There’s lots to know about secured home improvement loans, so we’ve compiled a selection of the more frequently asked questions regarding the loans themselves, repayment and other considerations.
Remember, if you apply for a loan quote you will have all of your questions answered by a FSA authorised advisor, and will be given all the information you need in order to make an informed decision.
The FAQ’s on this page are deemed correct at the time of writing, but you should always check with the loan company directly. We are not qualified to offer secured home improvement loan advice in any way.
What exactly are secured home improvement loans?
A home improvement loan is designed solely to fund the renovation or redecoration of a property. Anything from simple redecoration to house extensions, new fitted kitchens and bathrooms are covered. As secured home improvement loans are secured against the property, they allow you to borrow sufficient money to carry out such renovations. They are also treated separately from your mortgage.
Why get a home improvement loan?
There are numerous reasons why you might want to apply for a loan. Perhaps you simply want to renovate your home, or carry out some work to add value to the property ready for resale. We receive quote requests for all types of reasons, from a new kitchen to a complete house extension.
Do I qualify for a home improvement loan?
If you are old enough to meet the age requirements, and own your own home then a secured home improvement loan is an option you can explore. There are also other loans, typically unsecured loans which are available to those who do not own properties.
Just how much can I loan?
There a a few factors which will determine the amount that can be borrowed for home improvement purposes. Firstly as you’ll be borrowing against the value of the house, the current market value will have a direct impact on the amount that can be borrowed. Secondly, the income you presently receive (factored in with your outgoings) will have an impact on the total amount you can loan. Thirdly, your credit history will play a part in the loan amount. As a typical example, with average house values and income you will be able to borrow over 80% of the current value of the property.
What are the interest rates?
There are a couple of factors which will influence the interest rate you will be charged. Firstly, the percentage of the total value that you borrow (with smaller amounts typically receiving lower interest rates). Secondly, your current credit rating will affect the interest rates.
How long are the repayment terms?
One of the distinct advantages of secured home improvement loans is that the terms of repayment are far more flexible. They can be anything from a couple of years to over 20 years depending on your agreement.
I joint own the property… what next?
No problem, but you will both have to complete the application form (the form will auto-adjust to compensate for the additional person). A joint application will share the responsibility between the two applicants.
What’s the application process?
To get the process started, and to receive your free quote you simply need to complete our short application form to provide the lender with the information needed to provide a quote. Once the lender has contacted you, there may well be additional information required which will vary between applicants.
How is the money supplied?
Typically your home improvement loan will be credited to your account via a bank-transfer, but occasionally it can be supplied by a cheque.
What about poor credit history?
Yes, it’s likely that this form of borrowing will still be applicable to those who have poor credit history, however it may result in you paying back higher interest rates than those with good credit history.
What are the main advantages?
Secured home improvement loans offer a number of advantages over other types of loan. Firstly, the loans can frequently be larger, and repayed over a longer period of time, making them perfect for large projects with moderate repayments. Secondly the repayments are often less as the secured nature of the loan means less risk to the lender, making them cheaper in the long-run.
What if I can’t meet the monthly payment?
You should always get in touch with the lender directly as soon as possible to try and arrange an alternative payment strategy. If you cannot keep up with the payments, your home will be at risk of being reposessed, and you could end up with a CCJ.
What about early repayment?
You should check the terms of your loan agreement, but generally you can repay your secured loan early, however you may have to pay an early settlement penalty when doing this.
If you have any other questions regarding the terms of your secured home improvement loan, the lender will be able to answer these directly. Simply complete our free application form to get in touch direct.
