Loans For Home Repairs & ImprovementsHome improvement sounds like an excellent idea, and it's easy to get excited about adding a spare bedroom, sunroom, or den, remodeling your kitchen, or turning your house into Buckingham Palace. Sometimes you won't have any choice in the matter. If your family grows faster than the space available to contain it or the kids blow a hole through the roof, home improvement is on the table whether you like it or not! Whatever the reason for your project, though, you will quickly come up against the central reality of repair and improvement: it's expensive. In most cases, you'll be looking for financing, unless you've just won the lottery.
What kind of loans are reliable, affordable, and don't have a time bomb hidden in that indecipherable fine print? The following information should give you some realistic expectations of what's out there!
LightStreamA division of SunTrust Bank, LightStream offers an entirely unbeatable deal on financing for home improvement. These are unsecured loans (no equity or collateral is required), so you would expect them to have high-interest rates and low limits. Not the case with LightStream! The APRs range from just 4.29% to 13.79%, which is incredibly low for unsecured financing. The limit is as high as $100,000, also unheard of with an unsecured loan. The icing on the cake is that other than the interest you pay, there are no fees, and terms can be as long as seven years.
You may be doing a cartwheel on the way to your phone right now, but always remember that there has to be a catch with something this good. Luckily the catch, in this case, is not some hidden fee or a ballooned interest rate after a given period. The main caveat with LightStream is that you need to meet high standards to qualify. Your credit will have to be excellent, your level of income will need to be substantial, and that history of yours has to show you off as a responsible borrower.
Another thing to keep in mind is that these loans are for home improvements only! You can't borrow money for home repair and use it to fly around the world. Other lenders providing unsecured personal lending tend to let you use the money for anything, but not LightStream. If you do want to finance home improvements and you meet the required criteria, there's usually a quick turnaround on the process, and you might even receive the funds by the next day! That's a great deal all around for those who qualify, and it's worth a close look.
AvantIf your credit doesn't fit LightStream's strict criteria, don't despair! Avant's credit standards are far more lenient. Even with credit scores on the lower side, you may still qualify. The approval process is also quick, getting you fast access to the necessary funding, and the deadlines on payments are flexible, which is a nice feature. You can use the money for anything you want, not just repair or improvements to your house.
Again, don't grab your phone too fast. There's always a catch. Avant might provide a loan with great features to borrowers with less-than-perfect credit, but that cash is going to cost you a minimum APR of 9.95%. I repeat, minimum. That's higher than what most lenders charge, and the amount you can get your hands on is limited to $35,000. Depending on what you're trying to fix, that amount might be all right, but some major issues with a house can cost far more than that.
Another thing you should know is that Avant is a startup company, which can understandably make some people a little nervous. Despite that, it's worth a close look if your credit isn't up to the highest level.
Wells FargoWells Fargo is a big bank and is definitely among the best big-bank options for getting a personal loan for home improvement. With about 8,700 branches across the United States, there will be a branch not far from you. That kind of power will get you APRs as low as 6.78%, and the limit goes up to the same $100,000 that LightStream is offering. Loan terms are as long as five years, but if it's a smaller amount, you can also get a term as short as one year.
The catch? When it comes to banking, bill paying, and finances, everything is online these days. Well, you won't be applying for this online unless you're a member of team Wells Fargo. That's right, if you don't already bank with Wells Fargo, you won't be able to apply online.
ProsperProsper is a peer-to-peer lender (meaning they match lenders with borrowers) offering unsecured, personal loans through a process that tends to be very fast and far less stringent than what you'll find at a big bank. Depending on the state of your credit, you could get an APR as low as 5.99%, but that will vary for anyone whose creditworthiness looks weak. Terms are either three or five years and there are no cloak-and-dagger practices. Prosper clearly discloses all rates and fees, and you don't need a Master's Degree in finance to understand them.
So what is the double-edge of this blade, you might ask? Well, Prosper's loans are limited to $35,000, which can be ideal for a small home improvement project, but nowhere near what you'd need if you're dealing with a major fix. Even though the application and approval process is fast, you might still be looking at two weeks before those funds are available.
ConclusionRealistic expectations are just that--real. You can click you heels all day long, reciting, "There's no place like home" to your heart's content, but there's no free ticket to avoiding the potentially high costs of home repairs. None of the above options is a magic wand that's going to materialize a wad of cash and make it all right-as-rain again. There's no assurance that you will even qualify for a loan from any of them. However, these lenders are reputable and accessible and could be a significant help in getting those repairs or improvements done. If a home repair loan is on your agenda, they are great places to start.