Home improvement loans let you finance the cost of home upgrades or renovations for up to 30 years. Although the interest rates are usually a lot lower than new-car loans, it’s still one of the most popular types of loan. There are several types of home improvement loans:
Building loans are also an option that you can use to finance the cost of your home’s construction or improvement. These loans usually require a down payment that typically ranges from 3 percent to 5 percent.
Refinance loans are also an option for those with credit scores between 600 and 850. You can take out these loans to refinance your existing mortgage for lower interest rates. These are considered the least-risky way to get a mortgage.
On the other hand, there are even more options for those who have higher credit scores, and even mortgages available for sale with lower interest rates. These include:
We’ve taken a look at the more traditional and the less-traditional home improvement loans available today. From a fresh perspective, you can see what factors impact the return on investment for homeowners and how you can calculate how much money you stand to make from home improvements.
Home equity loans and personal loans are the most common types of home improvement loans, but there are other options, such as cash-out refinancing. Banks, credit unions and online lenders may offer home improvement loans.
If you’re looking for a way to pay, you’ll first need to understand how a home improvement loan works and compare financing options. This guide covers home improvement loan types, costs, qualification requirements and steps to choose the best home improvement loans.