Home Improvement Loans

While home improvement loans come as a blessing to those who are in need of funds to refurbish their homes, just like every other loan, these loans also come with several pros and cons.

Pros

• A home improvement loan provides the much-needed finances to carry out long-pending repairs in your home or to give your home a new look, without having to use up your savings.
• This loan is most suitable if you want to avail a high amount of credit.
• Home improvement loans can be utilized for any purpose that serves to improve the condition of your home, such as renovation, room addition, repairs, addition of a pool, remodelling the kitchen/garden, etc.
• This loan provides long-term benefits by improving the market value of your home.

Cons

• If you have other loans to pay off, taking an additional loan may be an added burden.
• Unlike some other loans, a home improvement loan does not come with attractive tax benefits.

Consider the budget of your home improvement project to determine the amount you should borrow. Take into account, the amount you need for the project, while keeping in mind other factors such as the loan-to-value ratio and the time frame within which you can repay the borrowed amount. A loan that strains your finances will do no good, especially if it is meant merely to make some aesthetic additions.

While there are several types of loans you could choose from, personal loans and home improvement loans are ideal to meet your home improvement expenses:

• Personal Loan- Personal loan refers to an unsecured loan that can be used for a variety of purposes, including home improvement. These loans do not require collateral. In this type of loan, lenders allow credit up to $100,000.
• Home Improvement Loan- This is an unsecured loan that can be used to make all kinds of improvements, to a primary or non-primary residence. Through Lendvious you can avail home improvement loans up to $100,000.

A FICO credit score of 620 or higher is usually required to avail a home improvement loan. However, there are several lenders who offer home equity loans and home improvement personal loans for applicants with credit scores even as low as 580. But lower the credit score, higher is the interest rate on these loans.

Home improvement loan is a form of debt that allows you to borrow the money you need to upgrade your home, repair/refurbish it, or make renovations. This loan offers the convenience to improve your home now, and pay the cost over a manageable period of time. Instead of paying for the project in cash and using up your savings in part or full, this option allows you to finance it. However, this means that you will need to pay an interest for the amount you borrow. Although this may turn out to be more expensive than paying in cash, since the project is likely to increase the market value of your property, paying the interest may be worthwhile.

When you apply for a home improvement loan, lenders pull your credit as a part of the approval process. This is called a hard inquiry, which may temporarily lower your credit score by a few points. However, at Lendvious, we never do a hard inquiry. So, checking your loan offers with lenders through Lendvious will not impact your credit score in any manner. But once you accept a lender’s loan offer, the lender may make a hard enquiry as part of the approval process.

Lendvious offers unsecured loans for home improvement. These loans do not require any collateral and can be availed through a simple online application. Lendvious brings you loan offers from multiple lenders and makes it possible for you compare and choose the one that best suits your requirements.

In general, all types of home improvement loans involve the following fees:

• Origination fee- This is paid to the lender for processing the loan. This is usually a fixed percentage of the amount you borrow. Most lenders roll this fee into the loan balance. For personal loans the origination fees typically range between 1% and 6%. However, some lenders waive this fee for borrowers with a very good credit score.
• Late fee- In the event of failure to make your payment on time, some lenders charge a late fee which may be anywhere between $15 to 5% of the payment due. There may be a grace period of 10-15 days before this fee is charged.
• Returned Check fee- Apart from the fees mentioned above, some lenders charge additional fees for returned checks. Returned check processing is a time-consuming process for lenders and therefore it may attract a penalty.

Some lenders may have specific stipulations on what purpose the money from a home improvement loan is utilized for. But usually, the funds from this loan can be used for a variety of home improvement projects ranging from structural improvements that are intended to bring security and long-term stability to the house, installation of energy-efficient windows, appliances, and other fixtures, making renovations and repairs such as installing a new roof, replacing floors, refacing cabinets etc., or for home expansion, which may include addition of a room or a pool.

Once you’ve applied for the loan, lenders typically review your financial profile and compare it with your loan requirements. This process involves evaluating your property, verifying your financial information, collection of supporting documents, etc. While some lenders may take a week or two to approve your loan, at Lendvious, your loan can get approved within a day.

A number of lenders offer loans to facilitate home improvements. You can now easily apply online for a home improvement loan. Go to Lendvious and click ‘Check Your Loan Offers’ to get the best loan offers from multiple lenders!

• Government-issued photo ID of borrower and co-borrower
• Income proof (typically your payslip)
• Documents supporting property ownership
• Documents for verification of employment and W2s