Home improvement loans are readily available at credit unions across the U.S. Before you apply, though, you should know these debt products are simply personal loans marketed as a solution to cover the costs of repairs or renovations.
They generally come with a fixed interest rate and a repayment period of up to 15 years. But are they the best option? Read on to learn more about credit union home improvement loans and an alternative that’s flexible and unlocks more borrowing power.
Home Renovation Loans
What is a Credit Union?
A credit union is a not-for-profit entity that focuses on serving its members. Credit unions offer many of the same financial services as banks but are member-owned and pass cost savings on to account holders through lower interest rates.
Credit unions are insured by the federal government through the National Credit Union Administration (NCUA) and backed by the U.S. Treasury.
Credit Unions vs. Banks: The Differences
Wondering how credit unions differ from banks? Here’s a quick breakdown:
- Business structure: Credit unions are not-for-profit organizations, and banks are for-profit organizations.
- Ownership: Credit unions are owned by members who can provide input and aid in decision-making, but banks are owned by profit-driven investors.
- Core focus: Credit unions focus on the financial well-being of their members, and banks hone in on profits.
- Location: Credit unions have branches and ATMs within local areas, while banks generally have locations nationwide.
- Online banking: Most credit unions offer online banking, but you may find that banks have more vast online resources and capabilities.
The Benefits of Using a Credit Union for a Home Improvement Loan
Unsure if you should use a traditional bank or credit union to get a home improvement loan? You may want to consider a credit union as many offer better interest rates, lower fees, and more flexible loan solutions. It’s also likely that their customer service will be superior to that of a traditional bank due to the member-owned structure of credit unions and employees who are there to serve and not simply turn a profit.
Home Renovation Loans
Credit Unions Offering Home Improvement Loans
A home improvement loan refers to any debt product you get to cover the costs of home repairs and upgrades. The most common form of home improvement loans is unsecured personal loans. Consumers also use cash-out refinances, home equity loans, home equity lines of credit (HELOCs), credit cards, and government loans to pay for home renovations.
Are you considering a credit union to secure funding for your home renovations? Below are some home improvement loan options from credit unions that are worth considering.
If you want to save time on your applications, you can apply only once through RenoFi, as they partner with these credit unions. They will also help you through the process to find the right solution to fund your home renovations.
Vibrant Credit Union
Vibrant Credit Union offers the following home equity loan products:
- A 10-year fixed-rate home equity loan
- A 5-year fixed-rate home equity loan
- Home equity line of credit (HELOC)
It only takes 20 minutes to complete the application, and you’ll need to provide paystubs and W-2s, employment information, bank statements, and proof of homeowners insurance. The good news is an appraisal generally isn’t required, which expedites the process. If you’re approved for a loan or line of credit, expect to receive your funds within two to six weeks.
Ardent Credit Union
Headquartered in Philadelphia, Pennsylvania, Ardent Credit Union offers renovation loans through RenoFi from $20,000 to $250,000. This flexible funding solution allows you to borrow up to 95 percent of your home’s after-renovation value, minus the outstanding balance on the mortgage.
The Ardent Home Renovation Loan starts as a line of credit with a two-year draw period. Upon completion of your project, it converts to a low-fixed rate loan with a 20-year repayment period. There are no prepayment penalties, so you can repay what you owe in advance without incurring additional fees.
It takes around 30 days from start to finish to close your file and receive funding.
Valley Strong Credit Union
Valley Strong is a credit union that operates in California state. It features home equity loans to finance home renovations, vacations or consolidating debt. Their Powerhouse Loan is a home equity loan with low fixed rates and application fees, no prepayment penalties to get a one-time lump-sum of the total loan amount.
Valley Strong Credit Union also offers a Prime Equity Line of Credit, a HELOC with competitive rates, flexible terms, no transaction or annual fees and a low application fee. If you choose to apply online, your application fees will be waived.
FedChoice Federal Credit Union
FedChoice Federal Credit Union started back in 1935 as IR Federal Credit Union offering savings accounts and personal loans, officially becoming FedChoice Federal Credit Union in 2005. Today, they have almost 25,000 members looking to manage their financial day-to-day and future needs.
FedChoice Federal Credit Union offers a Smart Choice Home Equity Loan, a Classic HELOC and a Gold HELOC and a Home Renovation Loan to borrow money against your home equity.
How RenoFi Partners with Credit Unions Offering Home Improvement Loans
RenoFi is an innovative platform that connects borrowers with credit unions, like Ardent Credit Union and Vibrant Credit Union, to help fund their renovations. Unlike traditional home improvement loans, RenoFi Loans allow you to borrow up to 90 percent of your home’s after renovation value, tremendously increasing your borrowing power. Their loans are distributed by credit union partners in the network who pride themselves on offering flexible loan solutions with competitive rates.
Benefits of Using Renofi to Get a Credit Union Home Improvement Loan
Beyond increased borrowing power and low rates, RenoFi loans offer many perks to homeowners, including:
- Streamlined Application Process: RenoFi does not require inspections or draws to close a loan.
- Dedicated Support: Applicants are assigned to a dedicated RenoFi Advisor to walk them through the process from start to finish.
- Extended Loan Terms: You could get up to 20 years to repay your loan.
- Competitive Interest Rates: RenoFi Loans feature some of the lowest home improvement loan rates available on the market.
- Flexible Solutions: You can get a loan for a home you currently own or plan to purchase soon.
- Exceptional Customer Service: RenoFi boasts a five-star average on Google reviews.
How to Fund Home Renovations with RenoFi
RenoFi makes it easy to get the funding you need for your home improvement project. The first step is to determine if a RenoFi loan is suitable for you by using the Loan Calculator. You’ll be prompted to enter your zip code, current home value, loan amount, the projected value of your home after renovations are complete, and your outstanding mortgage balance. Upon entering this information, you will be directed to a screen that displays estimated payments and rates.
If you want to move forward, use the self pre-qualify tool to indicate your interest. RenoFi will also assign an advisor to you to help decide what loan is best. In the meantime, you want to begin gathering the list of documents the lender will need to process your application. Once you’ve gathered everything you need and selected a loan product, you will apply directly with the lender.