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Home improvement loans

Comparing home improvement loans

For some of us, there’s no greater pleasure than doing up the house, whether that means buying a few new rolls of wallpaper or knocking down walls and ripping up floors.

For others, the whole idea is a nightmare! Either way, it can be an expensive business.

That’s why a lot of people need to take out a loan for the purpose, and this kind of lending has its own name – the home improvement loan.

Different types of loan for home improvement

The kind of loan you need depends on how much you need to borrow. Often a personal loan is enough to cover the costs of home improvement. But if you’re planning an extension or something fairly drastic, you might need to look at a secured homeowner loan. With these, you can borrow a lump sum of money against your property.

Usually personal loans offer lower amounts and shorter repayment periods than a homeowner loan. With a homeowner loan, though, you run the risk of having your home repossessed if you fail to make the repayments.

Even with the personal loan, it’s really important to make regular monthly repayments throughout the term of the loan. Our loan comparison page lets you look at loans up to £100,000, with the ability to compare both personal and homeowner loans. Note that for homeowner loans lenders might want you to have built up equity in your home that they can use as security.

What should I look out for when taking out a home improvement loan?

There are a few things you need to understand before you commit yourself to any loan.
First, if you fall behind or stop making payments on the loan, the lender can take you to court and could even demand that your house is repossessed.

Second, loans often have a variable interest rate, so the monthly payments could go up or down. And if you've also got a variable rate mortgage, you could get hit twice if rates go up, so it’s really important to make sure you can afford your monthly repayments if they were to go up a few per cent.

And third, some lenders make it hard to pay loans back early by imposing a penalty. On the other hand, some make it clear that they won’t allow a ‘repayment holiday’, which is where you can request a break of a month or two if things are tight. This could put you in real difficulty if you are between jobs or an unexpected tax bill comes in.

How can I find the best home improvement loan?

The good news is that it’s really easy to compare different home improvement loan rates. Our loan comparison page lets you look at the options for both personal and homeowner loans.

You can search on either how much you want to borrow or the amount you can afford to pay back each month. Add in how long you’d repay for and you’ll see a table listing all the options.

Loans are listed in order of APR (annual percentage rate) which is the total amount that the loan will cost you including interest and charges.

Something that’s worth looking at is the total amount payable. It shows you how much you will actually pay back over the term of the loan. As an example, paying off a £30,000 loan over 15 years could cost more than £40,000 in the end. But if you paid the same amount back over 5 years you might only pay £33,500.

That’s why it’s important to try and find a balance between affordable payments and a short loan period to avoid wasting money.

Poor credit home improvement loan

Got a poor credit history? It can be tough to find a loan to accept you. If you’ve got into debt before it might not be too sensible to get a loan at all.

Having said that, poor credit history doesn’t necessarily mean you can’t get a loan. On our loan quote page we list a number of providers who say they will consider applicants with poor credit.

So it shouldn’t take too long to find the cheapest home improvement loans. Please remember, though, that no matter how low the APR, loans are always an expensive way to get hold of money and there can be big risks, especially if you’re using your home as security.

There’s always the option to save up and make your improvements when you actually have the money. It could be a safer and more rewarding option.

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