Home Improvement Loan

Home Improvement Loan

Whether it is to buy a new dream kitchen or bathroom or maybe to have a conservatory or garage built any major home improvements will add to the its value. But they don't come cheap. One way of paying for these improvements is to take out a Home Improvement Loan. They can be for virtually anything related to the home from as little as redecorating a room to building a 2-storey extension.

In general there are two types of Home Improvement Loan that you will want to consider.

This is where your house (if you own it outright or are paying a mortgage on it) and an unsecured loan. With a secured home improvement loan you will (usually) get a lower rate of interest It will also be easier to get, if you have or have had bad credit problems. The reason is that lender is taking less risk. If you don't keep up the payments on the loan they could sell off your house to pay your debts.

This is where there are no securities on the loan, in general they could credit blacklist you if you miss payments(so you would have take a secured loan next time!?) or send the boys round. However I doubt the Halifax or Nationwide would do the latter. However in some cases they can chase you through the claims court, and actually end up repossessing your house anyway, to get the loan repaid!

Best Loan for you

How do you know which home improvement loan is the best for you? Although the actual deal that you get with a lender will depend upon your circumstances (credit history, salary, age, joint or single application, collateral, amount to be borrowed and length of payback period) a good guide is the typical APR (Annual Percentage Rate) that the lender quotes. It may be the case that a lender that has some minor celebrity holding cash in their hands in a two page adverting spread in the Sunday magazine hasn't got the best rate - although you do get a free watch! Go to your local bank and building society branches and get details of there best rates. Another option is to search Google for "Home Improvement Loan comparison" to find sites that automatically list the best deals of the day. Your lender should tell you what the total cost of repayment of the Home Improvement Loan would be. In this way any additional 'hidden' charges can be seen when comparing lender deals.

Unsecured Loan: £2500 repayed over 3 years

Once you've found the best deals you can apply in writing, by telephone, got to the branch or via the Internet. Whether your application is successful or not will be judged on

If you find that you have been rejected because of a poor credit rating then you can get details of your history by contacting either Equifax or Experian. Both will charge for this service.

After taking out a loan

After you have agreed to the loan and if it is less than £25000, you have up to 7 days to cancel it with no obligation under the 1974 Consumer Credit Act. After this period you can protect yourself if your circumstances change by taking out some form of payment protection plan. In the event of you losing your job this will come into effect and pay your repayments for a set period of time depending upon the policy. These can be taken out with the lender or via a separate company. If you haven't taken one of these out and you do find that the repayments are becoming difficult then discuss it with the lender at the earliest possible opportunity.

In conclusion for a Home Improvement Loan

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