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 Money
Page > Loans
> Home Improvement Loan - UK Guide
 In a
nutshell
A loan to be used for home improvement
purposes.
Best
Loan for
Anybody looking to make home
improvements. A home improvement loan is particularly good if
you don't want to use your savings/don't have sufficient saved
for your home improvement project
Loan
Amounts
The amount you will be allowed to borrow
will really depend on the lender you use and the type of loan
you commit to (i.e. secured or unsecured). You will also be
assessed on criteria such as your income, your spending and
your credit rating in certain cases. Some lenders will also
limit amounts depending on what you want to use your home
improvement loan for. You can raise home improvement finance
to cover anything from a small project to major building
work.
Loan
Period
This will vary depending on your lender,
your loan type and how much you need to borrow - your loan can
last for anything between 1-25+ years.
Loan
Advantages
If you take out a specialist home
improvement loan deal then you may find that your money is
paid in instalments before pre-agreed work is completed. This
allows you to manage your budget much more effectively and
access your cash simply when you need it. So, if you spend
less than you budgeted for, then you could save yourself some
money by not borrowing more than you needed to. And, if you go
over budget, then you'll still have ready access to the money
you need. You can also tie your home improvement loan into
your existing mortgage package - so you will benefit from
lower interest rates and may be able to release equity to help
fund your project.
What to
look out for
Many home improvement projects can
cost more than you originally anticipated - and, if you've
opted for an instalment based loan then it's all too easy to
get carried away as you know that the money will be available
to you. And, some lenders will cap your borrowings so - if
your project is more expensive than your budgeted loan - you
could be left short at the end of your project. Many lenders
will be flexible here but, even if they are, this will cost
you more money than you planned for. Most consumers will
secure their home improvement loan against their property to
access better rates - there is always the risk here that you
could lose your home if you don't make all your regular
repayments. Although you can take out payment protection
insurance to help prevent this, it will cost you more to do
so. Many of the home improvement projects that we carry out
are relatively expensive - and it's easy to forget that we
will have to be making extra payments over longer terms for
them which all adds up to a lot of repayment money. And, many
consumers undertake home improvement projects because they
believe that they are increasing the value of their property -
so they think they'll get their money back later in life when
they move. The reality is that few home improvement projects
will actually bring in the same or more than they cost. So,
you could well find yourself out of pocket.
Alternatives
A
standard personal loan package may suit you just as well here.
As an alternative you can look at using your mortgage to
release equity or raise extra finance.
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