Traditional home improvement loan sources can provide cheap finance but the use of the property as collateral may not be the wish of the borrower. Personal unsecured loans can provide as much money as regular secured loans for home improvements and do not imply the risk of repossession of the property. Thus, they offer the applicant the peace of mind he needs knowing that his house is safe.
Unsecured Personal Loans for Home Improvements
Unsecured personal loans can be used for almost any purpose; Home improvements are just one of them. The amount of money you can get depends mainly on your credit score and history. Since the amount of money you’ll need for home improvements usually ranges from a couple of thousands to tens of thousands, your credit score has to be at least “good" if you want to get approved with advantageous terms.
Nevertheless, there are lenders willing to offer loans for people with bad credit, but the interest rate you’ll have to pay for such loans will be considerably higher. Moreover, the repayment program won’t be too long so your monthly payments may be unaffordable. If your credit is not that good you’d probably do better waiting to improve it before applying for unsecured loans
On a side note, Unsecured Lines of Credit are a more flexible source of finance. An unsecured line of credit is a revolving source of funds which you can be used to finance purchases and services while repaying the money in a lither manner. This is perfect for those with non fixed income which can increase or decrease during the year and can’t commit to fixed payment programs.
Regrettably, being unsecured, these loans have rather strict credit requirements. Approval will be mainly determined by your credit score, thus, even though bad credit loans are available, those with worst credit have less chances of being approved. And even if they do, the loan terms won’t be advantageous.
So, if your credit is not that good, and you have a property you can use as collateral, it is best if you apply for a home equity loan for home improvements than for an unsecured loan. A loan decline will worsen your credit situation and can sometimes even ruin your ability to get finance through secured loans.
Nevertheless, there are some unsecured loans specially tailored for home improvements that due to having this purpose requirement, have less strict credit requirements because the lender knows for sure that the money will be used to increase the overall value of the debtor’s assets thus contributing to increase his odds of recovering the money borrowed.
Kate Ross is a professional consultant with fifteen years in the financial field. She helps people in the process of securing personal loans, mortgage, refinance or consolidation loans and prevents consumers from falling into financial scams. Smart tips and interesting articles on this subject and other financial related topics can be found at Speedybadcreditloans.com