Are you planning to start a home improvement project or perform some much-needed maintenance, such as replacing the roof? Fixing up your home can be a fun and exciting way to freshen its appearance and potentially add resale value. However, many projects will cost thousands of dollars that you may not have immediately available.
For this reason, you may need to consider financing options. While you could get the funding you need from a brick-and-mortar lender, applying for an online loan will be much quicker and more convenient. Here’s what borrowers need to know about online loans.
Types of online loans
Here are some different types of online loans and how they can help your home improvement project:
Installment loans
Installment loans are loans that let you borrow a lump sum of money. Then, you can pay the funds back over the next 12 to 60 months. These loans generally have fixed interest rates, so the payments will be consistent and predictable.
Installment loans are great options when you know in advance how much you plan on spending and plan on buying everything you need upfront. If there will be contractors involved, these funds can also make it easier to make deposits and pay them for their services on time.
Lines of credit
A line of credit is a flexible loan option from a lender that will allow you to borrow funds. These types of loans are flexible, allowing you to withdraw as much or as little as you need up to a certain limit.
When it comes to home improvement projects where the costs may be variable, and the timing may be longer, having a line of credit can be a great choice. Rather than over-borrowing a lump-sum amount with an installment loan, you’re allowed to take funds from a line of credit only when you want to. This can help keep the interest charges to a minimum.
Payday loans
A payday loan is a small fast cash loan which will essentially give you an advancement on an upcoming paycheck. In exchange, you will be charged a fee and agree to repay the loan within the next two to four weeks.
For smaller projects that don’t require as much capital, a payday loan can be a convenient way to get the money you need quickly. Payday loans are also generally very friendly to people who have had trouble with credit in the past and who may not qualify for an installment loan or a line of credit.
How to decide on the best home improvement loan
There are many factors to consider when trying to get financing for a home improvement project. Here are a few important points to keep in mind:
- How much money you need: If this will be a larger project, then a payday loan may not give you enough money. Instead, consider an installment loan or a line of credit to get a higher dollar amount.
- How long the project will take: If you plan on completing this project over the next several months, then you may need the flexibility of a line of credit. Again, this will allow you to keep your interest charges down and borrow only what you need.
- Your financial eligibility: Installment loans and lines of credit may have more competitive interest rates. However, some may be more suited for applicants with a higher credit rating. If you’ve had financial trouble or credit problems in the past, then you may have better luck applying for a payday loan.
Which loan is right for me?
Online loans can be a great way to get the financing you need to complete your next home improvement for project. From installment loans to lines of credit, they’ll provide the funding and flexibility you need to stay on track. Applicants should consider the scope of work and their own financial situation, and go with the option they believe will be best suited for them.
