Home improvement loans
Personal loans can help you spread the cost of home improvements, from smaller updates to bigger renovation or extension projects.
Personal loans for home improvement
A personal loan can be a good way to fund home improvements, especially if you want to upgrade your space without dipping into savings or remortgaging your home.
Loans can help you start important jobs right away, like replacing a boiler, roof repairs, or energy-efficient improvements. They can also help you start longer-term plans, such as a kitchen remodel or extension, sooner.
Instead of putting projects on hold or managing different payment methods, you can cover the cost in one go and repay it through fixed monthly instalments that are easier to budget for.
Through ClearScore, you can check your eligibility for personal loans and see how much you could borrow before applying. Depending on the lender, you could access a loan of up to £25,000. This can give you the flexibility to take on projects of all sizes, from small changes to major home improvements.
What can you use a home improvement loan for?
You can use a home improvement loan to cover a wide range of projects around your home, such as:
Loft conversions
Turning unused loft space into an extra bedroom, office or living area. A loan could help cover structural work, insulation, stairs, windows and electrics.
Extensions
Adding extra space to your home, such as a larger kitchen or extra rooms. Costs may include building work, materials, plumbing and planning-related expenses.
Renovations
Updating or restoring parts of your home. This could include rewiring, replacing flooring, replastering walls, or updating older rooms.
New kitchens or bathrooms
Covering the cost of units, appliances, fixtures, tiling and installation.
Garage conversions
Transforming an unused garage into a home office, gym, or extra living space. This could involve insulation, flooring, and electrics.
Conservatories
Create extra living or dining space, including glazing, foundations and heating where needed.
General improvements
Smaller projects like new windows or doors, improved insulation, heating upgrades, or decorating.
ClearScore can help you find personal loans:
- From £1,000 to £25,000
- Over 1 to 5 years
- No impact to your credit score
- Personalised offers tailored to your needs
- Know what you'll repay each month and over what term, upfront
Representative 48.7% APR
*Vanquis Bank acts as a credit broker, not a lender, introducing customers to our partner ClearScore. ClearScore acts as a credit broker and not as a lender. If you take out a loan, Vanquis Bank and ClearScore receive a commission payment from your lender. If you’d like further information about the commission Vanquis Bank or ClearScore receive as a result of your loan, please contact us. We will not charge you a fee for our services. Loans can only be offered to customers aged 18 or over. Credit is subject to status. Terms and conditions apply.
Can I get a home improvement loan with bad credit?
Yes, it’s possible to get a home improvement loan with bad credit, but lenders see a lower credit score or limited credit history as a higher risk. This might result in higher interest rates, smaller loan amounts, or stricter eligibility checks. Some lenders may offer a secured loan, where borrowing is tied to an asset such as your home, which can increase approval chances but also carries a risk if repayments aren’t met.
Some lenders specialise in loans for people with bad credit or little to no credit history. Before applying, it’s important to check your eligibility, as being declined could impact your credit score.
Our loans expert says…
“Personal loans can be a useful way to fund home improvements, giving you the funds upfront to complete projects like a kitchen upgrade loft conversion. It’s important to only borrow what you need and make sure the repayments fit comfortably within your budget. Review your circumstances carefully and checkyour eligibility before applying to help you find the right option without impacting your credit score.”
Chloe Hewson, Strategic Partnerships Manager at Vanquis.
Unsecured vs secured home improvement loans
A personal loan for home improvements can be either secured or unsecured.
With a secured loan, you need to provide collateral – an asset of similar value to the amount you’re borrowing. When using a secured loan for home improvements, your property is often used as security. If you’re unable to keep up with repayments, the lender may repossess the asset/your property to recover the money owed.
Unsecured personal loans don’t need collateral. People often use them for home improvements. This is common for smaller projects, like redecorating or minor renovations.
Missed or late repayments on your loan can damage your credit score. The lender can also take action to recover the unpaid balance, plus any interest and fees owed.
Other home improvement loan options
Borrowing more on your mortgage (further advance or remortgage):
- Benefit: Interest rates are usually lower than other borrowing options. Plus, you can spread repayments over a longer time.
- Disadvantage: You may pay more interest overall due to the longer term, and your home may be at risk if you can’t keep up with repayments.
Credit cards:
- Benefit: Some credit cards have interest-free periods for purchases. This can help with small projects or short-term borrowing.
- Disadvantage: Interest rates may rise after the promotional period ends. If not managed well, it’s easy to build up debt.
Using savings or paying as you go:
- Benefit: You won’t pay any interest or take on debt, which makes this the lowest-risk option.
- Disadvantage: It may limit the size or speed of your project, especially if your savings are low. Depending on your savings account, you may get charged for taking money out. So, it’s good to check this before beforehand.
DIY to reduce costs:
- Benefit: Doing some work yourself or getting help from friends or family can lower costs and reduce borrowing.
- Disadvantage: Fixing mistakes can be time-consuming. If you need professional work later, it may cost more.
FAQs
Can I borrow money against my house for improvements?
Yes, you can borrow money against your home for improvements. You can choose to take a further advance from your current lender, remortgage to get extra funds, or use a second charge loan (secured) while keeping your existing mortgage.
The amount you can borrow depends on your income, credit history, and the equity you have after borrowing. This can save money for big projects, but it will increase your monthly payments and total debt. If you can’t keep up with repayments, your home might be at risk.
How do people finance house renovations?
People do this in a few different ways, depending on their budget and the size of the project. Some use savings to avoid borrowing, which works well for smaller renovations. Others take out personal loans. These types of loans offer fixed repayments and don’t always require using your home as security.
For bigger renovations, secured loans or mortgage options (like remortgaging) are usually better. They often have lower interest rates. Some people also use credit cards for smaller, short-term costs. But the right option depends on how much you need to borrow and what you can comfortably afford to repay.
Is it better to remortgage or get a loan for home improvements?
It depends on your situation, as both options have pros and cons.
Remortgaging can sometimes save you money, as mortgage rates are often lower than personal loan rates. This can make it a suitable option for larger home improvements or if you want to spread the cost over a longer period. But it’s important to factor in extra costs like arrangement or product fees, valuation fees, and legal costs, which can reduce or even outweigh the savings from a lower interest rate.
There may also be early repayment charges on your existing mortgage. Because the borrowing is repaid over a longer term, you could end up paying significantly more interest overall, even if the rate is lower. And, as with any mortgage borrowing, your home may be at risk if you don’t keep up with repayments.
Personal loans are usually easier to arrange and, as they’re unsecured, you don’t need to use your home as collateral. They can be a good option for smaller projects and come with fixed repayment terms, which can make budgeting easier.
As a rough guide, personal loans are often more practical for smaller, shorter-term borrowing needs, whereas remortgaging may be more suitable for larger amounts. But interest rates are usually higher than mortgage rates, and repayment terms are often shorter.
What are the risks of taking out a home improvement loan?
As with any loan, it’s important to understand the risks. You’ll still need to repay the loan in full even if the project runs into problems, like delays or unexpected costs. Interest charges can raise the total cost of borrowing. This means you might pay back more than you expected.
It’s also worth looking at the impact on your finances. Applying for several loans in a short space of time can impact your credit score. Also, missing payments can make things worse. If the loan is secured on your property, your home could be at risk if you miss repayments.
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