A well-planned home renovation can increase a property’s value, while also making it more comfortable and functional for the homeowner. However, renovating can be costly, and financing home renovations is a common solution for homeowners who need a bit of extra help covering project costs.
Can renovations be loans?
A home improvement loan can provide competitive interest rates compared to other forms of unsecured debt, such as personal loans and credit cards, and can also offer consistent monthly payments that make budgeting easier. Plus, depending on the type of loan, the interest may be tax-deductible.
The lending landscape for home improvements is complex and diverse, with traditional banks, credit unions and online lenders all offering different terms and eligibility requirements. It’s important to explore all of your options when it comes to financing a home remodel, and to focus on the lenders that are most likely to provide the type of loan you need.
How it works and when it’s best:
A personal loan is one of the most accessible financing options for home improvements, especially for borrowers with good to excellent credit who can often snag low interest rates. But a personal loan can add to your overall debt burden and come with short repayment terms that could put financial strain on your household budget. It’s generally recommended that you use a personal loan as a last resort, and instead save up cash or turn to other borrowing alternatives to fund home renovations.