If you have a good credit rating then you might want to consider a personal loan to access funds to make home improvements. Personal loans typically do not require collateral and are extended based on the lender’s confidence that you will repay the loan in the designated time allotted. It may be a good idea to check with your existing bank or credit union since you already have a relationship with them.
Be prepared to provide the loan officer with documentation to support your reason for needing a loan as well as documents (such as pay stubs or income tax returns) that show your income level and ability to repay the loan. If you have bad credit, you may still be able to secure a personal loan but the interest rate will probably be much higher. Also, keep in mind that unlike a home equity line or credit (HELOC), a personal loan for home improvement is not tax-deductible.
Even if you are able to obtain a personal loan for home improvements, you need to be prudent when deciding how to spend the money. When hiring a contractor, make sure you comparison shop, check credentials and ask for references from past customers. Taking the time to call can save you a lot of frustration, aggravation and money if you find out in advance that the contractor did not complete a job on time or within budget.
Make sure you are using a licensed and bonded home improvement contractor. Just because a person advertises his services and says that he is an expert does not mean that he is licensed and honest. A tradesman may not necessarily be a licensed contractor. Licensing requirements vary from state-to-state with some being more lenient than others. In addition, some states have additional home improvement requirements for working with asbestos, mold, or other hazardous materials.
Securing a personal loan for home improvements can be a rewarding experience and can help make your home more marketable but take care to negotiate payment terms that you’ll be able to meet and use caution in finding people to help make the home improvements you desire.