Home Improvement Finance – What are the options?

 I need to finance home improvements, what are the options?

Considering finance options for a new bathroom, kitchen or other home improvements? You will probably know by now that the internet can be a daunting place when it comes to researching your choices.

We’ve put together an honest guide of sensible options to bear in mind when taking the plunge with bathroom or general home renovations (excuse the pun).

Before you begin

It’s wise to take into consideration which projects could potentially boost property value when choosing what sort of plans to finance, especially when borrowing. For example, attic renovations, bathroom updates, kitchen remodeling and extensions are more beneficial in the long run when it comes to boosting your house value.

Always read the small print

Many untrustworthy lenders advertising quick fix cash ‘solutions’ are overwhelming the search pages with promises of large amounts of money for a better home, often failing to make clear the crippling interest rates that follow. Most people have felt ripped off by a company only to call up and be told ‘it was in the small (miniscule) print on the 50th page of your contract in the email that went to your spam folder’.


I only need to borrow for a short period of time

If you are certain you can repay the debt whilst the deal is still interest free, credit cards can be a helpful solution. Make sure you don’t borrow any more than you need and set up a direct debit paying off amounts on a regular basis. Once the 0% period ends most companies start at 18% interest. Do an independent credit check before applying, you could be charged a higher interest rate if you have a poor record.

Credit cards can be a good option if borrowing up to £8,000. Many high street banks and supermarkets currently offer new customers 18 months at 0% on all spending. The APR often rises to 18.9% when this deal finishes. Again, it’s important to use a credit card if you’re confident you can make timely payments to avoid spiraling into more debt.

When can I apply for a personal loan?

If you need to borrow larger sums of money it is common for your bank to refuse a credit card, so a personal loan can be a viable alternative. Many banks offer an APR of 4.6% if you require between £8,000 and £15,000, as long as you repay the full amount within three years.

If three years feels unachievable, look for offers with up to 5 years to pay it back, make sure you are realistic rather than overly optimistic with timing, it’s always better to be safe than sorry.

I’m worried my credit rating isn’t good enough

High Street borrowing isn’t the only form of sensible borrowing available, so if your credit rating isn’t up to scratch try not to despair too much. Credit unions are non-profit cooperatives whose members can borrow from pooled deposits at low interest rates. Usually set up by members to benefit a community, credit unions have specific requirements in order to become a member. Most credit unions offer a personal loan between 5 and 10 years for a loan secured on your property but is much cheaper than borrowing from a bank. Find out more here.

I need to borrow £25,000 – maybe even more

You can only apply for a secure loan if you own a property – meaning if you can’t make the repayments on time you could lose your home. Secured loans are a big decision but you do get a longer timeframe to pay it off. You’re also more likely to qualify for a secured loan than an unsecured, as the acceptance rate is higher. Borrowing £30,000 at an APR of 6.7% means your monthly payments would be £261.38 if on a 15-year repayment scheme. Click here for more information on secure loans.