Best Small Home Improvement Loan

What Is The Best Way To Get Money For Small Home Improvements?

There are many ways to obtain money for a home improvement loan. If you are looking for a small home improvement loan, some options may be better than others. 

For example, typically, when homeowners are in need of a large amount of money to make home improvements, secured loans like a home equity loan or home equity line of credit are the best options. Secured loans can offer larger loan amounts at lower rates in exchange for collateral such as your home. 

However, when you want a small home improvement loan, the best way to get money is through an unsecured home improvement loan. When you take out a home equity loan, you need to pay closing costs as well as other potential fees that make borrowing a small amount of money not worth it. There are no closing fees with an unsecured home improvement loan.

If you have decent credit and a stable income with a lower debt-to-income ratio, you could qualify for a small improvement loan of any amount you need and pay it back through monthly installments. 

Is It Difficult To Get A Small Home Improvement Loan?

Small home improvement loans are not difficult to secure, just as long as you qualify. To qualify, you should have decent credit and a stable income at a minimum. Requirements can vary depending on the lender, so don’t lose hope if you don’t qualify for them all. Oftentimes you can gather requirements before applying, although lenders are usually unable to deliver loan decisions without an official application. To find out if you qualify without impacting your credit, check offers at TGUC Financial.  

What Kind Of Loan Is Best For Small Home Renovations?

If you’re looking to complete a small home renovation project, like maybe a bathroom remodel or adding a mudroom, you may be looking to finance maybe $5,000 to $25,000 to cover the cost. For smaller loans, typically, a home equity loan where you need to pay closing costs and additional fees is not the best answer. Credit cards may be able to pay for labor and materials as well. However, the interest rates on most credit cards are exceptionally high.

The best kind of loan for small home renovations is a secured or unsecured personal home renovation loan. These types of loans are the best because you can receive the funding incredibly fast, you can choose your repayment period, and interest rates can be as low as 4.99% for borrowers with exceptional credit scores. 

How Can I Finance A Small Home Renovation Without Equity?

If you have little to no equity in your home, you may want to consider taking out a personal home renovation loan. Personal home renovation loans do not require any equity at all. To qualify for a small home renovation loan without equity, all you need is a decent credit score, a stable monthly income, and little to no significant debts.

When you apply for a personal home renovation loan, you can choose to apply for a secured or unsecured loan. For a secured loan, even though you do not have any equity in your home, you could still use other assets like a vehicle, a retirement account, or stocks and bonds as collateral to secure the loan. 

A secured loan typically comes with better interest rates and more favorable terms than an unsecured loan. The only thing is that if you happen to default on a secured loan, you could potentially need to forfeit the asset you used as collateral. 

An unsecured loan does not put any of your assets at risk. However, a default can result in a major blow to your credit score that can prevent you from obtaining credit in the future. 

What Can I Use A Small Home Improvement Loan For?

The best part about a small personal home improvement loan is that you can use the funding for whatever you need. You typically do not need the lender to sign off on your project idea before obtaining the money. That means, once you are approved for the loan and receive the funding, you can do any home improvement work that is in your budget, or if something else has come up, you could use the money to pay for an emergency car repair, a medical bill, anything you want.

Some of the most common home improvement projects for under $10,000 include the following.

• A modest kitchen makeover with new appliances, a fresh coat of paint, and maybe some upgraded light fixtures.

• A modest bathroom makeover with a new backsplash, some decorative mirrors, new faucets, and a new paint color.

• New flooring in one or more rooms depending on material cost.

• Installing a concrete patio or a modest wooden deck.

• Putting in a brand new concrete driveway.

You can do almost anything with a small home improvement loan as long as you stay within your budget.

Can I Use A Small Home Improvement Loan To Pay Off Credit Cards?

Yes, since a small home improvement loan is considered a personal loan, you are free to use the money as you see fit once you obtain the funding. If you would like to forgo a small home improvement project and pay off your credit cards instead, that is your choice. Often when someone takes out a personal loan to pay off credit cards, it is called a debt consolidation loan. 

What Credit Score Is Needed For A Small Home Improvement Loan?

Minimum credit score requirements for a small home improvement loan are set by the individual lender. Some lenders may prefer a credit score of at least 660 or 660, whereas others may be willing to work with a borrower with a credit score as low as 560.

Before applying for a loan, you should review your credit report. You can take advantage of credit monitoring programs to help you quickly identify ways you can boost your credit score. If you are on the cusp of a credit group such as good credit and very good credit, a little boost to your credit score can make a big difference. 

When you’re ready to shop and compare home improvement loan offers, knock on TGUC Financial’s door. With one application, you can check offers from our trusted lending partners. Once you find the right loan, you can even connect with contractors that can help you get the job done. Checking offers at TGUC Financial does not impact credit score, thus making it a smart starting point whether you’re totally committed or not. 

Start checking off your to-do list with a small home improvement loan. . . check offers online today!