Why Get a Personal Loan for Home Improvement?
Posted On October 27, 2021 · Length of read: 3 minutes
Your home is not just your castle; it may also be the largest investment you ever made. And unlike cars, homes may grow in value even as they get older. If you don’t keep up with your home’s repairs, though, you could lose some of that value.
Reasons to take out a personal loan for home renovation can vary and could be a smart move to help maintain the value of your home. These loans can help you complete all the necessary repairs and updates your home requires but without the need to pay for these things all at once.
A Personal Loan for Home Renovation
You may want to get a personal loan for home renovation for normal upkeep, to fix something that broke or to remodel. Some people look into financing to weatherize their home so that they can save money on utilities. If your family is growing and you need more space, a personal loan for home renovation could be used to help you build an addition to your home.
Benefits of Home Renovation
While you’re living in your home, the benefits of home renovation are obvious. A larger, warmer, and more inviting home can be an oasis for your family. Your growing children may enjoy having their own rooms, and you could save money on heating and cooling bills with weatherization. After being weatherized, homes can save an average of $400 a year in heating and cooling bills, according to the U.S. Department of Energy.
If you’re getting ready to sell your home, this can also be a great time to start looking into a personal loan for home renovations. Sprucing up your home before putting it on the market may increase its the value and attract more buyers.
Selling Without Renovation
Selling your home without renovating is definitely a possibility, as there are usually eager investors looking to take your house off the market before you have time or money to put work into it. Of course, this may be a welcome offer if you must move suddenly or your home needs extremely expensive repairs.
In many cases, though, completing renovations before you sell your house could put more money in your pocket. House flippers want to purchase your house cheap so that they can repair it and take the profit for themselves. A home renovation loan could allow you to be the one to profit from your home’s true value.
In 2020, 5.9% of all home sales in the U.S. were flipped houses, according to ATTOM Data Solutions.
How to Get a Home Renovation Loan
There are several ways to get a home renovation/improvement loan, including taking out a personal loan, a home equity loan or an equity line of credit. A personal loan can have a higher interest rate than a home equity loan or equity line of credit, but it usually doesn’t require collateral. You can obtain a personal loan based on your credit history, debt-to-income ratio and other factors, according to U.S. News & World Report.
Factors to Consider
Any major financial decision requires careful thought. Before you start shopping for a personal loan, you should evaluate your goals. Make a list of repairs, updates and renovations that your home needs. After you know what you want to do, research costs, and then do some comparison shopping to see where you can get the best price for materials and labor. After finishing your research, you’ll have a better idea of how much money you will need to borrow.
Splash Financial works with a variety of lenders that offer personal loans. The application process is fast, and the loan terms are transparent. If you are interested in getting a personal loan, click the link below to explore your options.
The information provided in this blog post is not intended to provide legal, financial or tax advice. We recommend consulting with a financial adviser before making a major financial decision.