Last updated: 14 October, 2020
A home improvement loan lets you borrow money to finance home renovations. Typically, these are unsecured personal loans, but you can secure them against your property, which allows you to borrow more money.
Home improvement loans, UK wide, work just like other loans. You borrow the amount you need, and repay it over a set period of time. How much you're allowed to borrow will depend on your credit rating, and your financial history.
If you need a loan for home renovation or improvements, look for the cheapest loan for the term you want to repay it over.
Before you compare home improvement loans, think about:
How much you need: Only borrow enough to cover the cost of your home improvements to avoid paying any unnecessary interest on your loan.
What you can afford to pay monthly: The term of your loan will affect how much you pay back each month. The longer the term, the cheaper your loan repayments, but the more you'll pay in interest overall.
This comparison only shows personal unsecured loans, which you can apply for without needing to secure it against your property.
If you own your home, you could apply for a secured loan instead.
No, the advertised rate is often the best rate a lender can offer. The rate you get may differ depending on:
Your age: You need to be at least 18 years old to apply for most loans, but there is also an age cut off, such as 70.
Your income: The lender uses this to work out if you can afford to repay the loan, while taking your monthly outgoings into account.
Your credit history: If you meet the lenders loan eligibility criteria, your credit history will impact what rate you get.
Where your bank account is: Some lenders offer better rates if you have an existing account with them, such as a current account or savings account.
Some rates are only available if you borrow a set amount of money, within a set term.
For example, a lender may only offer you their best rate if you borrow between £7,500 and £14,999, over a term of 1 to 5 years.
The cost of an home improvement loan will depend on various factors such as:
Type of loan, i.e. secured or unsecured
How much you borrow
How long you borrow for
Your credit history.
Having bad credit doesn’t necessarily mean you can’t get a loan. What it can mean is that you'll have fewer lenders willing to lend to you. It's also likely that you may not be able to borrow as much and have to pay a higher interest rate.
As with all credit products, there are some things you need to be aware of before taking out an home improvement loan
Penalties. If you don't keep up with repayments, you'll likely be charged penalties for missing payments.
Putting your home at risk. If your loan is secured against your home and you fail to keep up with repayments, the lender may repossess your home and sell it to recoup the debt.
If you've been unable to be accepted for an home improvement loan, or you simply want to avoid getting one, there are some options you can consider:
Remortgage your home. You could release some of the equity from your home, and borrow more from your existing lender.
Mortgage advance. You could ask you mortgage provider an additional loan, on top of your mortgage. But that would only be possible if you haven’t already borrowed the maximum amount.
Credit card. These are best suited for borrowing small amounts, which you can repay in a short period of time. If the home improvement is relatively minor, then a 0% purchase card can be a great way to fund ur home improvement, without paying any interest.
Yes, you can apply for any of the loans in this comparison, whether you own a property of not.
Yes, you can apply for an unsecured loan in joint names which could increase the amount you could borrow. However, you will both be credit checked.
This depends on the lender, with some letting you borrow up to £25,000. Use this comparison to find a lender that can offer the amount you need.
It stands for annual percentage rate, and is the interest rate you pay on the total amount you borrow.
Shop around for the lowest rate before you apply, and check your credit record is accurate to improve your chances of getting the lender's best rate.
Yes you can apply for a loan if you have bad credit, but the interest rate is normally higher so your loan will cost more.
Our comparison tables include providers we have commercial arrangements with. The number of listings in our tables can vary depending on the terms of those arrangements, as well as other market developments. They are all from lenders regulated by the Financial Conduct Authority. For more information you can also see how our website works.
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