Your home is your castle. It’s the space where we feel the most comfortable and it’s the place into which we put more money, care, attention, and passion than anywhere else in the world. We spend so much time in our homes that we want it to be perfect for ourselves, our families, and the people who visit us. What if you feel that your home is in need of improvement though? Do you go for a home improvement loan? What about home improvement loans for bad credit applicants?
Other than standard home improvement loans, how you can raise the funds you need? In this article, the Loan Princess team considers:
- re-mortgaging your property,
- using your overdraft,
- putting it on a credit card,
- asking your boss for an advance,
- welfare assistance programmes,
- credit unions, and
- personal savings.
Every year, tens of thousands of UK citizens unlock hidden value in their home by either re-mortgaging their home (switching to another mortgage provider) or taking out a second-charge loan (a “charge” loan, like your mortgage, is one where you are at risk of losing your property if you don’t keep up repayments made on it).
Whichever route they choose, homeowners take out a re-mortgage or a second-charge loan based on the difference between the value of the home and the value of the mortgage and other loans secured on it – that’s something called your equity.
Remortgages and second-charge loans generally offer very low-interest rates and the loans themselves can be taken out over a period of up to 25 years. However, if you can’t keep up with the repayments, you may lose everything. Remortgages and second-charge loans are very low in cost but very high in risk should your family finances take a significant and prolonged turn for the worse.
If you have a spare room within your overdraft, you can use that to pay for some or all of your planned expenditure on improving your home. Please make sure that you keep within your limit because the costs for using unauthorised overdrafts can be prohibitive.
Likewise, if you have a spare room within your credit card limits, you can use them for your home improvement project. Alternatively, there are many 0% credit cards onto which you could load your costs without having to pay extra in interest.
Please bear in mind that 0% credit cards only offer 0% for a limited period of time once you’ve opened your account so, if you can, try to pay everything off before you start paying interest.
Pay advance from your boss
Do you get along well with your boss? Is business going well at the moment? If so, you may find your boss surprisingly willing to help you with an interest-free loan.
When speaking with your boss, make sure that everything is written down and understood. That’s not because of a trust thing – it’s so that you both know where you stand. Disagreeing about money with your boss can make your working relationship difficult, even if neither of you wants to make the other feel uncomfortable.
In most cases, you and your boss will agree that a certain amount of the loan you’re taken is withheld from you each payday in lieu of an actual repayment. Make sure that the amount you agree on is an amount that’s comfortably affordable each payday because it’s much harder to ask for a lower deduction once the money has been borrowed than it is at the start.
Please also be aware that, if at any point of the financial year, the total combined value of money you’ve borrowed from the company is more than £10,000, your boss will have to account for it on a P11d form and both of you may be responsible for paying tax and national insurance on that amount.
Your local authority will likely have its own welfare fund if you live in England – check here for more. The Scottish and Northern Irish governments have a more centralised version of the same system.
Any assistance you draw down from a local council can be used for a variety of different purposes including help to spread the cost of furniture, household equipment, footwear, clothing, home maintenance, home improvement, and home removal. There is no automatic right to receive welfare assistance and, particularly in England, when the annual fund has run out, it has really run out.
Credit unions are local institutions designed to help local people be more responsible with their money by saving more and when they need to borrow money, they can borrow it at a much-reduced rate than they would receive from commercial lenders.
Budgeting loans may be used to pay for “maintenance, improvements, or security for your home” if you have been on one or more of the following for the last six months:
- Income Support
- Jobseeker’s Allowance (income-based)
- Employment and Support Allowance (income-related)
- Pension Credit
You can borrow between £100 and £348 if you’re single, £464 if you have a partner, and £812 if you or your partner receive Child Benefit. You generally have up to 2 years to pay the loan back.
For those on Universal Credit, you would need to apply for a Budgeting Advance.
Finding the best home improvement loans for bad credit applicants
The important thing is that, when you want to improve your home and you’re thinking about how you can fund those improvements, you make the right decision for you and your family’s financial circumstances.
Here at Loan Princess, we’re there to help find you the very cheapest home improvement loan if you choose that that’s the right path for you to get the money you need to make the very most of your home. We’re not a lender ourselves – we’re a broker. We’re like a middleman whose job is to link our borrowers with the best deals from a wide panel of lenders. Each lender tells us the type of borrower they’re happiest to work with and then our clever computer system takes all the details you tell us about yourself and we send them, together with your credit report, to those same lenders. We don’t want to waste your time or any lender’s time by proposing your loan to a company whose borrower profile is different from your financial profile.
Within seconds, we’ll get back to you with a quote – that’ll be the very best deal we can find you. Our service is free and you’re under no obligation to take out the loan we find for you.
To start your application, please click here.