Home Improvement Loans – Full Review and Comparison
Representative example: If you borrow £34,000 over 15 years at a rate of 8.26% variable, you will pay 180 instalments of £370.70 per month and a total amount payable of £66,726.00. This includes the net loan, interest of £28,531.00, a broker fee of £3,400 and a lender fee of £795. The overall cost for comparison is 10.8% APRC variable. Typical 10.8% APRC variable
Representative example: If you borrow £34,000 over 15 years at a rate of 8.26% variable, you will pay 180 instalments of £370.70 per month and a total amount payable of £66,726.00. This includes the net loan, interest of £28,531.00, a broker fee of £3,400 and a lender fee of £795. The overall cost for comparison is 10.8% APRC variable. Typical 10.8% APRC variable
Are you thinking of making your home better with a loan but not sure about the cost? This guide will help you understand home improvement loans in the UK.
Every month, nearly 7,000 people visit our website to learn about these loans. So, you’re in good company.
In this guide, we’ll explain:
- Different types of loans for home improvements
- How to compare quotes to get the best deal
- The difference between secured and unsecured loans
- Things to think about before taking a loan
- How to use a home improvement loan calculator
We know loans can be hard to understand. That’s why we’ve made this guide simple.
Let’s start and find out how much a home improvement loan might cost for you!
What’s the best way to borrow money for home improvements?
There are lots of ways to borrow money to make home improvements, including:
- A home improvement loan
- A home equity loan
- Generic personal loans and credit cards
- Cash-out refinancing
The best way will depend on what types of deals and interest rates are available to you, based on personal circumstances. A home improvement loan could be the most beneficial option. Learn more about these loans and how to compare home improvement loans in the UK, just below!
What home improvement loans are available?
There are two main types of home improvement loans, namely a home improvement unsecured personal loan and a home improvement secured loan. You can also find guarantor loans where repayments are secured by a guarantor and their assets, but these are not as common and usually standalone as generic guarantor loans.
Home improvement secured loan
A secured home improvement loan will allow you to borrow money and use valuable assets as collateral within the loan agreement. What this means is if you do not pay what you agree to, the lender can seize your assets and sell them to recover the debt. It is a good way of reassuring the lender that you will repay and giving them an easy way of getting their money back. As a result, a secured loan of this kind could help you get a bigger loan with lower interest.
Home improvement unsecured loan
Home improvement unsecured loans do not list any assets as collateral in the event you do not keep up with repayments. This means the lender does not have an automatic right to repossess your listed asset to sell and recover the money. But be warned, not paying can result in the lender taking legal action and a judge forcing you to pay. If you still avoid repaying they can use bailiffs to seize goods or even put a charging order on your home.
Home improvement loans for all purposes
- Stuck paying high interest on credit card debts & loans?
- Looking to fund a home improvement project?
- Dreaming of finally taking the once-in-a-lifetime trip?
Polly
“This was by far possibly one of the nicest experiences I’ve had getting a secured loan.”
Reviews shown are for Loans Warehouse. Search powered by Loans Warehouse.
How do I get a home improvement loan?
Home improvement loans are offered by online loan providers, banks and building societies. You can usually find information and apply online when using either of these three options.
To get a home improvement loan you will need to meet the lender’s initial eligibility criteria, which usually involves being a homeowner of a certain age and a UK (tax) resident.
The lender will then need to assess your suitability for a home improvement loan, meaning can you realistically afford it and do you have a track record of paying back your debts on time and in full. To determine this, they will require information about your income, existing debts and will look at your credit file.
If they are happy with the information, they will approve the loan and send the money to a designated account within days, sometimes within the same day if you bank with the same bank you took the loan from.
What are the current home improvement loan rates?
At the time of writing, the lowest home improvement interest rates are just below 3%. This is what you can get if you have a good or excellent credit score and want to borrow a specific amount of money, usually between £7,500 and £15,000.
This is based on market research – but things can change quickly!
How long do home improvement personal loans last?
Home improvement loans come with varying repayment periods, depending on what the lender is willing to offer and the length of time you need. Most unsecured personal loans can be repaid over a period between one and five years in most cases. Securing a home loan with an asset may allow you to borrow more than the average, which may also mean getting longer than normal to repay.
» TAKE ACTION NOW: Compare deals from the UK’s leading lenders
How to compare home improvement loans
To compare home improvement loans you can either look at each lender individually and keep notes on what is advertised, or use a home improvement loan comparison site.
Using the latter option may be quicker and simpler, but it may miss out some lenders and cause you to consequently miss out on a more advantageous loan deal.
Compare home improvement loans UK
To give you an example of how to compare home loans in the UK yourself, and what details to take note of, here are two loans advertised at the time of writing and subject to change. You should always conduct your own research.
NatWest Bank
NatWest is currently offering home improvement loans from £1,000 to £50,000 with repayment periods lasting as long as ten years for larger loans. Their lowest representative APR rate is 3.4% for loan amounts between £7,500 and £19,950.
The Post Office
The Post Office provides home improvement loans with a value from £1,000 to £25,000. They can be repaid over a loan term between one and seven years. The representative rate fluctuates depending on how much you borrow. Between £15,000 and £25,000, the representative rate is 2.9% but below this amount, it can increase up to 13.5%.
Our notes compare the two loans and the key details, making it easy for you to rule them out or add to a shortlist of potential options. For example, if you needed £30,000 for your home renovation you could consider NatWest and rule out the Post Office. However, if you wanted to borrow between £15,000 and £25,000, you could get a lower rate with the Post Office.
Get help to compare home improvement loans
Comparing home improvement loans can be daunting, especially if you’re not confident with maths or are still a little unsure. You can get help to compare home improvement loans, and some of this support is free!
Here are some examples of where to get help:
- Debt charities – although you may not be in debt, you are entering into debt by taking out a loan for home improvements. Some debt charities can help you compare options and they can assist you in budgeting for repayments accurately once the loan is approved.
- Credit broker – a broker that will find you the most suitable and beneficial home improvement loans will simply outsource the task of comparing home loans. You may have to pay upfront or you may only need to pay for their service if you decide to apply for one of the loans they find.
- Other financial service providers – many financial service companies can offer to help you find the most suitable loans based on personal circumstances. These work similar to how a mortgage advisor looks for mortgages for clients. They will come at a cost. Either upfront or after applying.
Is a home improvement loan right for me?
A home improvement loan can be a smart choice in funding your renovations, but it won’t be the most appropriate or advantageous option for everyone. If these loans are right for you or not will hinge on personal circumstances and your preferences to risk. You may want to get support from a money advice group, charity or commercial service provider first.
Only by fully understanding home improvement loans will you know if this credit option is right for you. We provide even more information about these loans in other new MoneyNerd guides. But even better, we’ve also got guides and articles discussing the other ways to finance home improvements, such as home equity loans.
