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Get a Home Improvement Loan to Cover Your Home Improvement Expenses Your house was built or bought many years ago and today it needs to be improved and repaired periodically. While home improvement is mostly about repair work, it also includes all other projects such as adding a new story, constructing additional rooms, and modernizing kitchen, etc.Hence, the expenses that homeowners would need when improving their home are somewhat considerable. And, when the homeowner’s money is not sufficient to cover the cost for home improvement, then a loan is their best option. Using the very home as collateral, you can avail of a home improvement loan from some lenders. You should be able to get your demands as regards the borrowing from the lender because of the security your collateral can offer. The interest rate on a secured home improvement loan is generally lower. In other words, you will be able to meet the expenditures on your home improvements at a lower cost. At the same time, the lower interest rate reduces the burden of the loan and paying off the loan also becomes easier. The rate of interest, however, depends on a number of factors. Lenders usually feel more secure if the loan amount being applied for is comparatively lower than the value of the collateral, and so they might reduce the interest rate to get the customer’s account. The loan maturity of a home improvement loan takes into consideration the capacity of the buyer to repay the loan. He/She can repay the amount in 5 years or 30 years.You can also ask to make partial payments in extended periods, especially if the loan amount is high. By doing this, your payment for the monthly installments will be reduced and you could use the additional amount for the home improvement.
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If the amount you require is not that big, you can opt for an unsecured home improvement loan instead; this way you don’t put your home at risk by offering it as collateral. Even without the collateral, you will be able to secure a home improvement loan from lenders who may charge you a higher rate of interest. Repayment of the unsecured loan would be either 5 years or 10 years. A lender may ask for your employment or income documents to make sure that you can repay the amount within your capacity.
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Don’t worry if you’ve got a history of bad credit. The lenders are going to take the home as collateral anyway, so they are really not at risk from the borrowers. In case of payment defaults, the lender will still be able to recover the amount by offering the borrower’s home in the market. In the case of unsecured loans however, lenders are likely to request for relevant documents related to the borrower’s repayment capacity.