Personal loans, home equity: the financial advisors at AdvanceSOS share everything about home improvement loans in this comprehensive guide.
Home renovations are a big deal: whether you are making massive changes or modifying your home just a bit, you are sure to spend quite a lot of money on them. Even though this might seem stressful, many tools help you go through this process with little worry. One of them is home improvement loans, which enable you to receive the sum of money you need for your renovations and repay the loan once you are ready to do so.
It is a quick, safe, and very useful help for completing the work you are doing at home. Nonetheless, before applying for a home improvement loan, you should know a bit more about the whole process. That is why we are here! At AdvanceSOS we put all of our expertise in the financial sector at your service to aid you in the perfect choice for your situation.
In this article, we will cover the main aspects of home improvement loans in the US. Thanks to the advice of Nick Wilson, expert loan officer and AdvanceSOS founder and CEO, not only do we offer basic information about home improvement loans but also the best tips and counseling on the topic.
What Are Home Improvement Loans?
Nothing complicated, really. Home improvement loans are simply loans available to borrowers looking to repair, remodel, upgrade or improve their homes. The amount for these types of loans depends on various factors, especially on the State you live in. Check out links such as this to confirm the maximum amount you are able to borrow. Other determining factors depend on the lender, with whom you will have to sign a digital agreement (more info on that in the following paragraph). The latter also determines the repayment time you have at your disposal, usually a few years given that we are talking about processes, such as home improvements, which take a long time.
How To Apply for a Home Improvement Loan with AdvanceSOS
We at AdvanceSOS offer a very easy and straightforward process to link your needs with the potential lender who satisfies them best. In very simple terms, you apply for a loan and we connect you with the top lender in our financial network who will accept your proposal. If you need between $100 and $5,000, we would be glad to help you, even if you have a low credit score! These are the most important steps to apply for a home improvement loan, completely free of charge.
- Head over to our website at advancesos.com. The first thing you will notice is a screen in which you can specify, first of all, the amount of money you need. Then, click on “Get Started”.
- Now the real process of applying begins. You should simply fill out a form in which you indicate all the details and information asked for. By doing so, we fully understand your needs and are able to identify your demand. This shouldn’t take you long.
- Once you complete the application process and receive your loan proposal, the turn is ours. If the application is approved, our loan advisors will work alongside our financial system in order to match your requirements with the perfect lender who is most likely to accept them and carry out the process with you.
- Finally, all that is left is your signature. You and the lender will sign a digital agreement in order to set the terms of the loan legally. You finally receive the sum of money stipulated in the agreement in up to one business day when it is done.
Types of Home Improvement Loans
We just described the general procedure in order to apply for a home improvement loan. This works for whatever type of loan you choose, and thus it might be useful to 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 mainly used for debt consolidation and, of course, home improvements. Personal loans are unsecured, that is, there is no tie to any collateral. For those unfamiliar with the term, for a debt to be untied to collateral means that failing to repay the loan doesn’t justify in any case having your house or other collateral taken by creditors.
Personal loans are swift to get, but they are granted as a lump sum payment. As opposed to receiving a number of smaller payments or installments, this means that you receive a single payment in these cases.
- Home equity loans. This one can be considered as a form of safer loan from the lender’s point of view. Contrary to a personal loan, a home equity one is secured, as it uses the equity in your house as collateral for the loan. Therefore, if you fail to repay the loan, the lender can legally take your home away. According to the Federal Trade Commission, you can borrow up to 85% of your home equity.
Home equity loans, as personal ones, even though there are downsides in these terms, there are also several pros. For example, because this type of loan is safer for lenders, then it is generally cheaper for the borrowers as interest rates are potentially lower.
Advice and Tips
- If you need a home improvement loan for a big renovation or project, estimate the total cost before applying so you can choose the best option for you and prevent running out of money.
- Consider the nature of your home improvement. If you need money over time, then a personal loan might not be the best for you. In those cases, try the Home Equity Line of Credit (HELOC). If you intend to pay all at once, then go for personal or home equity loans.
- If applying for a home equity loan or a HELOC, understand how equity works and what amount of equity you own. This enables you to know how you can use equity to borrow against your home.
- If your credit is low, don’t worry: at AdvanceSOS, we might accept your loan proposal anyway. However, personal loans, which are unsecured, are typically harder to get if credit is bad.
- There are other alternatives to home improvement loans. Get in touch with us, and we will be glad to help you in deciding whether your financial situation and needs would be satisfied best by home improvement loans or by 0% APR credit cards, cash-out mortgage refinances, and the like.