Home improvement loans

What is a home improvement and renovation loan?

A home improvement and renovation loan provides the finance you need to improve your house or property in any way you want. Common reasons for a renovation loan are:

• kitchen renovations

• bathroom renovations

• adding a swimming pool

• energy efficiency improvements

• home repairs

• new exteriors or cladding

• adding a new room or other home extensions

• garden and landscaping improvements

• adding storage space, a garage or shed

What types of home improvement loans are available?

A unsecured personal loan

All loans offered through Harmoney are unsecured, including renovation loans.

A secured personal loan

A secured loan requires an asset to be put forward to guarantee the loan. This is often a property or the equity in the property (if the value of equity is more than the amount of the loan).

The personal loans Harmoney offers are unsecured.

Mortgage finance

Another option for homeowners is to use mortgage finance to fund renovations, taking advantage of low mortgage interest rates to save on interest costs compared to a personal loan. However, this can often be more expensive in the long term if the interest is paid over many more years than a personal loan.

Things to consider about home improvement loans

What repayments can you afford?

When applying for a home improvement loan, you should think realistically about how much you’ll be able to pay back each month. As a reputable lender, Harmoney takes care to make sure any quote will be affordable. It’s a compliance requirement that we make reasonable enquiries into your finances to check that you are borrowing within your means.

With that in mind, you should take the time to consider how much you have to borrow for your renovation project.

How flexible is the loan?

Most loan terms span years rather than months, and people’s circumstances can change in that time. That’s why it’s always a good idea to choose a flexible loan.

If you find that you’re able to repay a loan before the full term, this can reduce the amount of interest you pay, saving you money. However, some lenders charge borrowers a fee if a loan is repaid early.

At Harmoney, we don’t think that’s fair. When you have a renovation loan with us, you can repay your loan early without any fees or penalties, helping you to save money and become debt free sooner.

If you’re renovating your property with the intention of selling, and you plan to repay the loan from the sale proceeds, the flexibility to repay your loan early without having to pay a penalty is something to consider.

How much do you need to borrow?

Predicting the cost of a renovation project is more art than science, but it’s important to get this right when you’re borrowing money to finance the project. Borrowing too much could mean you’re paying interest on money you don’t need, while borrowing too little could leave you looking for additional financing to finish the project. It may be possible to top up an existing loan, but that could come with additional fees.

At Harmoney loan, we offer top-up loans to help qualifying borrowers borrow a little extra, but these generally aren’t available within 6 months of an initial loan, so the timing may not work for your project. If you think you might qualify for a top-up, get in touch with our team to talk through what options are available to you.