Planning will help you understand how to go about the project, but if you haven’t got the necessary funds, a personal loan for home improvement is your solution. However, before you approach a lender and apply for the loan, here are a few things you need to keep in mind.
Home Improvement as a Personal Loan
A home improvement loan is simply a personal loan, and bears all the conditions of a regular personal loan. Personal loan interest rates vary across different loan vendors, and a little extra research on your part can help you find the one with the lowest interest rate. Since these loans are also unsecured, getting a bank to sanction the loan is an easy task. There’s no need to provide collateral or to divulge your reasons for taking the loan.
You’ll have to show documents like your proof of address, identification and financial statements from the last three months. Lenders will use this information to assess whether you’re financially stable to repay the loan.
No Strings Attached
When you take a home improvement loan, you can use the funds to renovate spaces both inside and outside your home. For example, you can install new windows to allow more light to enter your home. You could even install a porch or add another room using the money from a home improvement loan. A few lenders even let you use the funds for new furniture. Taking out a personal loan for home improvement allows you to do just about anything you want with your home.
Keep it Small
When you opt for a home improvement loan, try using it to take care of simple work, like installing a new window, fixing the plumbing or painting the house. It’s easier to calculate the cost and time of completion in the case of smaller projects. That makes it a lot simpler to budget accordingly, and you’ll end up spending a smaller amount of money.
Bigger projects like adding a room or switching up the look of your kitchen can be time-consuming and expensive. Also, you may run into other financial obstacles while the project is underway. That means you’ll have to ask for a bigger loan amount. Also, some larger products (i.e. a new roof) can be covered by homeowner’s insurance in some cases, so you may want to check and see if your project is covered prior to taking out a loan.
These are a few things to keep in mind before you take a home improvement loan. Ensure that you’ve done a stringent check on the lender that you’re approaching, so that you understand the terms and conditions involved.
Photo: Flickr: Phil Roeder