Remodelling your home can be an exciting but exorbitant undertaking. If the money you can allocate towards your project is not enough to cover all the expenses, no worries. At IGD Building we now offer home renovation financing through our partner's services.
Take a look at the various types of home improvement loans in the UK available to you via iDeal4Finance. Learn how to start the application process and what factors to take into account as you explore your options by clicking on the image below.
How to Apply for Home Renovation Loan
IGD Building services ltd is an Introducer Appointed Representative of Ideal Sales Solutions Ltd, t/a Ideal4Finance.
The application process with iDeal4Finance is easy and simple, although the process may vary depending on the borrowing options you choose. Whether you go with secured loans or unsecured loans, they will assist you with the process.
You can apply online in a matter of minutes and get an instant decision. All you need is a phone, tablet, or computer to gain quick access to the platform. You will receive a rapid response with a personalised offer. In order to further advance your application, you have to fill in the details of the loan at https://ideal4finance.com/igd.
Don’t forget to input your phone number and email address in the form so that the team can get in touch with you after evaluating your application. You may get a personalised rate.
How Do Home Renovation Loans Work?
This is a type of loan you take to finance your home improvement projects in Surrey. What is interesting about it is that it’s based on the value your home is going to have after renovation rather than its current value. It can either be a separate loan or form part of your mortgage plan.
Home improvement loans work great for your refurbishment projects. They can fall into the categories of secured and unsecured loans. Unsecured loans typically don't require collateral. The same doesn't apply to an unsecured personal loan.
Personal Loans | Unsecured Loans
You can use a personal loan for house renovation. It is a type of unsecured loan that is based on your income and creditworthiness. No collateral is needed.
There are different interest rates and they vary depending on various factors including but not restricted to your credit score and your personal circumstances.
Home Equity Loan
A home equity loan is a type of secured loan that requires you to put your home as collateral, unlike an unsecured personal loan. It comes with fixed terms and rates. The loan amount you can borrow depends on the equity of your home.
Hence, if you have good equity in your property and need a big amount of money for your project, you should consider this type of house renovation loan.
Home Equity Lines of Credit (HELOCs)
This is another type of secured loan. HELOCs are based on the equity of your home too. But there is a big difference. They can be used more like a credit card and there is a certain limit to which you can draw funds.
When it comes to interest rates, they vary. This goes for the terms as well. The borrower has to use their property as collateral to borrow more money. Mind you that if you don’t pay off your instalments on time, you risk losing your home.
Cash-out Refinance
This is a type of mortgage refinance that gives you the opportunity to borrow more money than what your current mortgage balance is. The excess funds can be used for your kitchen renovation, a new bathroom, or other makeovers around the house.
This option usually comes with lower rates of interest, which explains why it's so attractive to borrowers. It doesn't add much burden to your existing loans.
Credit Cards
If you are dealing with a small home renovation, using your credit card to fund renovations might be a much better option than taking out a loan. That being said, you should use it with caution.
The reason for this is it comes with a lot higher rates than other types of loans. Don’t forget that failing to pay the balance will affect your credit rating in a negative way.
That’s why you want to use this method only for smaller renovations where you can quickly pay off the loan amount. For example, it can come in handy for a new kitchen makeover, a new bathroom, or even new kitchen appliances.
You can evaluate your repayments and any additional costs using an online calculator.
Home Improvement Loan Calculator
If you want to calculate your interest rate, payment terms, and other details regarding your loan for house improvement, one option is to stick with an online home improvement loan calculator.
Normally, you need to provide certain details like your project budget, loan term, and interest rate. It will show you the total amount you need to pay. Still, the best way to learn the total cost is to ask for a personalised quote from iDeal4Finance.
Factors to Consider When Choosing a Loan for Major Renovations
Landing on the right renovation financing option is crucial for your financial stability as well as the outcome of the project. You should take into consideration several factors before you make that decision. Here are they.
Home Improvement Loan Interest Rates
Interest rates are a key. The lower the interest rate, the more money you can save over a longer period. For this reason, it’s vital to try and get the most optimal rates possible.
If possible, ask for a fixed rate. This means your rate will stay the same throughout the home improvement loan term. And the best way to do that is to shop around. Don’t just accept the first offer you come across. Instead, take the time to compare home improvement loans.
Home Improvement Loan Repayment Terms
This is another variable related to a home improvement loan. Normally, when the repayment terms are longer, you can negotiate smaller monthly repayments and if you have shorter payment terms, your monthly repayments will be significantly higher. Depending on your home improvement finances, you have to decide which of these fits you best.
Home Improvement Loan Fees
Do familiarise yourself with the full terms and conditions of your loan for there may be additional fees that should be mentioned upfront. Since you can never be convinced of that, take a good look at the fine print and make sure you understand everything about your home improvement loan.
Collateral on Home Improvement Loan
As mentioned above, some loans require collateral to secure the loan. This could be your car or your property and it usually means lower interest rates. However, keep in mind that unless you make monthly loan repayments on time, foreclosure may be initiated on your property. As a result, you could lose your home.
If you don’t want to provide collateral upfront, you can get an unsecured home improvement loan. But you should remember that it has lower borrowing limits which will affect the amount of money you can afford to use for your home renovation.
Not to mention, an unsecured loan also offers higher interest rates. By the end of the terms, you will have paid a lot more than necessary.
Credit Score for Your Home Improvement Loan
The interest rate and the type of loan for home improvement you are able to borrow will largely depend on your credit score. A good credit rating allows you to negotiate better terms for your loan. By contrast, a bad credit score is not in your favour, so if you are dealing with such, you should work to improve it before you can apply for a loan with us again.
Evaluating Your Own Financial Situation for Home Improvement Loans
Here are some tips to consider when evaluating your financial situation for your home renovation loan.
Calculate your budget. Before you proceed with your home improvement loan application, you want to determine a budget for your project. You have to know how much money you are going to need. This way, you can select a loan type with monthly payments and repayment terms that fit you the most.
Check your score. If you aren’t aware of your credit score, check it out. A good rating can help you negotiate better terms for your home improvement loan. It may also help you get a smaller interest rate. If necessary, work on improving the score.
Compare your home improvement loan options. It goes without saying, before you apply for any loans, research and compare deals. Check out fees, monthly repayments, and loan rates. There are plenty of options these days, don’t settle for the least lucrative one. You can use a calculator to help you get an idea of your overall costs.
Plan for unexpected expenses. We can’t stress how important this step is. When you embark on a home renovation project, be it a new kitchen or loft conversion, there will always be unexpected expenses. You should account for them in your budget ahead of time.
In fact, you should set aside some 10-20% of the total cost of the makeover to use in emergencies. Your home improvement loan could provide a higher borrowing limit to cover these costs.
Understand the terms and conditions of your home improvement loan. An even more important step is to acquaint yourself with the terms and conditions of the loan and take the time to understand them. Don’t miss out a single detail.
We also provide financing options for bathroom installation and renovation and kitchen renovation financing options as well.
FAQ on Home Improvement Loan
Can first time home buyers get a renovation loan?
Of course. These are special types of loans designed for this that you can take advantage of such as home improvement loans.
Can you get personal loan with a bad credit?
It is possible to have a personal loan or additional borrowing with a poor credit score and no bank account or online banking. Be that as it may, you should keep in mind that this might result in higher fees and interest for you. You should also consider covering for your existing loans.
Can I get a bank loan for a house renovation?
Yes, you can. There are a slew of options like personal loans and home equity loans that are made specifically for home improvements. If you have decided to make your home more energy efficient and reduce your energy bills, a loan will help you get there pretty soon. Check to see if your online banking offers such an option or directly take out a loan with us.
Can you pay off your home improvement loan early?
Yes, absolutely. Technically, you will pay both any interest that's due and your outstanding balance. In most cases, you can pay off your existing loans for home improvements early and not get a prepayment penalty.
Of course, this will depend on the terms and conditions of your current loan. Always go through them to verify you indeed can pay it early. If you are not sure, consult a specialist.
Which are the best loans for home improvements?
It depends on your unique situation. The two main things you need to take into consideration include the size of the renovation job and your credit rating. Home equity loans might be a great option for some and the worst option for others.
What is a refurbishment mortgage?
This is a type of mortgage that is designed specifically for home renovations. These loans offer money that enables you to fund renovations or purchase a property. If you want to get a home improvement loan, you have to check your credit history.
What is bridging loans, Surrey?
A bridge loan is a type of loan that you usually take for a short term, spanning 2 weeks to 3 years. It's also called a swing loan and it covers an interval between two transactions.
For example, if you are in the process of selling your property and buying another one, you may be able to borrow a bridge loan to help you go through with it. Home improvement loans work great for this.
Which is the cheapest home improvement loan?
The cheapest loans would be zero-interest loans or a 0% APR offer. If you want to get a home improvement loan in the UK to fund home improvements, you can obtain better terms if you shop around.
What is the difference between personal and representative APR?
A personal APR is the rate that the lender calculates for you based on several factors. These include your financial situation, how much money you are willing to borrow, as well as your credit history.
Keep in mind that this rate will probably be different to the representative one.
A representative APR is the loan rate that the lender must advertise to at least 51% of applicants.
How much money do you need to renovate a house UK?
It depends on the size of the project. The overall cost varies anywhere from £76,900 to £138,800. Whatever improvements to your home you plan to make, a loft conversion or kitchen redo for energy efficiency, a home improvement loan could help you achieve your goal.