Smart Financing: Using Personal Loans for Home Improvements

Are you looking to tackle a new home project but aren’t sure you have the financial capital to get started? A personal loan can be a helpful tool for reaching your financial goals and making improvements around your home! As a local credit union in Lancaster County, Lanco FCU has some of the best options and opportunities for personal loans and other financial tools that you can use to make a lasting change.

Whether you’re already a member or exploring credit union membership, we’re here to help as you take on financial responsibilities and work to improve your property’s value. If a personal loan is the right fit for your plans, we’ll be ready to help you get started.

Pros and Cons of Personal Loans for Home Upgrades

When you own a home, making improvements through upgrades and projects can be a great way to build on your home’s value. As with any financial decision, it is important to understand what is involved before deciding to take out a personal loan.

A personal loan is one of the most convenient and straightforward financing options available to our members, but financial tools aren’t one-size-fits-all. Our lenders will consider things like your credit score, debt-to-income ratio, income, and other factors to determine your eligibility for a personal loan. Always take the time to weigh your options and evaluate what you really need to make the most of your situation.

How to Take Out A Loan For Home Improvement

The convenience of a personal loan is that you can use it for any number of purposes. Unlike car loans or other kinds of loans, you have the freedom to use the money you receive for many home improvement ideas. For example, you might use the proceeds from a personal loan to install solar panels, a new pool, or a kitchen remodel.

Financing renovations with a personal loan may require some extra planning compared to using a personal loan for other reasons. Here’s what you should do if you want to use a personal loan for home improvements:

1. Evaluate Your Loan Needs

How much funding will you need? At Lanco FCU, personal loans are available for up to $20,000. For larger projects, you may want to break the work into phases to align with this financing limit. Getting detailed estimates from contractors is critical, or making a full budget for yourself if you have a DIY plan.

2. Prepare Your Application Materials

 The application process for a credit union personal loan is more straightforward than applying for other types of loans where collateral is involved. However, you should still collect financial statements, estimates, or other information that you may want to share to support your loan application.

3. Compare Your Options & Apply

Personal loans are unsecured, which might not provide the best rates and term options for the value you want. If you have equity available, consider the Home Equity Line of Credit (HELOC) or other credit and loan options that might fit your needs. Our team is here to help with any questions you may have.

4. Upon Approval, Receive Loan

We provide a streamlined lending experience for our members, disbursing funds soon after approval. We can apply your funds directly to your bank account for maximum convenience!

5. Repay Your Loan

Once you’ve used this capital to improve your home, you will begin paying off your loan according to the agreed-upon terms. This might look like monthly payments for up to five years or as little as a year, depending on your loan amount and your ability to pay back the loan.

When to Use Personal Loans for Home Improvement

There are many situations in which you might need capital quickly or might want to take on larger projects than you can easily manage with your current finances. Personal loans are most commonly sought when you:

• Need to cover emergency home repairs, such as roof damage or plumbing disasters. Unsecured loans can often be received relatively quickly, providing an excellent option when speed is essential.
• Want to pay for a one-time home improvement project, such as remodeling. Financing for smaller, repeat projects might be better serviced by a HELOC or other line of credit.
• You don’t have home equity or a vehicle to use as collateral. In this case, a personal loan could be a practical solution. Most personal loans are unsecured, so you don’t need to use your home or car to qualify. While the interest rate may be higher than with a secured option like a HELOC, a personal loan still gives you access to funds, even if you don’t have collateral available.

A personal loan for home improvement is most suitable for individuals with good credit, who are looking to build equity in their home, and who are confident that they only need a limited amount of money. If you don’t fit into any of these, you might be better off seeking a HELOC or other financial option.

Discuss Your Home Improvement Loan Options with Us!

Are you ready to see your home completely transformed? We want to help make that dream a reality. If you have a membership with Lanco FCU, you already have access to some of the most useful and convenient financial tools available to Lancaster County! Not a member yet? No problem! We offer membership to anyone who lives or works within Lancaster County as a service to those who support and make up our wonderful community.

So don’t hesitate to start the conversation about what we can do for you, whether you are a current member or are looking for new opportunities. Call today or visit one of our convenient locations to begin your new financial journey!