Have you been thinking about remodeling your kitchen for the longest time? or what about adding that swimming pool to your backyard? With all of these plans of renovation the only thing which is stopping most people is the lack of capital. Don’t worry, there are a lot of options out there through which you can get that dream come true. Otherwise, it might you a long time to accumulate enough capital to get everything done. Renovations can get pretty expensive and with all of these extra expenditures these days it can be pretty difficult to save enough over a long time. Plus, you might have some bigger plans for the future other than renovating your house. Let’s take a look at some of the options which you have.
You don’t have to take out a home loan to finance adding that swimming pool to your home. Basically, a home improvement loan is a type of personal loan which is specifically taken to make improvements or repairs to your home. But there are advantages and disadvantages to this type of borrowing as well.
Everything To Know About Home Improvement Loans
In these types of loans, you don’t have to put up your house as a collateral and you can typically get amounts of up to $100,000. The interest rates are pretty variable, depending on your credit rating and the amount you are borrowing they can range anywhere from 6% to 40%. The term of repayment usually revolves around a couple of years. home improvement loans basically are like installment loans and chances are that if you search for installment loans near me, there will be a few banks offering home improvement loans there.
One advantage here as you can see is that fact that your house is not put up as collateral. If you have a good credit rating, then you can get a pretty good deal on the terms of the loan. If you don’t repay on time though your credit rating can take a pretty bad hit.
If you considered using your credit card to finance any of your home improvements, then I highly recommend not doing it. Large amounts of money going towards your credit card bills can lead to very high interest as well. If you don’t pay even one payment on time, your credit rating and the interest rates will take a huge beating. Credit cards can be a good option if you are looking for smaller improvements like getting a new barbeque.
Some advantages here can be the quick process of getting a home improvement loan approved. These days with everything online you can get approved in a couple of minutes and the funds can be available to you withing a few days. On the other hand, if you go for a home equity line of credit then it can take weeks or even months to get it approved.
Another advantage is the fixed interest rates which means fixed payments in the future. You can budget accordingly knowing exactly how much you will have to pay each month.
One disadvantage you can have is the high interest rates especially if you have bad credit. As it is a type of unsecured loans, the interest rates are anyway on the higher side and coupled with the bad credit rating can really boost that interest rate.
You also don’t have advantages over tax when taking out a personal loan. You cannot deduct the interest payments from your tax.
Before you go ahead and start searching for installment loans near me, the first thing you should do is to check the amount you will be needing and see what all offers you are getting from different banks and financial institutions. When you have different offers, check their interest rates and payment structure, also check whether you can add a co-signer or co-borrower to improve your interest rates.
If you are being offered a longer term of payment it might look good because of low monthly payments but over the long term you will end up paying much more, especially if you have higher interest rates. Getting these types of loan have become much easier now, most places will offer you no fax loans to make the whole process fast and easy.
