Maintaining a home
Should you apply for a renovation loan?
24 April 2019
Renovating your home can be an incredibly exciting experience. You can get that modern kitchen you’ve been dreaming of, upgrade your outdated bathroom, or just finally get rid of that worse-for-wear looking carpet. As easy as it is to let your imagination carry you away, there’s often one thing sure to bring you back down to the ground quick smart; finances.
Unfortunately, that updated stove top (probably) isn’t going to pay for itself. Fortunately, there are a few options that you can explore to potentially pay for your renovation. Of course, everyone’s needs and circumstances are different, so it’s important to really consider your options before you decide how you want to pay for your renovation.
Apply for a personal loan
Unsecured personal loans can be used for a number of different things, including renovations. They can be a really quick, convenient way to get a boost of funds, so you can potentially get on with your renovations without having to wait too long.
Generally, personal loans are less likely to suit someone with major costs (like a total fit out of their entire property, for example), but are usually ideal for small to mid-sized needs.
Top up your home loan
If you’ve built up enough equity, increasing your home loan with an ‘Add’ or ‘Equity’ Loan might be a viable option. They could help you obtain the funds you need to complete your dream renovation.
An Add Loan works by adding the amount you want to borrow onto your existing home loan. That will mean your current repayment amount will increase, but the remaining loan term and loan type won’t change. An Equity Loan, on the other hand, is an entirely new loan. It’s granted based on the equity you’ve built up on your current loan.
Use your credit card
If you’re able to budget right and your renovation costs aren’t too much (or can be spaced out over time without you getting impatient), you can potentially use a credit card to fund your fit out. There are a lot of options out there when it comes to interest rates and benefits, which are all important to consider when deciding the best credit card option for you and your needs.
Renovate on a tight budget
Of course, trying to find an instant source of money for your renovations isn’t the only option. There’s also the potential to be savvy with your savings and focus more on cutting down the overall costs of giving your property that much needed facelift.
It doesn’t necessarily mean you have to give up your big renovation dreams, either. Check out our 4 tips for making your renovation more affordable and see if being a bit thrifty could be the solution for you.
Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product