A personal loan is suitable for covering home improvement expenses because home improvement is counted as a personal expense. You can borrow as much as $40,000 from a personal loan to fund your home improvement project. Unlike HELOC, personal loan is an unsecured loan that is not tied to a property. The lender will not cease your property in case you face a financial circumstance and cannot pay back.
Personal loan is the best choice for homeowners who don’t have enough equity. It is also suitable for those who plan to use their home equities for other expenses. For example, some homeowners plan on using their home equities to pay for their children’s education. It is time to take out a personal loan and carry out some makeover on your house if you owe more on the mortgage than its market value.
Personal loan is a fixed rate loan with a repayment period that last from 3 – 5 years. One benefit is that it enables you to pay off the entire loan by simply submitting the fixed monthly amount (principle + interest) until the end of the repayment period. This makes it a better choice than credit cards as credit cards allow the balance to roll over to the next month provided that you pay the interest.
The best place to find cheap personal loan is your local credit union. If you feel it is troublesome to visit your local credit union, you can sign up for online personal loan. If you apply for the loan online, you will be able to receive the funds faster. Just like bank, you also have to submit some paperwork which include documents of the financial activities in the past 2 years. If your financial documents are approved, they will send you an email that inform you about the interest rate and repayment term.
You will have to put down a digital signature on the online agreement in order for the loan to receive final approval. Once the loan is approved, you can expect to receive funding in 1 – 2 business day. With online personal loan, you can avoid paying the prepayment penalty when paying off the entire loan early. Some online personal loans like Marcus loans also waive the late and origination fee
The approval terms of the online personal loan depend on a few factors including credit score, annual income and debt to income ratio. If you have bad credit, you must rethink carefully whether to take out that loan because the interest rate you pay may be expensive, its also a good idea to review your credit profile in advance from credit agencies such as experian or transunion. If you couldn’t get an unsecured personal loan, you can turn to secured personal loan which requires you to pledge your property as a security.