Today there are many options for home renovation loans available to borrowers with a considerable amount of equity in their homes. Unfortunately homeowners are finding that there’s a limited number of options for home improvement loans with no equity. This guide was designed to help homeowners finance their home repair projects with limited available cash.
When shopping for their first dream home borrowers will quickly realize that there is no perfect home on the market. Houses usually require a substantial amount of work to become the home of their dreams. This means repairs, remodeling and upgrades are always needed.
Where does a new home buyer turn to finance these projects before they’ve built up any equity in their homes? We researched the answers to help distressed borrowers find the cash they need.
Homeowners need no equity to finance these various home repairs:
- Kitchen Remodeling
- Bathroom Remodeling
- Roof Replacement
- HVAC Upgrades
- and many more…
Benefits of Home Improvement Loans with No Equity
A common type of home improvement loans are home equity lines of credit. Homeowners are able to borrow against their current home equity to finance home repair projects, appliance upgrades and more. While this type of loan is extremely attractive to most borrowers there are major pitfalls that can be avoided by taking out unsecured home improvement loans.
Home improvement loans with no equity are a much safer financing option. Defaulting on a home equity line of credit will put a house into foreclosure. Whereas unsecured personal loans, like many from peer to peer lending sites, can be eliminated during bankruptcy.
Even if borrowers have no home equity available they can still get the money they need to finance their next home improvement project at low interest rates. Typically unsecured personal loans are available to borrowers with good credit. There are even a wide variety of bad credit home improvement loans available on the market today.
Primary Benefits of Getting a Home Improvement Loans with No Equity:
- No Home Equity Required
- Less Risk than Home Equity Loans
- Available to Borrowers with Good Credit
What to Look for When Applying for Unsecured Home Improvement Loans
Borrowers shopping around for home improvement loans with no equity required will find a wide variety of options available. Care must be taken to find a loan that will meet their financial circumstances. For instance, borrowers need to review interest rates and terms closely. A low interest rate loan spread out over 60 months can end up costing much more in the long run than originally expected. In fact, the interest charges alone can cost as much as the initial loan principle.
In this situation borrowers need to identify their home improvement goals and objectives. Will they be trying to build equity in their home with the additions? Are these improvement necessary to maintain livability? Outlining expectations beforehand can help homeowners evaluate their success after the project is complete.
Where to Find Home Improvement Loans with No Equity
Unsecured Home improvement loans are available from many personal loan providers. A new alternative comes from peer to peer lending sites. These platforms connect potential borrowers to investors via their secure website. Unlike a traditional home equity line of credit these loans require no collateral to guarantee the loan. They also have low interest rates and short repayment periods.
Borrowers can find home improvement loans with no equity from peer to peer lending sites like Prosper and Lending Club. They provide an easy online application process and minimal closing costs. These loans have no restriction on use and can be used for any and all home improvement projects.
Advantages of Peer to Peer Lending for Home Improvement Loans with No Equity:
- Low Interest Rates
- Easy Online Application Process
- No Prepayment Penalty
Having no home equity is a blessing rather than a curse for some homeowners. It puts borrowers at less risk of foreclosure on their new home if they fail to repay their home equity loan – a situation that no young family wants to find themselves in. Borrowers can avoid this nightmare altogether by applying for home improvement loans with no equity requirements. Homeowners are encouraged to apply for financing at peer to peer lending sites. They offer attractive options for unsecured loans with no equity to new homeowners with good credit.