If you have been thinking of changing the interior and exterior look of your house for a long time but have not been able to put your thoughts into action due to a financial crunch, a home improvement loan is what you require.

A home improvement loan allows you to undertake a variety of home improvement tasks like:

 Adding a room or two if you find the space inside is not enough
 Getting a new heating system installed
 Getting the interior of your house designed by an interior designer
 Purchasing new furniture to replace the old
 Getting the whole of the house painted in your favourite colour
 Getting a patio laid out, if you want to dine and recreate outside the house
 Getting the electrical installation repaired

Both secured and unsecured home improvement loans are available in the UK loan market. A secured home improvement loan is secured against your house and thus has easy terms and conditions. The lender will allow you lower interest rates and longer repayment term. Unsecured home improvement loan, because of the absence of the collateral, poses a great risk to the lender and thus the terms and conditions of such a loan are quite strict. You will be charged high interest rates and the repayment term will be short. Absence of collateral, however, makes an unsecured home improvement loan a fast loan product. The application is processed very fast and the loan is sanctioned and disbursed in a short time, sometimes within forty-eight hours.

A Home improvement loan can be borrowed by a person with poor credit record also. Needless to mention that such a loan's terms and conditions will be stricter than those of a general home improvement loan due to the high risk it poses to the lender.

Though it is expected of a borrower that he/she utilises the home improvement loan for home improvement purposes only, there is no restriction as such on its use. Some borrowers use the loan amount for other purposes like paying off their credit card bills or other past debt.

If you want to sell off your house after the repair and renovation work, try and find out the current property value (CPV) of your home. In case the CPV of your house is lower than the loan amount, you may find yourself in deep trouble.

One last thing: compare the rates of the best lenders in UK before applying.




The author is a finance expert and is currently working with Shakespeare Finance Ltd.