Everyone would want only the best for their family when it comes to comfort and standard of living at home. We all want the best house, the best car, the best furniture, the best appliances, gadgets, and more. Have you wanted to get that home renovation done for quite some time now but still haven’t had enough budget? How about that dream kitchen countertop? Or that dream veranda you’ve always wanted in your backyard? It’s most likely that you’ll need to apply for a loan to get the project done. While there are some homeowners that are able to fund their home renovation projects with their savings or regular income, there are some that use their credit cards. Credit cards however have high interest rates and finance fees. Getting a home renovation loan with good credit is easy but it’s not the same case if you have bad credit history. But all is not lost yet even with bad credit. You just need to be able to meet the lender’s requirements and compare loan terms from different ones.
As you get started on your mission for that home renovation project, bear in mind that it’s not an overnight process and that it will take time. Try to increase your credit score if you can. If you have a credit score of 600 and below, try to take credit repair steps first before you apply for a bad credit home renovation loan. An additional of 20 to 30 points in a short time before you apply many not really be significant credit rate improvement but it can help you lower down your interest rate for the loan. Home renovation loans charge 14% interest rate for borrowers with a credit score of around 580. If you have a credit score of around 610, the interest rate goes down to 11 percent.
Since lending to people with bad credit entails more risk for lenders, they want to minimize this with something that will secure the loan. This means that you will need some form of collateral to serve as security for the loan. Collateral may come in the form of properties that have value like jewelry, vehicle title, or real estate property. If you’re the owner of your home, you can ask about home equity renovation loan. The money borrowed from your home equity may be used to fund your home renovation project.
Another way for you to secure your loan with the lender is to have a co-signer for the loan. This is good for you if your collateral isn’t enough on the part of the lender to secure the loan. If you have a friend, a relative, or family member that has good credit history, then they will be perfect as a co-signee for the loan. In the event that a borrower defaults on his obligations, the co-signee takes over the responsibility of repaying the loan.
Lastly, be sure that you deal with a bad credit lending specialist. There are many lenders that don’t even accommodate an application once they see a low credit score. Companies like BHM Financial specialize in meeting your bad credit needs. They will help you with your bad credit loan as well as make sure it is exactly what you need.