Using a Personal Loan for Home Improvement: Is it a Good Idea?

Finance

It’s an idea you’ve been putting off for years now, but it’s impossible to avoid it any more with a leaking roof over your head. There’s no doubt that home renovation is costly and can cause your finances to suffer a slight setback, but if your house is in shambles, you have no choice but to choose a home improvement loan.

You are unlikely to have enough funds invested for this unless you have planned and prepared for this in advance. You can always use a personal loan interest calculator to figure out the appropriate interest rates and amounts you will have to pay at the end of the loan tenure.

Although you can take out a personal loan to fund your home renovation, let’s first understand if choosing one in the first place is a good idea.

A Personal Loan for Home Renovation?

Whether you can use a personal loan for home improvement depends on the size of the loan you need and the interest rate at which the loan is being provided. Before you make up your mind about going for a personal loan, it may be a good idea to work out a trade-off.

Personal loan interest rates can vary from rates as low as 10.99% to rates as high as 33%. While a low-interest personal loan will help you cope with the sudden demand for your finances due to the renovation of your house, a high-interest personal loan could prove to be very expensive.

One benefit of personal loans is that when you use the loan for home renovation, you won’t have to place the house as collateral because they are unsecured loans.

But they come with high-interest rates for the same purpose, and if there’s really no need for home improvement, a personal loan is likely to cost you more than it’s worth.

When should you opt to choose a Home Improvement Personal Loan?

Do you know that many financial institutions offer promotional deals like 0 percent interest for six months on personal loans? These types of loans can turn out to be very economical, but remember to check whether you can make complete and timely repayments, each time or else the higher interest rates may cause your finances to have a greater dent.

It makes the most sense, as with any financial product, to browse around for the best loan deals in town before settling down for one.

When there are unforeseen expenses, a Personal Loan may also come in handy. Regardless of how well you schedule things down to the last level, the cost of home repairs can only be tentative before the job really begins. Most builders, plumbers, and electricians can just send you an estimate your contractor might bring up anything that needs urgent repair when repairing your leaking roof.

You may want to opt for a higher loan sum in order to tackle such unanticipated costs.

Advantages of Personal Loan

Some of the benefits of usingFullerton India personal loans for home improvements are as follows:

  • Flexibility of the loan: For whatever reason, you can use a personal loan, whether it’s repairing your roof, remodelling your kitchen, or anything as simple as repairing windows. It is completely up to you how you use your funds
  • Quick funding: If you are applying online, some lenders can make funds available to you in less than 48 hours

Things to Remember

When shopping for personal loans, remember to watch out for items like hidden fees, such as interest fees for prepayment or part payment fees, etc., so that when repaying your loan, you do not get nasty surprises.