A home owner may want to make some changes to his house- he may want to remodel the kitchen, renovate the bathroom or convert the study into a guest room. Home improvement could be quite expensive and the owner can take home improvement loans to bring about these changes. These loans are basically personal loans.
Conditions For Qualifying For Home Improvement Loans
- The borrower must be at least 18 years of age.
- He must have a steady income which would enable him to make timely loan payments.
- His credit history should be good.
Facility for Automatic Payment
Most lenders provide the facility of automatic loan payments. This is done by directly deducting the loan amount from the borrower’s bank account. Since this arrangement ensures that all payments are done on time, lenders generally provide a reduced interest rate for those who opt for this facility.
Features of Home Improvement Loans
- The amount given as loan could generally range from $1,000 to $250,000.
- The interest rate is fixed and the interest charged is simple interest. The borrower would have to pay the same amount of interest each month.
- The repayment period ranges between 5 and 25 years.
- If the amount required is more than $10,000, the loan would have to be secured by a mortgage on the structure which is going to be improved.
- Generally, interest on these loans can be deducted for the purpose of calculating tax.
- Loan approval is immediate; it takes just one working day after application is forwarded.
- For home improvement loans above $100,000, many more documents such as a quotation of the cost of home improvement, proof that taxes have been paid and title insurance policy have to be furnished.
Before taking home improvement loans, a person must be sure that he can afford to make the loan payments. Once he takes the loan, he can start on the work of renovation immediately.