Typically, a "home improvement loan" refers to an unsecured personal loan you use to pay for home renovations. But personal loans aren't the only financing option when you're ready to update your home. The best way to pay for a home remodel depends on factors like your home equity, credit and goals.
Renovating your home can be a great idea for a lot of reasons. Not only will you be able to increase your own quality of life, but you’ll increase the home’s resale value and your net worth.
The only downside is that home renovations can be very expensive, ranging up into the tens of thousands of dollars or more in many cases. And while it’s always best to save up so you can cover these expenses in cash, the reality is that’s not always possible.
The good news is that there are a lot of different options for home improvement loans that can front you the cash you need—for a price, of course. We’ll help you sort out your different options and pick the best solution for you.
Home improvement projects are a significant challenge. From planning upgrades to purchasing supplies, finding contractors and managing schedules, it can feel like a part-time job.
But funding a home improvement project doesn't have to be a big headache. A home improvement loan is a personal loan that can be used to purchase materials or pay a contractor to build a pool, remodel a bathroom or make other improvements. You don't have to use your home as collateral, and financing is quick, usually in just a few days.
The decision on how to finance your home improvement in America depends on your current financial situation and how you will pay off your loan. Each option has its own advantages and disadvantages, so the right approach depends entirely on the situation.
1: Exploring Your Options
The first step in making a financial decision is research. Explore both large financial institutions and alternative lenders and explore the different lenders on the market. Use our comparison tool to see available rates.
Learn about the many options available to you, including equity financing, credit cards or personal loans. Record the best option in your investigation and move to the next step in the process.
2: Look at interest and monthly payments
Lenders must conduct a preferential credit check to determine the actual interest rate you may be entitled to. It appears on your credit report and gives you several points (although much less than a hard credit check, but a more complete response). To reduce the damage, check how much your project needs.
Consider all aspects of improvement before deciding on a number. Include a contingency amount when calculating the total. Use this information to determine which loans you qualify for, terms and monthly payment requirements. Find the most desirable option and proceed to the next step.
3: Document Preparation
Loan documentation requirements vary from company to company, but standard documentation is still required.
The lender will ask for your previous tax returns or at least T4 reports, credit reports and bank statements. Proof of ownership is also required along with government-issued identification. If you are holding a face-to-face meeting, ask in advance about the required documents.
4: Apply
After you have collected all your paperwork, you can apply for a loan. In most cases, you will receive a response within 3 business days.
This can speed up the process if you have pre-approved for your loan through your lender. After your application has been approved, it may take up to 10 business days for your funds to arrive. If you need money urgently, communicate your concerns in advance so that we can meet your expectations.
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