Why Get a Home Improvement Loan?

Home improvement loans allow you to use the equity in your home to fund repairs, redecoration or refurbishment of your home. You can borrow against the value of your property to release cash to fund an extension or conservatory, a new kitchen or bathroom or general repairs or redecoration.

So, why get a home improvement loan?

They offer a low interest rate

When you take out a secured home improvement loan the lender takes a legal ‘charge’ over your property. This means that the lender has a legal right to repossess your home if you fail to keep up your repayments.

As the lender has the security of your home as collateral, they can offer home improvement loans at lower interest rates than other types of borrowing. You will typically pay a lower rate of interest on a home improvement loan than you will on an unsecured loan, credit card or bank overdraft.

They can be arranged quickly

It typically takes between 3 and 6 weeks to arrange a home improvement loan. This means that from the point of application you can expect to have the money in your bank account within a month or so. This means that you can get started with your home improvements straight away.

They can fund whatever improvements you need to make

One of the main benefits of a home improvement loan is that you can use the funds for pretty much any purpose.

If you want to increase the living space of your home by adding a single or double storey extension then a home improvement loan can help pay for the building work. You may also want to add an extra bedroom through a loft or garage conversion.

Alternatively, you may want to improve the interior of your home by replacing your kitchen or bathroom. A home improvement loan can fund the refitting of a room as well as helping pay for new furnishings or carpets.

In addition, you can use a home improvement loan to pay for essential repairs to your property. For example, you may want to replace old windows and doors, repair your roof, install central heating or replace your outdated boiler.

They can help you add value to your property

Lots of improvements that you can make to your home will increase the value of your property. According to Halifax, a loft conversion should add an average of £24,981 to the value of your home whilst a new kitchen will add 4.6 per cent to the value of your home, according to the Daily Telegraph.

So, if you are looking to maximise the value of your property then there are a number of improvements you can consider. Adding off-street parking can add a significant amount to the selling price of your home, particularly if you live in an urban area. Extra living space – a garage conversion, conservatory or extension – can also add value.

They can help you sell your home

A home improvement loan can help you fund work that makes your property more attractive to potential buyers and more likely to sell.

For example, you could install a new boiler or central heating system in order to modernise your property or you could refit the kitchen or bathroom in a neutral, functional style. You could also use the proceeds of a home improvement loan to redecorate the interior of the property to make it more appealing to prospective buyers.

They can help you borrow a large amount

Home improvements can be expensive. It is not unusual to pay in excess of £20,000 for an extension or loft conversion while a new kitchen can easily set you back £5-8,000. Lots of unsecured loans are only available for smaller amounts while many credit cards will have a credit limit lower than the amount you need to fund your work.

Secured home improvement loans can generally be arranged for any amount from £3,000 to over £100,000, depending on the equity in your home. So, if you do need to borrow a large amount for an expensive project, a home improvement loan could be the perfect solution.

They can help you avoid selling your home

Many people need to access the equity in their home in order to pay for essential repairs or vital improvements. Selling your property may seem like the only way of accessing this equity, but a home improvement loan allows you to borrow against the equity you have in your property allowing you to continue living there.

They are easy to repay

Home improvement loans can generally be taken over a term as long as a traditional mortgage. It is not unusual for borrowers to take their home improvement loans over a term of anything between 3 and 25 years.

What this means is that it is possible to spread the repayments of your home improvement loan over a long term. This means that you minimise your monthly repayment, keeping the loan affordable to you.

They are available to you if you are self-employed

Many unsecured loan lenders have been reluctant to agree loans for self employed applicants over recent years. It can also be hard to confirm your income if you’re self employed, particularly if you have been trading less than a year or two.

As home improvement loans are secured on your property, the lender has the additional security of your home. This means that they are often much more likely to consider a loan application from a self employed applicant.

They are available to you if you have had bad credit in the past

If you have experienced credit problems in the past then you may have found it tough to be agreed for an unsecured loan or credit card. Applicants with County Court Judgments (CCJs), defaults, mortgage or loan arrears or missed/late payments on credit cards can often struggle to be agreed for loans and other credit.

However, as you’re offering your home as security when you take out a home improvement loan, lenders are much more likely to be sympathetic to your application. Many lenders are happy to consider applications from people with previous credit problems, although bear in mind that you may pay a higher interest rate if you have a chequered credit history.

To get your home improvement loan, fill our form on the right.