How to finance your home renovation – 4 key tips from credit expert | Personal Finance | Finance
“The bank lends you the money and you promise to make payments every month (with interest) until the loan is repaid in full.”
However, if you’re planning a larger project, such as a kitchen extension or a bigger insulation project, Mr Jones said a secured loan could help.
Mr Jones said: “In addition to allowing you to borrow larger sums, banks and lenders often allow you to repay the loan over a longer period of time.
“Finally, if you have bad credit, a guarantor can help you get approved for a loan and you won’t have to use your home as security. However, your guarantor must be able to pay your debt if you can’t, which could put you in an awkward situation.”
Credit card
If you’re financing a relatively small home improvement project, you could use a credit card to pay.
Mr Jones said: “The pros of using a credit card to finance a renovation is that they are readily accessible if you have a good to excellent credit score and depending on the card, you may earn rewards for credit card spending.
“However, it is worth noting that you may not qualify for a credit limit high enough to completely finance your project, and credit card interest rates can be much higher than other options.”
