Personal loans for home improvement: 5 things to think about

If you're thinking about home improvement, you're probably also thinking about the best way to fund it. Alex.Bank may be able to help.

Whether you're looking to install some solar panels, put in a pool, add some value to your property or completely gut your current place, you'll probably need a loan.

Alex.Bank's Unsecured Personal Loan may be an option for eligible borrowers looking to fund renovations, without refinancing their home. It's unsecured (not backed by your property), with personalised rates dependent on your credit history and individual circumstances.

So today, we're taking a closer look.

1. Is refinancing the right call?

When it comes to renovating, many homeowners jump to thinking about refinancing their existing home loan.

It's an understandable thought process. Renovations involve thinking carefully about finances; but they're not necessarily mortgage-scale finances that you have to consider.

This is where a personal loan – like those offered by Alex.Bank – can be useful.

Depending on your situation, they can offer several advantages, including:

• Improved loan features (more on them in a moment)
• Avoid extra years on your mortgage
• Potentially speedier repayment

Everyone's situation is different, so it can be worth speaking to a financial professional.

But if you're juggling a project that's going to be measured in weeks and months, rather than decades, a personal loan can be a simpler option — noting that personal loans generally have higher interest rates than home loans and may suit smaller renovation budgets and shorter timeframes.

2. What sort of lender should you use?

There are lots of lenders in the Aussie market.

So it makes sense to look for one that can make the process straightforward.

Alex.Bank is a digital lender that offers unsecured personal loans, with a straightforward online application.

With Alex.Bank, eligible borrowers can apply for an unsecured personal loan for home renovations for amounts up to $50,000 (subject to approval).

3. What sort of loan features should you look for?

Personal loans aren't created equal. It's important to look closely at the features they include, as this can affect the total cost of the loan.

Let's take a look at some of the key features included with an Alex.Bank loan.

• Personalised interest rate
• $0 Establishment fee
• $0 Monthly account fees
• No early repayment fees

Choosing features like low or no fees and the flexibility to make extra repayments can help you manage the total cost of your loan — especially if you're aiming to pay it off sooner.

4. How soon can you get started?

Home renovations have a lot of moving parts.

Material availability doesn't always align with a tradie's availability to do the work...and neither may necessarily align with your preferred schedule.

So in addition to budgeting funds, make sure you're budgeting extra time, too.

But let's say you do manage to line everything up. You'll need to have funds ready to go, too.

This is where Alex.Bank can help.

The application process typically takes around 5 minutes to complete. If approved, you can receive confirmation in as little as one business day (timeframes can vary depending on your circumstances and any required checks).

Once you've signed your contract, funds are generally transferred to your nominated account on the same day, so you can get your reno project moving.

5. What changes do you want to make?

Last -- but absolutely not least! -- what sort of changes do you actually want to make to your home?

Just as importantly, what sort of changes will you need to make to fit them in?

Change begets change and renovations are no exception.

For example, installing solar panels may mean that your roof needs additional work to accommodate them.

Turning multiple rooms into one open-plan space can mean that structural reinforcement is required.

It's best to identify these potential issues before you apply for a loan.

To use a builder's saying, "Measure twice, cut once". The same applies to being prepared with your budget.

So, make sure you get all your quotes in order before applying for a personal loan.

Learn more about personal loans with Alex.Bank