Home Improvement Loans

A bad credit history may not stop you from getting the funds you need to improve your home.

There are a wide range of solutions available that can assist some people with bad credit, so you can still get the home of your dreams.

However, the options available may be more limited and the interest rates may be higher to balance the risk for lenders.

It’s important that you calculate all the costs you will incur to make sure that the loan covers these plans.

If not, you may find yourself in a situation where you need to borrow more money and may have to go through the whole process again.

Another factor that you might want to consider before applying for this solution is how long you want your repayments to be spread out by.

It could be that you want to pay the loan off as quickly as possible, so that you don’t have the financial burden hanging over you. In this case, a shorter repayment term may be suitable.

Alternatively, you might value being able to reduce your monthly repayments to make it more manageable, in which case a longer term could be more suitable. Whilst this can be useful, it’s worth noting that spreading repayments over a longer period can increase the total amount of interest you will have to pay.

The interest rates you are eligible for will depend on your lender. They will consider a variety of factors to determine how risky it is to let you borrow from them.

If you are considered to be a greater risk, a higher interest rate may be charged. On the other hand, if you are considered to be less of a risk, a lower interest rate may be charged.

Borrowing on a mortgage can be safe provided you meet your monthly repayments. It can become more risky if you start to struggle to meet your monthly instalments.

If you are consistently missing repayments and have no communication with your lender about the issues you are experiencing, they may repossess the property you have used as security.

However, if you’re transparent with your lender about why you’re struggling to make repayments, then they may be able to find a resolution to the situation at hand.

There are a few types of solutions you can get, which include secured finance or unsecured loans.

With secured home improvement loans, you will borrow money against your property. This means your home could be repossessed if you fail to make your repayments. However, this means lenders may be more flexible with their criteria, including loan sizes and terms.

Unsecured home improvement loans will not use an asset as security. This means your home is not at risk if you fail to repay. However, this means lenders may be less flexible with their criteria, so it can be harder to get accepted for this option. Therefore, you may require a good credit score to be eligible.

Both funding solutions can help you in a range of ways. It’s important that you weigh up each type to decide which one is suitable for your plans.

If you’re unsure it could be worth reaching out to a financial advisor who will be able to support you.

Check out a recent case study showing how we helped a client get a secured loan to expand their home with a double-storey extension.