Home renovation can be a costly affair. Refurbishing your house according to your taste can take up a lot of your time and also leave a hole in your pocket. This is why most people prefer a personal loan or a home improvement loan.
The key advantage of such loans is that they give you a chance to refurbish and upgrade your existing house as per your liking.
While both of them are among the go-to choices for most families, a personal loan can increase the odds of a smooth cycle of monetary help for all your endeavors.
Disadvantages of Home Renovation Loan
- Home improvement loans can only be taken under the name of the owner, i.e., under whose name the property has been registered. For example, if a property is registered under the name of a man who is aged above 50 years and close to retirement, it is difficult for him to avail such a loan. Also, his son or daughter cannot avail a home renovation loan as their names are not mentioned in the document.
- A home improvement loan only provides for the maximum limit of 80 percent of the work estimate.
- Many banks and cooperatives do not offer home renovation loans to buy furniture. Inspections will be made by the bank officials to make certain that you have not used the loan amount for anything else.
These complications can simply be kept away by opting for personal loans.
Personal loans for Home Renovation
Personal loans are unsecured loans (visit PaydayMe), i.e. the loan is given based on the creditworthiness of the borrower and does not require a collateral to be placed against the loan. It can be used for anything.
Personal loans are multipurpose loans that a person can use for any purpose without the fear of supervision of the bank officials.
None of the bank officials can question you on how you spent the loan amount. For example, if you borrowed $200 from a bank, the officials are not authorized to question you on the particulars of your expenditure. You can spend half the money on renovating and the rest on buying the furniture and interiors.
Also, the difficulty in the above case of home not registered under the name of the borrower could be resolved by a personal loan. Therefore, a son or a daughter can avail the loan instead of the parents, and they can repay the loan.
Advantages of Personal Loans
Unlike the designated loans like the car loan, mortgage loan, student loan, and a home loan, a personal loan can be the solution for any kind of problem.
Variety of Lenders
Personal loans can be borrowed from a range of lenders and traditional sources like credit unions, online lenders, and banks. On the contrary, Home loans are limited to certain traditional lenders who provide loans with collaterals.
Excellent Credit Score is not a Must
It is definitely possible to get access to a personal even with a bad credit score. You might have to pay higher interest rates, sometimes exceeding 35 percent.
Quick Loan Approvals
While home loans take at least a month for all the approvals and bank proceedings to end, it is possible to apply for a personal loan online and be sure of receiving an instant response. If the bank approves a personal loan, you can see the amount deposited in your bank account within a few days.
Wide range of repayment terms
Many lenders offer a variety of repayment modes and conditions for personal loans. They depend on the credit and the lender.
Despite a number of pros, personal loans also come with their share of cons. Personal loans are short term loans and hence they are usually given on high interest rates.
Nonetheless, check with your bank to know if you are eligible for a subsidized personal loan. That way you can get personal loans at much cheaper interest rates and longer tenures.
A good credit score also earns you a lower interest rate. A score above 750 grabs the attention of your banker. It is time you get credit healthy as banks have mentioned several times that an impressive credit score can help them shove off the interest rates of personal loans.
Your house is a mirror of your unique personality. It is important for everybody to customize their houses according to their likes and dislikes for a livelier stay at home. It also goes without saying that your house strikes quite a good impression with the guests who visit you.
Personal loans are the go-to if you need quick cash, however it is always wise to be fully aware of what you are getting into. So, verify all the terms and conditions before you sign up for a personal loan and relish your home renovation!