Personal loan, home equity: AdvanceSOS financial advisors share all about the renovation loan in this comprehensive guide.
Home renovations are a big deal: whether you’re making massive changes or modifying your home a bit, you’re sure to spend a lot of money on it. While it may seem stressful, there are plenty of tools to help you get through this process without worry. One of them is the home renovation loan, which allows you to receive the amount of money needed for your renovations and to repay the loan once you are ready to do so.
It is a quick, safe and very useful aid to finish the works you do at home. Nevertheless, before applying for a home improvement loan, you should know a little more about the whole process. That’s why we are here! At AdvanceSOS, we put all our expertise in the financial sector at your service to help you make the perfect choice for your situation.
In this article, we will cover the main aspects of home improvement loans in the United States. With guidance from expert loan officer and Founder and CEO of AdvanceSOS, Nick Wilson, we not only offer the basics of home improvement loans, but the best advice and tips on the subject.
What are home improvement loans?
Nothing too complicated, really. Home improvement loans are simply loans available to borrowers looking to repair, remodel, upgrade or improve their home. The amount of these types of loans depends on various factors, especially the state in which you live. Check links like this to confirm the maximum amount you can borrow. Other determining factors depend on the lender, with whom you will have to sign a digital agreement (more on this in the next paragraph). The latter also determines the repayment time you have, usually a few years since we are talking about processes, such as home improvements, which take a long time.
How to apply for a home improvement loan with AdvanceSOS
At AdvanceSOS, we offer a very simple and straightforward process to connect your needs with the potential lender who best meets them. In very simple terms, you apply for a loan and we put you in touch with the best lender in our financial network who will accept your proposal. If you need $100 to $5,000, we’d love to help, even if you have a low credit score! These are the most important steps to apply for a renovation loan, completely free.
- Visit our website at advancesos.com. The first thing you will notice is a screen where you can specify, first of all, the amount of money you need. Then click “Start”.
- Now the real application process begins. You simply have to fill in a form in which you indicate all the details and information requested. In doing so, we fully understand your needs and are able to identify your request. It shouldn’t take you long.
- Once you’ve completed the application process and received your loan proposal, it’s up to us. If the application is approved, our loan advisors will work alongside our financial system to match your requirements with the ideal lender who is most likely to accept them and complete the process with you.
- Finally, all that remains is your signature. You and the lender will sign a digital agreement to legally set the terms of the loan. You finally receive the sum of money stipulated in the agreement until one working day when it is done.
Types of Home Improvement Loans
We have just described the general procedure for applying for a renovation loan. It works no matter what type of loan you choose, so it may be helpful for you to understand what these types are and how they differ from each other. Here are the two main ones.
- Personal loans. The most common types of loans are primarily used for debt consolidation and, of course, home improvement. Personal loans are unsecured, that is, there is no connection with a guarantee. For those unfamiliar with the term, having a debt unsecured means that failure to repay the loan in no way justifies your home or other collateral being taken by creditors.
Personal loans are quick to obtain, but they are granted in the form of a lump sum payment. Instead of receiving a number of payments or smaller installments, this means that you receive only one payment in these cases.
- Home equity loans. This can be considered a safer form of loan from the lender’s point of view. Unlike a personal loan, a home loan is secured because it uses the equity in your home as collateral for the loan. Therefore, if you don’t repay the loan, the lender can legally take out your home. According to the Federal Trade Commission, you can borrow up to 85% of the equity in your home.
Home equity loans, like personal loans, while there are downsides to these terms, there are also several upsides. For example, because this type of loan is safer for lenders, it is usually cheaper for borrowers because interest rates are potentially lower.
Tips and Tricks
- If you need a home improvement loan for a major renovation or project, estimate the total cost before you apply so you can choose the best option for you and avoid running out of money.
- Consider the nature of your home improvement. If you need money over time, a personal loan may not be best for you. In these cases, try the home equity line of credit (HELOC). If you’re planning to pay it all off at once, consider personal or home equity loans.
- If you’re applying for a home equity loan or a HELOC, understand how home equity works and how much you own. This lets you know how you can use the equity to borrow against your home.
- If your credit is weak, don’t worry: at AdvanceSOS, we could accept your loan proposal anyway. However, personal loans, which are unsecured, are generally more difficult to obtain if the credit is bad.
- There are other alternatives to home improvement loans. Contact us, and we’ll be happy to help you decide if your financial situation and needs would be better met by home improvement loans or by 0% APR credit cards, mortgage refinances with withdrawals, etc.