If you’d like to make home improvements yet can’t fund them upfront, you may be considering taking out a home improvement loan.
What are home improvement loans?
They enable homeowners to borrow a lump sum to cover the costs of their home renovations, including kitchen and bathroom restorations or accessibility adaptations.
There are two main types:
Secured
Often utilised by those needing to borrow larger sums – typically over £25,000 – these loans are usually secured against the borrower’s property. This means that if you can’t fully repay the loan, your home could be repossessed. Also, you could find yourself paying a variable rate, making your monthly payments unpredictable. These types of loans cannot be taken lightly.
Unsecured
Less risk is involved with unsecured loans, as you don’t stand to lose your home should you not be able to keep up the repayments (though this could incur penalty charges). They tend to be taken by those borrowing smaller sums, over a shorter period.
Perhaps surprisingly, you can spend the money on other things, though certain restrictions may apply.
How does a home improvement loan work?
Application-wise, they generally work in much the same way as personal loans.
Weigh up your options and ensure you qualify before applying. You’ll need to prove your income and identity. The lender will evaluate your application – including your credit history – and should get back to you within five working days; some lenders, straight away. It’s worth noting that a good credit history often secures better rates.
If it’s a ‘yes’, you should receive the money within a few working days; sometimes on the same day. You can start work on your home and repay the loan in monthly instalments, with added interest.
Is a home improvement loan right for you?
Before taking out any loan, give it careful consideration. If you do go ahead, aim to pay it off as soon as possible, though check if this will incur additional charges. Talk to a qualified, experienced specialist who can offer solid advice.
Keep in mind that home improvements may increase your property’s value, but this isn’t always the case.
How else could you fund home renovations?
Other options for funding home improvements are:
- Saving for them: It may mean waiting but it’s a safe and viable option.
- Home equity loan: This is a secured loan; you can borrow against any additional equity your home has acquired since you purchased it.
- Remortgaging: Check this is feasible, and whether the lender has any spending restrictions.
- 0% credit card: This may work for small-scale improvements; it wouldn’t cost you as much as a loan due to a period of no interest credit. You’d also be covered with Section 75 if you were using a card for your home improvement purchases.
- Grants: You may be eligible for government or charity grants.
To find out more about home improvement financing solutions that could work for you, call our team on 0345 450 4660.
Approved by The Openwork Partnership on 16/10/2025.
