Do you want to provide your family with a better place to live? Do you want to increase the value of your property? Whatever is on your mind, you have two options: either you can improve your present house or you can trade up to a new house.
Whatever the option suits you, both of them require a significant financial outlay. However, home improvement loans seem to be cheaper than trading up to a new house.
Who should apply for home improvement loans?
You can apply for these loans if you prove your reimbursement capacity to your lender. Direct lenders do not have a problem to lend money to average-income group borrowers. You can apply for these loans if you are 18-years-old or over. However, the studies suggest that most of the applicants are from the age group of 25-45.
How much should you borrow funds?
Before you fill a loan application, you need to know the cost of renovation of your home. Cut the debt down to size if you have savings to utilize toward your home refurbishment. It is better if you combine your savings along with the loan to avoid paying extra interest. Therefore, it is suggested that you should have money set aside for home remodeling. If the renovation cost is not going to cause you a small fortune, try to use your savings instead of taking out a loan.
Why should you take out home remodeling loans?
Home improvement loans in Ireland are provided for an extended period, which means you will pay whole of your debt in fixed installments. This feature allows you to make a budget and pay back the debt within a period of three to five years.
However, some lenders provide you with the facility of paying off the debt within a shorter time. You can save your money in interest if you pay back in a short period, but the size of your regular payment will be higher. You opt for this option as long as you are certain that it will not put a lot of strain on your budget.
You will get best interest rates if you choose to pay over an extended period. Further, you will not suffer from financial strain. If you succeed in paying your debt timely, your score will go up, which means you will get a loan at a low interest rate in future.
These loans may cost you a leg and an arm if your credit history is not stellar. Poor credit report shows the risk of high defaults therefore direct lenders charge high interest rates. You can get the deal at affordable interest rates if you arrange a guarantor with a good credit score.
What should you do before taking out the loan?
Every time you apply for a loan, it is recorded on your report. If you apply for multiple applications, you may not seem to be an attractive borrower. They may deduce that you are not a trustworthy borrower and you will make defaults. As a result, they will either cast aside your application or charge high rate of interests.
Do not forget to peruse your credit report to know the strength of your score because you will review your options accordingly. If your score prevents you from taking out the loan, you should apply for secured home improvement loans. While this involves the risk of losing the security if you do not pay back timely, you will get large funds at a lower rate of interest as it mitigates the risk of lender.