What Is a Home Renovation Loan and How Does It Work?
Description If you are about to embark on a home remodeling project, then you may want to look into getting a renovation loan. Click here for everything you need to know.
You’re working hard on the home renovation project that you’ve been waiting to do since the day you closed on the property. Heck, you’ve even taken time off work to get the job done.
But as you’re attempting to replace the countertop, you’re hit with a startling realization. Your home remodeling project is about to become way more expensive than you could have expected. You’re not just adding a snazzy new design – you need to replace your whole kitchen island.
How will you fund it? Where will you get the money on such short notice? Keep reading to find out how home renovation loans can give you the last-minute financial help you need.
What Is a Home Renovation Loan?
If you’re like most people, chances are that you’ve heard terms like “personal loan” or “commercial loan” being thrown around in the past. But the whole idea of a home renovation loan may need a bit more refining.
According to the 2021 Home Upgrade study, it’s estimated that 24 percent of American homeowners had plans to renovate. But for all the people who might be fantasizing about kitchen upgrades and basement flooring, there’s one thing that consistently stands in the way of people’s dreams: money. On a very real level, paint, equipment, and fixtures can all cost a lot of money to upgrade and replace.
A home renovation loan is a personal loan that you can use to get extra money for your home remodeling project. In a world where a few hundred dollars could be the difference between “Eh.” and “Wow!”, these loans have the potential to be a financial lifesaver.
Should You Get a Home Renovation Loan?
For some people, loans might as well be a financial kiss of death. If you can take the least amount of credit possible, the reasoning goes, you can set yourself up for success. But by our count, there are at least three strong reasons to pursue a home renovation loan:
You Can Manage Your Finances More Easily
For most people, the planning stage of a renovation is almost as difficult and time-consuming as the actual remodel. You have to plan your project, you have to book and hire experts, and then you have to set a budget. In short, it’s a lot.
In business and investing, there’s a concept called cash flow. The basic idea is that even if your company is making sales, your business could still be in a bad place financially.
Why? Because having pluses in the money column doesn’t necessarily mean that you’re swimming in money – you also have to factor in the gap between the sale and the money’s appearance in your bank account.
If your bathroom renovation goes sideways and a plumber has to be called in, there could be a substantial bill added to your renovation costs. And with so many Americans being forced to budget carefully, making an unplanned dip into your savings could have serious financial consequences. Home renovation loans mean that you don’t have to be making these types of hard choices.
They’re a Great Source of Fast Funding
Let’s say you’re in the middle of your renovation. The project is going well and things are moving forward at a good clip. But right when you’re about to have a moment of “Oh my gosh! I am about to finish this!”, you suddenly run out of money.
If you’re planning to sell the house in the near future, this setback could put a wrench in your plans. Very few potential buyers will step over dust, swinging hinges, and exposed pipes and then say, “I’ll pay you top dollar!”. They want to picture themselves hosting backyard barbeques, hanging Christmas lights, and arriving with little more than a few suitcases in hand.
Home renovation loans make it possible for you to get the money you need in record time. All you have to do is apply.
You Don’t Need to Secure It
When it comes to the whole unsecured loans versus secured loans debate, you’ll run into a lot of conflicting financial advice. Some people will swear by secured loans because they’re typically associated with low-interest rates and favorable repayment terms.
So what’s the problem? If you miss a payment, your creditors will be able to take possession of your property.
One of the selling points of home renovation loans is that you don’t have to take out a line of credit to get approved. All you have to do is take out the loan and then pay it back.
What Do You Need to Qualify?
So let’s say you’ve read all of that and you’re totally sold on getting a home renovation loan. In fact, the only question you have left is, “Where do I sign up?”. The criteria laid out in the Plenti Renovation Loan application process includes requirements like:
Being over the age of majority
Having a reliable source of income
Being a citizen or a permanent resident
Having a driver’s license
And these standards are pretty common. There are no lengthy requirements or insane standards of approval for a home renovation loan. While your credit rating can affect details like your offered rate or the amount that you’ll be allowed to borrow, this is a well-established method of getting fast funding for your remodeling project.
Use Loans to Finance Your Home Remodeling
They say that money makes the world go round. And when you’re trying to complete a home remodeling project on a tight deadline and a shoestring budget, it can be hard to get your house to match the inner vision that you have for it. From home maintenance projects to major upgrades, a home renovation loan can make it all possible.
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