Whether you are looking to make a few minor home improvements to suit your aesthetic taste or you are in need of a major home repair, financing home improvements can be a major headache. Finding ways to pay for your home improvements can be tricky especially when you need the money quickly. Luckily, there are several ways to arrange the money to finance your home improvements, here in this context I will discuss about four possibilities to get the money, each having its own benefits as well as some drawbacks. Let’s get into all the details.
Quick Cash Loans
If you need to complete a home improvement project immediately, a quick cash loan may be the way to go. Quick cash loans are exactly as they sound- you get the cash you need quickly with little hassle. You can apply for quick cash loans online or in person at a lenders office.
Typically, lenders will simply check your credit score and credit history when applying for a quick cash loan. There is no collateral and no extensive background checks. If you have good credit score and simply need money fast, this is an easy way to finance your home improvements.
If you do not have a good credit score, you do not need to worry as many online lenders will provide you loan. I will suggest not to take decisions in a hurry as some lenders do take some time to provide you cash, but the interest percentage is less in this case, you need to do some research to get it.
But opting for this loan can be stressful as the money along with the interest get debited from your account automatically.
Home Equity Loans
If you own your home and have been paying your mortgage for several years, you may want to opt for a home equity loan in order to finance your home improvements. When you apply for a home equity loan, you offer your home as collateral to the lender. This means, if you get a $10,000 loan, the lender granting that loan now owns $10,000 of your house. As you pay back the loan, this amount decreases, and you can simply continue living in your house as usual (even while it’s under construction for your improvements!).
Many people utilize home equity loans rather than personal loans as you may be able to get more money at a lower interest rate. While a home equity loan may take a little more paperwork and time to apply than a quick cash loan, the wait can be worth it when you are making smaller monthly payments for a larger cash pay-out.
A major disadvantage of home equity loan is if you fail to pay off the loan the lender can take your house.
When hiring a contractor to help complete your home improvement project, ask if they extend loans. Many contractors may offer a payment plan to help assist you with the financial burden of your project. When using your contractor as a lender, be sure to have a contract that states that you are still able to withhold payments if you are not happy with the work that is done on your home. You need to make sure that the contract should not have any loopholes.
While your contractor is your lender, they are also still responsible for completing the job to your satisfaction. Be sure to pick a reputable contractor especially when asking them to also provide financing for your home improvements.
Using a credit card to finance home improvements is a simple way to pay for everything you may need throughout the job. If you already have a credit card or two, be sure to use one that has low interest and, if possible, gives you points on each return which you can cash in later. If you do not have a credit card, search for one with a 0% APR which will give you time to pay off any expenses you incur without also paying interest. Using a credit card is almost like giving yourself a quick cash loan- you have the money immediately with little hassle!
A gentle reminder if you are using credit card to finance your home improvement: if you receive a large amount of money anytime, make sure to clear your credit card debt, because the more time you will require to pay off your debt the more interest you need to pay at the end. Sometimes the credit card interest can go up to 17 to 18%.
From quick cash loans to contractors as lenders, there are many ways to finance your home improvements. Look into all of your options before you begin and be sure to pick the best one for you. Then, start picking out paint colors and throw pillows afterward!