity in your house as capital.
Features of a Home Improvement Loan
- A home improvement loan features large lending amounts, ranging from $50000 to $100000
- It has varying interest rates, mostly as low as 3% if you have excellent credit and more than 18 perfect if you have bad credit.
- Based on the contract terms and loan amount, the payment duration of home renovation loan payment might be short as 12 months, or even longer as seven years.
- Applications for a personal home improvement loan is usually vetted fast and has high chances of approval. You will have the cash in your account with 24 or 48 hours of approval.
- Credit unions, banks, and online lenders offer home improvement loans
How to Get a Home Improvement Loan
Creditors issue unsecured and secured loan options for home improvement loans. The creditor will evaluate your credit score, whether you have enough equity in your home and the kind of renovation project you intend to do with the loan. Some of the home improvement projects will increase the value of your home and look attractive to creditors. They include:
- Bathroom and kitchen upgrade
- Installation of a deck or swimming pool
- Air duct replacement or plumbing
- Foundation and slab repair
- Septic or well repair/replacement
- Room additions
- Siding and window replacement
- Replacement or installation of insulation units
- Garage, attic or basement finishing