Home improvement loans

What is a home improvement and renovation loan?

A home improvement and renovation loan is a type of personal loan which you can use to finance home improvement projects, whether it’s DIY or a large-scale professional operation.

Common reasons people take out renovation loans include kitchen renovations, home repairs, putting in swimming pools, bathrooms renovations and solar panel and water tank installations.

What types of home improvement loans are available?

Unsecured personal loans

An unsecured personal loan does not require you to offer up an asset as security, which means your home, car and other assets are not collateral when you take out this type of loan.

All Harmoney loans are unsecured.

Secured personal loans

Secured personal loans require an asset to be put forward as security to guarantee the loan. In the case of a renovation loan this could be the house itself or another asset like a vehicle. If the loan is defaulted, the asset is repossessed by the loan company.

Harmoney does not offer secured personal loans.

Mortgage finance

Homeowners are often tempted to borrow extra money on their mortgage to finance renovations. While it may seem cost effective to use the low-interest rate mortgage, the savings are often negated by the far longer term of the loan when compared with a short-term personal loan.

For more information read our article on comparing interest cost and interest rate.

Things to consider about home improvement loans

What repayments can you afford?

Before applying for your home improvement loan, take a moment to consider the repayments and decide how much you can realistically afford to pay per month. As reputable lenders, Harmoney assesses your finances and takes the utmost care to ensure you can afford to repay your loan.

You can use our free personal loan calculator to get an idea of how your repayments will look to help with budgeting and planning your renovation project.

How flexible is the loan?

Harmoney loans have either three-year or five-year terms, and we know a lot can change in that time. Unlike other lenders we do not charge extra fees for paying back your loan early, so if you are able to free yourself from debt sooner than you at first thought we think that’s great.

Paying back your loan early reduces the overall cost of your renovation loan as you avoid accruing extra interest.

How much do you need to borrow?

We encourage you to consider your budget carefully before applying for a home improvement loan, as borrowing too much or too little can make things harder for you. Borrowing more money than you need means paying extra interest, while not borrowing enough money can leave you unable to finance your renovation properly.

If you require extra money, you may be eligible to take advantage of a top-up loan, which will allow you to borrow more money on top of your current loan. You’ll need to have been making regular payments on your loan for at least six months and have maintained good credit. Our team can discuss your top-up options with you.