Tag Archives: unsecured personal loans
Are Unsecured Personal Loans Good For Home Improvements
Many advertisements on the internet and on other media suggest that you can use certain unsecured personal loans for whatever purpose including making home improvements. Have you ever wondered whether personal loans are really such a good tool for undertaking home improvement projects? Here are some thoughts about the issue.
Making home improvements often requires financing but not any financial product will do. It needs to provide certain flexibility that is needed to complete any home improvement project. Unsecured personal loans are really a flexible source of financing. Do they have what is needed to finance a home improvement project?
Loan Amount
Unsecured loans do not carry very high amounts and thus, it really depends on the type of improvements you need to make whether an unsecured loan can provide the needed funds or not. Unsecured personal loans can easily provide funds to finance home improvement projects from a couple of hundred dollars up to tens of thousands.
Home equity loans (secured loans), on the other hand, can reach hundred of thousands dollars that can fund more expensive home improvements projects like rebuilding a property, adding floors to a building, etc. Thus, depending on the kind of project you have in mind you will need a secured loan or you may do fine with an unsecured loan.
Overall Costs
The interest rate of unsecured loans is higher than the rate charged for home equity loans or lines of credit and thus, the amount of money you will spend on interests over the whole life of the loan will increase with the loan amount and with every year of the repayment program.
Thus, unsecured loans can be really expensive for financing home improvement projects if you need funds to finance an expensive project and you want to repay the loan in several installments. Anything longer than 48 months will turn out rather expensive compared with a home equity loan of up to 5 years.
Repayment Programs
Unsecured loans do not have long repayment programs. However, given that almost no one undertaking a home improvement project wants to finance for more than 5 years, truth is that unsecured loans do not present limitations on this matter. An unsecured loan repayment program can last from a couple of months up to five years.
Home equity loans for home improvements, on the other hand can be repaid in up to 15 years. These periods of time are useless for inexpensive home improvement projects but can be very useful for high cost home improvements. So, it definitely depends on the cost of the project whether you will do better with an unsecured loan or with a home equity loan or line of credit.
Approval
There are not many differences between the requirements needed to get an unsecured loan or a secured loan when you are using the money for home improvements because in either case you do own a property. However, the loan approval processes of unsecured loans are faster due to the fact that there is very little paperwork to do.
Unsecured personal loans: A better alternative to credit cards
Plastic money is not only convenient to use but people also feel good when using it. The downside is that the credit card companies charge a very high interest rate in case of credit cards. If you want to enjoy the benefits of unsecured finance without having to pay high interest rates, you can look for some other better choices. Unsecured personal loans are one of them. Like credit cards, these loans also do not require any security and you are free to use the loan amount in any way you want. The biggest advantage is that the interest rate is quite lower when compared to credit cards. So, you may consider switching to unsecured personal loans to gain some advantage.
Unsecured personal loans are very much popular in the UK financial market. According to the results of a research carried out by a price comparison service site, many British women have become reliant on unsecured finance in order to fund their spending. The research reveals that women in Britain have unsecured loans amounting to a whopping twenty billion pounds, and this is apart from a further four and a half billion pounds outstanding on their overdraft facilities. It was observed that the British women use the major part of their unsecured funding for shopping, fashion and beauty.
Online lending has added another feather to the already competitive UK financial market. Now, people prefer taking out loans through online channels. They do not have time to personally meet various loan officers from different companies to get a loan. It is easier for them to apply with a reputed online broker, who can give them a number of options (loan plans) to choose from. There are many lenders who provide unsecured personal loans at competitive rates. So, if you have made up your mind you can contact them online and get some of the best loan deals available in the market.