Personal Loans for Home Repair/Renovation

Investing in a house or even renovating an existing one can lead to a hike in the financial budget. The safest and cheapest option to rely on is personal savings. Although, it is a bit difficult for a lot of people to use up their savings at the drop of a hat in a difficult/demanding situation. Moreover, there are several people who may not even have any savings, to begin with. Reaching out for your credit card might not always be a great option since credit cards have their own fair share of flaws. In such trying situations, a personal loan can fulfil your home improvement needs.

You can either apply for a personal loan online or a home equity loan. Most people are worried about the high-interest rates of personal loans and as a result, they end up not applying for one. Here is why a personal loan for your home needs is better than a home equity loan:

Home Equity Loans

  • A home equity loan is a type of loan with the help of which the borrower uses the equity of his or her home as collateral;
  • This is a secured loan;

  • Interest rates are relatively low for home equity loans;

  • There’s a risk of losing your home if you are unable to make the end payment within the stipulated period of time decided by the financial institute providing the loan.

Personal Loans

  • A personal loan is the type of loan with the help of which the borrower uses the loan to fulfil any type of personal need;

  • This is an unsecured loan;

  • Interest rates are relatively higher for personal loans;

  • The entire process of obtaining a personal loan for home needs and then repaying the loan is more stress-free than any other option.

A personal loan is a perfect option to consider owing to the following reasons:

  • A personal loan is not secured on the basis of your home, as is the case with a home equity loan. This greatly reduces a customer’s stress, while ensuring that s/he receives the funds as soon as possible.

  • Applying for a personal loan is a simple & quick process, whereas a home equity loan requires a longer duration of time for its disbursement, and it also includes a lengthier documentation procedure. Once your personal loan is approved, you can expect to receive it in the following 24-48 hours or within a week.

  • The fixed interest rates on personal loans ensure that you can factor in reliable monthly payments in your budget to pay for the EMIs of your personal loan.

  • If you can dedicate more time towards the research that is required before zeroing down on a financial institution for personal loans – you may also be able to find personal loans at low-interest rates as well.

  • The payback period of a personal loan is also shorter than it is in the case of a secured loan and is usually 2-5 years.

Therefore, if you are planning to purchase a home or renovate your existing house, give personal loans a chance. You will find that the entire process is much smoother, easier, and stress-free.