What is a Home Improvement Loan?

Got big dreams of an updated kitchen or adding on to your home? Home improvement projects get expensive fast, and it’s a lot to expect to finance all of it from your savings account. If you have a project you’re ready to undertake, finance it with a home improvement loan!

Types of Home Improvement Loans

Home improvement isn’t its own loan type, but rather is the name used when you need to tackle projects around your home. The types of loans you can get under this umbrella are:

  • HELOC
  • Home Equity Loan
  • Personal Loan

There are pros and cons to each, so choose which one is right for you.

HELOC

A HELOC, or home equity line of credit, is using your home’s equity as collateral. This is a low-cost and flexible option for projects that have a fluctuating budget. Consider this almost as your home-specific credit card type of loan and the way it’s used.

Home Equity Loan

This is a secured home improvement loan type that also uses your home’s equity as collateral. The difference between this option and HELOC is that you get a lump sum and pay it back in even installments.

Personal Loan

Your credit score and income will determine whether you qualify for a personal loan. This is an unsecured loan option that doesn’t risk losing your home if you can’t make the payments. However, the interest rate will be higher compared to the options above.

Each of these options will finance your project and bring you one step closer to your dream home.

Why You Should Get One

There are two big reasons why people get home improvement loans. The first is due to unforeseen circumstances, like leaks in the roof. When something fails in your house without notice, it can be difficult to be prepared for it financially. Home improvement loans help get you the financing you need to fix your home.

The other reason is… you want to improve your home! Shocker, right? Make your dreams come true with:

  • A new roof
  • New furniture
  • A kitchen remodel
  • A home addition
  • Building a new garage
  • Whatever your home needs!

Home improvement loans are a great way to fund home upgrades, repairs, and improvement projects. Ready to make your dream home a reality? Start weighing your options: https://partners1stcu.org/borrow/home-equity