Renovation Loans and Remodel Loans – Unsecured and Secured Home Improvement Loans – It’s All In A Name
There are many words that describe the act of fixing up your home and the loans that go with them. Renovation loans, remodel Loans, home improvement loans and so on. These can encompass many different sub categories as well such as kitchen remodel loans, bathroom remodel loans, walk in tub loans, basement finishing loans, waterproofing loans, roofing loans, window loans, siding loans, decking loans, landscaping loans, pool loans, spa loans, and many more.
The important thing to know about these types of loans no matter what the specific name is that they usually fall into two major types of home improvement loan categories.
Secured loans mean that the loan is secured by some sort of collateral whether that is the home itself or the product being financed. Secured loans typically have a longer payback term such as 10 years, 15 years and more. Equity is usually the deciding factor in whether or not you have the option to consider a secured loan for your home improvement project.
Unsecured loans are generally underwritten by analyzing the credit, income and debt ratio of the person borrowing the money and there is no collateral involved in this process. Credit requirements are usually more strict since no collateral is involved and in the case of borrower default there is nothing for the lender to take back. In addition it is more common to see shorter term loans for unsecured home improvement loans.
If you are looking to finance any type of home improvement project you can consider both types of loans to depending on your situation.
Happy home improvements!