A Guide to Cheap Home Improvement Loans

Cheap home improvement loans can help you make the home improvement projects you need without requiring you to pay for a lot of the expense up front and out-of-pocket. These loans generally are associated with lower interest rates, in large part due to the fact that they are usually secured against the equity of your home or other real estate. In addition to helping you to get a lower interest rate, this also means you won’t need to provide any additional collateral for your loan.

Cheap home improvement loans can be used to make repairs to your home or real estate, as well as financing expansions, helping with the construction of new buildings, or any of a number of other home improvement projects. The key to finding cheap home improvement loans is knowing where apply and what they’re going to be looking at when you do.

Finding places to apply

Banks, finance companies, and other lenders such as those who operate online are all good places to look for a loan. The best place to start looking for cheap home improvement loans is the bank or credit union where you already have established accounts or a past history.

These lenders typically have special offers for borrowers with other accounts, and because you’re a repeat customer you may qualify for an additional reduced rate. This doesn’t mean that you should always go with a previous lender, though. You should explore all your options before making a decision, so that you’ll always find the right loan for your needs.

Borrowing against equity

Home improvement loans base the amount that you borrow off of the equity of your home or real estate. Equity is the amount of the mortgage or home loan that you’ve paid off, so you have 100% equity if you have paid off your mortgage and own your home but have a lower percentage if you are still making mortgage payments.

The more equity you have in your home, the larger amount of money you’ll qualify for when you apply for your loan. You may also qualify for a lower interest rate if your equity is much higher than the amount you are requesting for your loan. Remember, cheap home improvement loans come from having high equity.

Three month credit repair

If you have bad credit or even okay credit, then you may want to consider taking steps to make it look a little better before applying for your loan. Credit problems can make cheap home improvement loans harder to find, and even though your credit can take years to repair there are ways to get results in as little as three months.

Begin by trying to pay off as much of your outstanding debt as possible in the months before you apply for your loan. Make all of your payments on time, and if lenders will allow you to pay more than the minimum amount due then by all means do so. After a few months have passed, you will have a series of positive reports in your credit history.

Potential lenders see this as you seeking to improve your financial situation, and are more likely to give you an encouraging result. If nothing else, then you’ve at least started to improve your credit situation and saved yourself money down the road. With a number of options for cheap home improvement loans and an improved credit rating, you should be able to afford the various home improvements you’ve always hoped for.