Best Home Improvement Loans
The term home improvement is usually used as a collective term to describe projects undertaken to enhance the overall quality. The idea is that homeowners will be able to make their houses better in terms of functionality and style. Another factor that may come into play here is functionality since many homeowners find a need for remodeling once they move into a new house or are moving out. For these homeowners, updating the house and its interiors is an important part of completing the renovation or redecorating project. The process may involve anything from painting the walls to adding a kitchen island to the living room.
A home improvement loan is often sought to upgrade or remodel a big property and add to its resale value. Home improvement loans prove beneficial as they finance everything from construction to repairs to renovations and whatnot.
Home improvement loans come in handy when you don’t want to provide your house as collateral or have sufficient equity. If you are researching ways to finance your home renovations, we have compiled some of the best options available in the market currently.
What are home improvement loans?
When homeowners apply for home improvement loans, they can choose between getting a home equity loan or a home equity line of credit. A home equity loan is a loan that a borrower gets based on the equity in their home. These loans have low interest rates, and the loan term is usually long enough for a homeowner to finish the project.
On the other hand, a home equity line of credit works monthly, and a certain amount of money can be borrowed using the credit. With this type of loan, many people use this option when they need money urgently.
Unlike business loans, Home Improvement Loans are an option to finance renovations, remodeling, or modernize your home. These are unsecured personal loans, and you don’t have to pledge your assets or have any collateral to qualify for these loans.
These loans are serviced over monthly installments within a specified period of few years. These loans can be up to 1000 000$ and have an annual percentage rate between 6%-36%.
How does home improvement loans work?
A home improvement loan is typically an unsecured loan that must be paid over 12 years with fixed monthly installments. Once you decide to opt for a home improvement loan, various lenders online may fund you along with credit unions, banks, etc.
The act of home improvement, renovation, or remodeling is the same as a home renovation but refers to making additions or refinishing to a home. Home improvement may include projects that upgrade the house’s interiors, exterior, or any other significant improvements on the property to make it more comfortable and appealing. This activity aims to make the home more efficient in serving its purpose and looking attractive and appealing to visitors.
With the kind of boom in the real estate market experienced in recent years, many people are investing a lot of money and putting up homes. In the midst of this, some homeowners are opting for home improvement loans. A home improvement loan is another loan option available for those looking to finance their renovation projects. A home improvement loan allows homeowners to pay for the materials needed to perform the remodeling job, such as new doors, walls, or even a pool.
Since there are so many lenders who provide these loans, prospective borrowers should do some research and thoroughly understand the terms and conditions set by each of the lenders before applying. Certain factors must be taken into consideration before applying for a home improvement loan. Homeowners should first consider the type of loan they wish to apply for, whether a home improvement loan or a personal loan. Other important considerations include the amount of money to be borrowed, the interest rate to be paid, and when the work done on the house will be completed. Many people can complete a major remodeling project within a few weeks, but it may take a few months for them to get a home improvement loan.
Finally, another popular home improvement loan allows the borrowers to pay for their remodeling and renovation projects in installments. Usually, these types of loans are given on a weekly or monthly basis. The payment schedule will depend on the amount of money being borrowed and the lender’s interest rates. However, many homeowners find that these loans allow them to do their remodeling projects on time without having any financial difficulties.
How to qualify for a home improvement mortgage?
A good credit score is required to qualify for a home improvement loan. You will also need to make sure you have all the documents to prove your income. If you plan a loan by providing collateral, you need to get an appraisal done on the house to determine its value.
What is the best home improvement loan lender?
Choosing the best option for a home renovation mortgage depends upon the factors like the project you need to finance, the project timeline, creditworthiness, etc. you can use a mortgage calculator to calculate your bad credit mortgage refinancing options. If you need a bad credit personal loan quickly and don’t want to provide collateral, you need to narrow your search to unsecured personal loans.
But if you are up to using your home as collateral, don’t go for a payday loan online and make sure you have a well-established credit history that may help you qualify for a secured loan with relatively lower interest rates. Thus the factors to consider while selecting the best home improvement loan are as follows:
- Lower Interest rates: Search for lenders that offer low-interest rates. Even if your credit score is not that strong, research for lends with maximum low-interest rates.
- Loan amount: How much do you need to borrow? Are you tackling a significant renovation or just buying a piece of new equipment? Estimate the amount you need and search for lenders that offer the amount accordingly.
- Fees: Lenders charge an origination fee, late payment penalties, miscellaneous fees on top of the principal amount and interest. Make sure you are aware of the fee payment that comes with the loan.
- Repayment: Consider the period you have to repay the loan. Long-term repayment comes with lower monthly payments. Make sure you choose accordingly. Thus, home improvement loans are a great option for changing your house and increasing its resale value. However, make sure you have researched all options to find your best fit.
Top 10 Best Home Improvement Loans
The top five Home Improvement Loan options are as follows:
SoFi offers an attractive interest rate of 5.99% and as large as a $100,000 amount of loan to finance your home improvement needs. Be it a small renovation job or an extensive one, SoFi can cover all your needs.
Moreover, SoFi approves loans to its applicants without any hard credit inquiry and does not charge them any late fee, prepayment, or origination fee.
- SoFi does not require collateral.
- It provides an option to pause the payments in case of any difficulties temporarily.
- Funding takes a long time and might take up to one week to receive funds.
- A good credit score is required to qualify for a loan.
With Upgrade, you can get the annual percentage rate that you qualify for within minutes of filling the application form. They also provide quick processing and funding as compared to other options.
Upgrade offers personal loans of up to 50,000$ with low fixed rates. They offer affordable monthly payments that suit your budget and have no prepayment penalties.
- Upgrade offers secured, co-signed, and joint loan facilities.
- They offer rate discounts on direct payment to creditors with debt consolidation loans.
- Upgrade charges origination fees and penalties for late repayment.
Wells Fargo personal loans
Wells Fargo has multiple options to finance your home improvement loan, including an unsecured loan. You may be eligible to take a personal loan without collateral.
Wells Fargo has many branches all over the United States and might be an appealing option to the borrowers who would prefer discussing ways to finance a loan in person.
- Wells Fargo provides an option for unsecured home improvement loans.
- You can loan an amount as small as 3000$.
- There are three options available for the service: online, over the phone, and at the branch.
- The application process can be lengthy and can take a long time.
- Hard credit inquiry may be required.
- You need to be a customer of Wells Fargo to qualify for their online or over-the-phone application.
Light Stream is best suited for borrowers having an excellent credit score. The annual rate percentage on loans starts at 3.99%, and the lender charges no other extra fees. Well-qualified borrowers are eligible to borrow an amount of 100,000$ with no home equity requirements.
- Light Stream has low-interest rates starting from 3.99%
- Funding is quick, and borrowers may receive funds on the same day.
- Light Stream does not have home equity requirements and does not need appraisals.
- There is no pre-approval option available.
- It is tough to qualify for a loan if credit history is not stellar.
- 99% APR only applies to loans ranging from 10,000$ to 24,999$.
When your credit rating is not stellar, Avant is the right option for you to get a Home Improvement loan. The annual percentage rate (APR) of Avant starts at 9.95%, and they have administrative fees up to 4.75%. This option is specifically best suited for middle-income-borrowers. Though it is not the most affordable financing, they have attractive options to offer.
- Avant does not require any home equity to qualify for a loan.
- Funding is quick, and one can receive funding within a day.
- A soft credit history that has no impact on your credit history tells you if you qualify for a loan.
- The administrative fee of 4.75% may increase the amount of your loan.
- You may get lower interest rates from elsewhere.