Home Improvement Loans

Choose the best borrowing options for your circumstances, and make those dream renovations a reality.
  • Adding extra living space
  • Ensuite bathrooms
  • Conservatories
  • Turning the attic into a bedroom
  • Basement remodels
  • Landscape design

A home is so much more than a place to eat, sleep and relax; it’s a haven for families. However, as the kids’ age and your space needs change, you want to upgrade or downsize your property.

With a tough housing market, buying a new home is by no means easy – and selling your current property is an even bigger challenge. Homeowners everywhere are turning to home improvement loans as an alternative to buying a new home.

These loans enable you to make alterations to your property, including building a new extension, adding a basement conversion or finally getting that new kitchen. They’re more convenient than moving house and cost-effective solutions for your financial needs.

With so many loans available, knowing which is best for your needs and whether you’re eligible for one is challenging.

Believe Loans is a professional loans broker dedicated to helping our clients find the right borrowing solution. We have a wide range of loans available and work with clients from all backgrounds.

How a home improvement loan could help you

A home improvement loan gives you the money you need to make any alterations to your property. As long as the money you borrow goes on renovations or decorating, you can do pretty much anything you want.

Common uses for these loans include:

  • Adding extra living space
  • Ensuite bathrooms
  • Conservatories
  • Turning the attic into a bedroom
  • Basement remodels
  • Landscape design

Once you take out a loan, you’ll enter into a legal agreement with the provider and be responsible for making monthly repayments. If you fail to make these payments, you could lose your home or other assets (depending on your loan).

Unsecured personal loans

An unsecured or personal loan is ideal for people without assets such as a mortgage. These loans definitely have their benefits, including less risk to any assets you possess, but it’s crucial to think about the pros and cons of each.

The pros of an unsecured loan:

You can borrow more money

Credit cards are great, but few people secure a large credit limit. For example, many people can obtain an amount of up to £25,000 with a personal loan, while most credit cards offer less money to clients.

Fixed payments

Another benefit of personal loans is their convenience. You have one fixed monthly payment until the loan – and interest – is paid in full.

Flexibility

Most providers allow you to plan your repayments, so you can choose a shorter term if that’s more convenient.

The cons of a personal loan:

The cost

Personal loans can cost more long-term because the interest rate is usually higher than a secured loan. Also, most lenders will try to convince you to borrow more money, which locks you into a more extended repayment plan.

There are risks

While you don’t risk losing any assets outright if you default on your loans, you can lose some belongings, and the case might go to court.

You need a good credit rating

As you’re not offering any collateral for the loan, all providers will expect you to have a good credit rating at the very least. This is to ensure you can meet the monthly payments.

Secured home improvement loans

Secured loans are the more popular form of borrowing arrangement because they’re easy to get and are suitable for people with poor credit ratings.

With these loans, you offer valuable assets (usually your property) as collateral, giving individuals with an unfavourable credit score a viable financing solution.

The pros of a secured loan

Longer repayment terms

One of the primary advantages of a secured loan over an unsecured personal loan is the extended repayment plan. You can often pay the amount off over many years, but remember your payments will be higher if you choose this route.

Ideal for people with poor credit

You can still get a secured loan if your credit history isn’t great. Lenders look at your assets instead of your current financial state, making these loans easier to obtain.

Secure more money

Another significant benefit of these loans is the amount of money you can borrow. For example, if you have a property as an asset and have paid off most of your mortgage, you can borrow more than £100,000.

The cons of secured loans

Possible higher interest rates

While secured loans are beneficial and offer longer repayment terms, you could also pay more interest through the years. As the interest rate is added to your monthly repayment, you should consider how much you can realistically afford each month.

There’s more risk involved

Another thing to consider if you’re taking out a secured loan is the potential risks. For example, if you offer your home as collateral and default on the payments, you could lose the property.

While this doesn’t usually happen, weighing the risks before using a secured loan is essential.

Early repayment charges

You don’t have to worry about extra charges when you stick to your monthly loan repayments. However, some people might want to pay the outstanding amount back quickly, which means you won’t meet your fixed repayment terms.

While paying back the amount sooner can free you of debt, you might have extra charges too.

Why choose a proper loan over credit cards or other alternatives?

It’s no secret that home improvements require a significant investment, and some people might prefer to choose other borrowing solutions over loans.

Borrowing money is a big decision and one that you shouldn’t enter into lightly, so you should always compare loan options.

Remortgaging your property

Remortgaging is a popular option for many homeowners, as it allows you to potentially switch to a lower rate and fund your home improvements. However, choosing to remortgage your home usually incurs an additional repayment fee, and you’ll possibly pay more.

In many ways, remortgaging is similar to a secured loan, as you could lose your property if you don’t fulfil your lending commitments.

Credit cards

Another less popular but possible option is getting a new credit card and using it to pay for the renovations. Some credit cards offer a 0% interest rate, but this is usually only available for people with excellent credit scores.

Also, most credit cards offer lower amounts and fixed 0% interest terms, so they’re only really suitable for more minor improvements.

Things to consider before you get a home improvement loan

Before you apply for a loan, it’s essential to consider whether it’s the best option. For example, getting an extension you don’t need will result in prolonged debt. It might seem like a good idea, but additional borrowing can add up.

However, if you need extra space or want to add value to your property, then a loan could be an excellent investment for your future.

Before entering into an agreement, you should consider all available options and choose a solution that will benefit your future instead of landing you with long-term, uncontrollable debt.

Think about the interest rates

Depending on your loan type, you’ll need to look at the interest rates before filling out your application. The worst thing that can happen is not thinking about how much interest you’ll pay because it can dramatically impact your financial circumstances.

The better your credit score is, the lower your loan rates will be, so some people prefer to improve their credit file before taking out a loan.

It’s also important to look at the small print for each provider and evaluate which offers the lowest interest rates. Fixed terms are also valuable because they provide more protection, as lenders won’t suddenly increase your monthly repayments.

Loan to value ratio (LTV)

The loan-to-value (LTV) ratio is a term lenders use to define loan ratio to the value of your assets. It can be anything from a car to a business, but it’s a property in most cases.

If you have a mortgage, your loan-to-value ratio will depend on how much equity you own. For example, if your home is worth £250,000 and your outstanding mortgage amount is £200,000, you’ll only have £50,000 in assets.

Lenders use the amount of equity you have to determine how much money you can realistically borrow, so you might not be able to source the funding you require.

Don’t jump into one lender

When you want to fund home improvements, it’s easy to get carried away and choose the first lender you see, but this can often result in higher costs further down the line. There are so many lenders, and taking your time to shop around can get you the best possible arrangement.

A broker can help you find a home improvement loan that meets your criteria and secures the best repayment terms.

Believe Loans can help you get a loan and lower your monthly repayments

If you’re looking for an impartial loan broker that always goes the extra mile for each client, Believe Loans can help. We work with clients to ensure they find the best lending solution for their personal circumstances and can secure a loan for individuals with poor credit.

We partner with numerous providers and broker small and large loans to fund home renovations.

If you’d like to discuss our services or want to know if you’re eligible for a loan, please don’t hesitate to contact our friendly team of specialists.

Any fees associated with our service are included in your loan arrangement, and we provide a zero-obligation service.

Whether it’s a small remodel or major renovations, our team of specialist loan advisors will support you through the entire application process.

Please feel free to contact us today. We look forward to helping you.

How It works

Step 1.

Simple, easy application

Step 2.

We search our panel of lenders to find the deal that’s right for you

Step 3.

When you confirm your chosen deal, we get your application moving

Step 4.

The money lands in your bank
account – usually within two weeks

We compare loans from our panel of the UK’s top lenders to get you the best deal.

BELIEVE

Contact Us

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01302 358 160