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Late and missed payments, along with other external factors, can have a negative effect on your credit score.
Membership fee
2 loans per year
Repay each loan in
Representative APR
Waiting period
Membership fee
2 loans per year
Repay each loan in
Representative APR
Waiting period
Membership fee
2 loans per year
Repay each loan in
Representative APR
Waiting period
Membership fee
2 loans per year
Repay each loan in
Representative APR
Waiting period
Late and missed payments, along with other external factors, can have a negative effect on your credit score.
If you've been putting off essential home improvements for months or even years, it's time to consider a home improvement loan. An effective way to fund necessary upgrades to your property, a home improvement loan can give you the additional cash you need to afford that much-needed makeover.
It goes without saying that home improvements and DIY can be costly, particularly if you’re adding an extension to your property or remodelling rooms.
Many people lack the necessary ready funds to make the upfront payments for the work that needs to be carried out, and that’s where home improvement loans come into play.
Home improvement loans cover the cost of work that needs to be done on your property.
You can use them to make upfront payments for the changes you are making to your home, whether those changes involve converting the loft, adding an extension, or installing a new kitchen or bathroom.
However, not all loans are home improvement loans, and not all home improvement loans are created equal, so it’s important to do your research well and find a loan that works best to meet your needs.
Although some loans are specifically marketed as "home improvement loans", other types of loans can be used for the same purpose.
Secured loans, guarantor loans and personal loans are just some of the options you could choose from when it comes to financing home improvements.
Personal loans are a good choice for small-scale home improvements because smaller amounts can be borrowed. This type of loan doesn’t require the use of your property as security, but it may have higher interest rates and having a good credit score is essential if you're to be approved for the best deals.
Secured loans are ideal for large-scale improvements such as loft conversions or extensions as up to around £100,000 can be borrowed.
Secured loans are also more accessible to people with a low credit score, and often the loan can be paid back over a longer period. If you fail to keep up with the repayments, though, you may risk losing your house.
Guarantor loans are an option for those with bad credit, and there is no need to use your property as security.
However, finding a guarantor can be challenging, and you probably will only be able to borrow a small amount of money.
Essentially, then, a home improvement loan is any type of loan that is used to renovate or make improvements to a property.
Usually, you will apply for a home improvement loan via a bank, building society or other lender.
They will then check your credit history with one of the Credit Reference Agencies and determine whether you're likely to be a reliable borrower who will make your repayments on time and in full.
Should your application be approved, you’ll receive the money paid directly into your account. Those funds can then be used to pay for any aspect of your home improvements that you wish.
You will then be responsible for paying the amount that you’ve borrowed, plus interest, over time, typically in instalments each month.
Different lenders charge varying amounts of interest depending on the product that you choose and your personal credit history. The interest amount that you’ll be charged will also depend on:
The amount you need to borrow
How rapidly you’ll be paying it back
Whether you’re taking out an unsecured or secured loan
Getting a home improvement loan requires you to be approved by your chosen lender. However, there are some considerations to keep in mind before you make an application:
The amount you require will probably determine whether an unsecured or secured loan is right for you. This will, in turn, decide whether you'll need to put your home up as collateral.
Before taking out a loan, it's essential to check that you're capable of making regular monthly repayments on an ongoing basis until the loan reaches its term.
You'll also need to determine whether your credit score is high enough to be approved for the size and type of loan you require. If your credit rating is too low, you could be offered a smaller loan or a higher interest rate. Or you may be rejected altogether.
Taking out a loan that is secured on your property puts you at the potential risk of losing your home should you default on the loan.
If you take out a guarantor loan, it’s important to remember that your guarantor will be responsible for repayments if you cannot afford to make them, which could put you in a challenging position.
Furthermore, if you default on any loan, secured or unsecured, you will end up with a black mark on your credit history that will have a negative impact in the future when you apply for credit.
The amount you can borrow for home improvements will depend on which lender and which product you choose.
Personal, unsecured loans and guarantor loans are likely to be for lower amounts, typically between £1000 and £10,000 (or sometimes as much as £25,000).
Meanwhile, secured loans are usually for more considerable sums of £25,000 and above. It's often possible to obtain a secured loan for as much as £100,000.
Projects costing under £10,000 can usually be funded without any need to use the equity in your home as security since you can typically take out an unsecured personal loan for this purpose.
However, another alternative is to borrow more on your mortgage to fund your renovations. There are a few ways of doing this.
This is a way to top up your existing mortgage. You remain with your existing lender, and often your mortgage's original terms won't change.
You'll typically have to pay two different rates of interest, with your original mortgage sum being charged at the original rate and the new borrowing at a different one.
Further Advances offer some benefits in that there's no need to wait until the time is right to borrow more money and you keep your existing mortgage rate.
Further Advances are also quicker to arrange since solicitors aren't usually involved. However, harmonising your repayments and interest rates can be challenging. Sometimes, changes will need to be made to the method you use for the interest-only elements you have already in place.
If you have a costly, large-scale home improvement project to complete, you may want to consider a remortgage.
The amount you’re able to borrow is determined by your available equity and your new prospective lender’s affordability assessment of your credit score.
Remortgaging offers the benefit of a better interest rate on your whole mortgage, potentially reducing your monthly repayments or shortening your overall term.
Also, the new borrowing will be consolidated under a single arrangement – something that is simpler to manage than the two arrangements involved in a Further Advance.
There are some downsides though, such as additional fees, a potentially longer mortgage length, and often the need to sacrifice your current low interest rate.
Remortgaging can also be a slow process since a valuation is often needed, and solicitors will undoubtedly be involved.
This type of secured loan is a way of using your equity to fund your home improvements; however, in this instance, a different lender is used to your existing mortgage company.
A second charge is often a solution for those whose current lender refuses to allow them to borrow the whole amount they require under their existing mortgage arrangement.
Second charges are also suitable for people on interest-only mortgages who cannot borrow more money without needing to make major alterations to their set-up.
The amount you can borrow if you take out a second charge will depend on the amount of equity you have in your property, and the affordability calculation carried out by your lender. You may find that the interest rate on a second charge could be higher than your existing mortgage rate, but it's often lower than the rate charged on unsecured loans.
The repayments are typically spread over a more extended period than those for unsecured loans, which could be a disadvantage or an advantage depending on your situation.
There is an excellent alternative to a standard personal loan or secured loan when it comes to borrowing money to fund home improvements. Becoming a Creditspring member allows you to take advantage of two no-interest advances each year – ideal for paying for those essential renovations to your property.
When you take advantage of a simple no-interest Creditspring loan, you won't need to put off your home improvements any longer. Whether you need to redecorate, buy new furniture, fix your lighting, upgrade your windows and doors, or carry out repairs, you can use the money you borrow to pay for the work that needs to be done.
Even better, as no interest is charged on your borrowing, you won't need to worry about your costs growing over time. That allows you to borrow confidently for your home improvements and upgrade your property today!
We will check your eligibility for a Creditspring membership that will give you access to our no-interest loans. There's no need to worry as our check won't negatively impact your credit rating. Why not check whether you're eligible now? It only takes 60 seconds, and there's nothing to lose. Just fill in your details here and get the ball rolling!