10 Tips To Get Affordable Personal Loan for Home Improvement - TGUC Financial

If you are planning to get a personal loan for home improvement projects, you will have to find a way to plan your budget. Unsecured personal loans are the best way to renovate your home. Your home improvement plan may vary, such as a kitchen addition, a bathroom addition, home automation, roofing, installing electrical appliances, or adding luxury items. Whether it is a minor or major renovation, it should be a profit to homeowners.

Secured and Unsecured Loans – Types of Home Improvement Loans

There are two types of home improvement loans a homeowner can borrow: secured and unsecured loans. Before you apply to finance your home improvement projects, homeowners should check the requirements of each loan. If you have an excellent equity percentage and credit score you can borrow secured loans like the home equity loan, an equity line of credit, or the cash-out refinance.

A home improvement grant by the Federal Housing Administration (FHA) doesn’t require an equity percentage, but homeowners have various limitations in these grant programs by FHA.

Related: Loans vs Grants for Home Improvement – Which is Best?

What Is a Personal loan for Home Improvement Loan? – Personal Home Improvement Loan

A personal home improvement loan is a loan borrowed by homeowners to renovate and repair their house without equity percentage and collateral. In simple terms, homeowners don’t have to borrow money against their property. This unsecured personal loan doesn’t have a lot of requirements, like a higher credit score, a high equity percentage, or the need for various income sources.

Borrowing a personal loan for a home improvement project is the best option compared to home equity loans, home equity lines of credit, cash-out refinancing, and other financing options because these options have a lot of limitations. There are many personal loan lenders and homeowners should consider many factors to choose the best. This article will help you with 10 effective steps to choose the best personal home improvement loan lender for you.

10 Effective Tips to Borrow Personal Home Improvement Loan

While borrowing a personal loan from lenders, you will first have to check the fluctuating interest rates, the prepayment fees, the loan terms, and other limitations. Some home improvement loans are only applicable for emergencies or small repairs. So if you are planning on a large renovation, you should consider the limitations, too! Let us look into 10 effective tips to get an affordable personal loan for your home improvement.

1. Origination Fees

Some personal lenders will ask for origination fees before borrowing the amount. An origination fee is a sum of the amount charged by the lender before giving the loan amount. Asking for an origination fee is not really a bad idea, but homeowners should check the amount before paying it. An origination fee should not be more than 0.5% to 1.5% of a loan amount.

If an origination fee exceeds more than 1.5%, a homeowner should check APR and compare it with other financing options. It is always a better idea to compare the origination fees of different personal loan options before signing up.

2. Check Minimum Credit Score RequirementsPersonal Home Improvement Loan

You have planned an excellent home improvement project, so what is the next step? Is it checking your budget and credit score? A credit score is significant to borrow for your home improvement, but you don’t have to maintain excellent credit scores to get a personal home improvement loan.

Having an excellent credit score might be an intimidating requirement for homeowners. Checking the minimum credit score requirements is necessary before applying for a home improvement loan. There are many affordable loan options where online personal loan lenders offer home improvement loans to borrowers with a low credit score.

3. Fixed Interest Rate and Monthly Payments – Fixed Rate Loan

Interest rates vary for different home improvement projects. But in secured loans, the interest rates might fluctuate. When you borrow an unsecured personal loan, checking interest rates and fixed monthly payments are necessary.

Renovating your home is one of the best ways to increase the value of your property. But, if you pay higher interest rates and monthly payments, your interest rates may exceed the increased value of your home. In the home equity line of credit option, the interest rate may fluctuate based on your home equity percentage. Before applying for a loan for home improvements, homeowners should check the interest rates and monthly payments.

4. Check Loan Limitations

As we have already discussed above, home improvement projects vary from minor to major renovations. Some online lenders will only offer loans for minor renovations, like plumbing. If you have major repair or renovation works, you should check the limitations before opting for that financing option.

Personal loans don’t usually have a rigid geographic location requirement, like FHA grant programs, but checking geographic limitations is also wise before applying for a loan. If you are planning to renovate your home in an urban area, you should check with home improvement loan lenders. Some lenders limit their renovations to rural areas and minor renovations. 

Homeowners Can Get Loans without Geographical Restrictions!

Are you looking for a personal loan for home improvements without geographical restrictions? Well, you can now renovate your home with personal home improvement loans from TGUC Financial!

TGUC Financial offers home improvement loans for Wisconsin, Florida, and Utah. If you are planning to renovate your home in Wisconsin or Utah, TGUC Financial will find you the best home improvement contractors near you and offer loans with minimum requirements. Florida home improvement loans are also beneficial for homeowners to find remodeling contractors with affordable loan terms.

5. Prepayment Penalties

You have now checked the interest rates, origination fee, and loan limitations. What is next? Checking the prepayment penalty should be next on the list. If you don’t know what a prepayment penalty is, you might have missed an important factor to check before applying for a personal loan.

A prepayment penalty is an amount charged by the loan lender if you pay interest rates initially without any delay, a lender might charge a prepayment penalty. Most of the online lenders benefit from the interest rates, if you pay the amount early it might be a financial loss for lenders. 

Homeowners should check prepayment penalty details before borrowing a loan. A prepayment penalty is not necessarily bad, but you should check the amount before applying for a home improvement loan. In a nutshell, prepayment penalties shouldn’t break your budget.

6. Documentation Process

Homeowners don’t have strict requirements in the personal loan option. In other financing options, checking the credit score, equity percentage will be time consuming. In a personal home improvement loan, one can easily get approval with minimum requirements like income verification. When you have decided to apply for a loan, checking the documentation process is necessary to know about the requirements.

Sometimes, you might have an emergency repair and need the loan approval immediately. Checking the documentation is necessary to analyze the credibility of loan terms. When homeowners apply for a personal loan, checking the documentation process will eliminate a lot of risks and speed up the process.

7. Credible Loan Funding

Many online lenders check your credit report, verify your income, and have various other requirements to qualify you for the loan term. In the same way, homeowners should also check the credibility of personal loan lenders before applying for a loan.

Checking the license of the lender, and their past home improvement projects will pave a way for you to decide whether you can apply for a loan or not. Credible loan funding should not make you fall into debt.

8. Repayment Terms

Homeowners should check the repayment terms before borrowing loan amounts from a lender. Formulating a plan to repay your loan is effective to manage your budget.

Without planning your repayment terms, it is difficult for homeowners to decide on the amount to pay. Homeowners should calculate the minimum loan amount for the renovation and remodeling works. In the same way, strategizing a way to repay your loan and the maximum time period to pay it is also necessary. After deciding on the maximum period, homeowners should also check with the loan lenders about repayment terms.

9. Loan Purpose – Deciding on Renovations

You have now checked everything! Have you decided on the purpose of your home improvement loan? If you are borrowing a loan for large renovations, did you check the types of renovations and calculate the budget?

If you are borrowing a kitchen or bathroom remodeling loan, you may need a lump sum for remodeling works. Kitchen and bathroom additions are large renovations and require a good amount of money. Homeowners need to analyze the loan purpose and remodeling works before they apply for a personal loan.

10. Personal Loans with Additional Advantages

Comparing different personal loan funds with loan amounts, credit history, and minimum requirements is important. It is always a great idea to compare the best home improvement loans. A lot of personal loan options give you additional advantages like finding the best home remodeling contractors with good background checks.

TGUC Financial will find you the best home remodeling contractors near your location with valid licenses and credibility checks. After applying for a loan, finding the best home improvement contractors is another challenging job! TGUC Financial will reduce this time-consuming task for homeowners.

Summing Up

If you have planned to renovate your home, you should never have to delay it due to financial reasons. The personal home improvement loan option is the holy grail for homeowners. Homeowners will most likely be able to get affordable home improvement loans with minimum requirements with this option.

With TGUC Financial, getting qualified for a home improvement loan is not a challenging task. Homeowners just have to follow three steps to qualify for the loan. If you have decided to renovate your home, don’t postpone it!

Frequently Asked Questions

Can you add furniture with a home improvement loan?

Yes, homeowners can add luxury furniture items for home renovation works with a home improvement loan. Home improvement loans are not only for remodeling and repair works. If you are planning to add luxury items, you can get a home improvement loan.

What are the disadvantages of personal home improvement loans?

Not borrowing money from a credible source is the main disadvantage of a home improvement loan. The interest rates and loan terms will fluctuate if you are not thoroughly checking the online lenders you are interested in before you apply.

What are the maximum loan terms for home improvement loans?

25 years is the maximum loan term for home renovation loans. If you are repaying a loan for more than 25 years, it might exceed your increased home value.