Home improvement projects can be an expensive endeavor requiring years of savings to accomplish. According to Statista, the U.S annual remodeling expenditure totaled $328 billion by the end of 2019. Despite these statistics, many homeowners manage to complete their home improvement projects without much stress. And the key to their success lies in the financial support of personal home improvement loans.
Therefore, if you’re looking to renovate but are short on cash, we explore the benefits of a home improvement loan and why homeowners are using personal loans towards their home remodeling goals.
Easier to Obtain and Doesn’t Affect Home Equity Value
Personal loans are much quicker and easier to get compared to home equity loans, requiring tedious paperwork. Moreover, personal loans require only essential documentation, allowing homeowners to secure loans without burden.
The overall application process is straightforward, and once distributed, you have full access to your money without impacting your equity or HELOC loans.
Personal Loans Get Approved Quicker
Another reason homeowners opt for personal loans is their quick approval rate. This means that applicants can generally receive their loan decision within a couple of days instead of waiting for weeks.
The loan’s rapid turnaround time allows one to fulfill commitments and plan ahead of time, making it easier to renovate and secure resources on a tight schedule without any delay or insolvencies, especially when working with contractors with a strict time frame.
There’s No Predetermined Risk of Losing Out Your Home
Personal loans offer homeowners a means to settle their loans without risking their property if they default. Unlike HELOC or home equity loans, lenders cannot foreclose as the loan isn’t secured against your house.
This provides homeowners with a sense of relief as they can borrow as much as they need without the fear of losing their property. And if they can’t pay on time, they can request an extension and pay penalty fees until the renovation project’s borrowed amount is settled.
Homeowners Stand to Pay Fewer Fees Than with HELOC Or Equity Loans
Personal loans are a great benefit towards funding home improvement projects as they help keep financial expenditure low.
As such, these loans don’t include additional charges, such as appraisal, application, annual, insurance, filing, and mortgage preparation fees, thus allowing homeowners to manage their finances better without losing money when repaying the loan.
Better Financial Flexibility and Minimums
HELOC and home equity loans are restricted in terms of how much one can borrow. They provide a 10-year draw period with $10,000 being the minimum lenders are prepared to loan with some even willing to lend out $25,000 to $35,000 on home equity at the very least.
On the other hand, personal loans are fixed to your requested amount with the minimum one can borrow ranging from $1000 to $5000. This makes personal loans an excellent option for funding low-cost home renovation projects without borrowing more than needed.
Personal Loans Don’t Require Equity
Say you recently bought a house or don’t have enough equity to qualify for a HELOC loan, a personal loan provides a great alternative for homeowners to finance their renovation projects and build equity despite this problem.
With a personal loan, homeowners can enhance their home’s market value without tapping into their house’s equity. This in itself allows them to allocate their new equity towards other purposes such as their children’s college education or to cover expensive financial liabilities once their home accrues more value through high-return renovations.
Consider Personal Loans for Home Improvement
A home improvement project can be a profitable investment both financially and emotionally. However, if you lack the funds, a personal loan can provide the necessary pathway to renovate your home into your envisioned dream house.
Not only does a personal loan help get your house in shape, but it also provides better financial flexibility, allowing homeowners to remodel without the risk of losing their property on home equity or HELOC loans.
