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Home improvements, like converting an attic or installing a new kitchen, increase your home’s value and improve your comfort. But these projects are rather costly, and saving up isn’t always possible, especially with a growing family. A home improvement loan allows you to make these changes now and pay off the expenses gradually so that you can manage your budget while enjoying a better living space.

Before you commit, make sure to compare loan options to find the best terms and personalised rates.

How to apply for a home improvement loans

Comparing secured loans is crucial to find the best terms and rates. Here are the steps to take during the application process:

1.

Compare loans

Look at various options and consider factors such as the APR (Annual Percentage Rate), monthly repayments, and the total amount to be repaid. This will help you find the most cost-effective loan for home improvement.

2.

Choose a deal

Select a deal and provider that offers the best combination of APR, term length, and monthly payments. Ensure that the home renovation loan is affordable based on your financial situation.

3.

Fill out the application form

Provide your name, address, and bank details, along with a summary of your monthly income and expenses. Double-check all information for accuracy to avoid any issues during processing.

Loan calculator

What are you borrowing for?
How much would you like to borrow?
£

This helps you get a more accurate finance estimate

Borrowing
£16,000.00
Monthly repayment
£408.79
Total repayable
£24,527.68
Interest rate
19.9%
Length of Loan
60 months
Amount of interest
£8,527.68
Get results

Representative example

With a representative APR of 19,9% (fixed) for a £5,000 loan over 5 years, your monthly repayment would be £127.74, and the total amount repayable would be £7,664.40. Please note, the rate offered may vary based on your financial circumstances and loan amount.

What is a home improvement loan?

A home improvement loan is money borrowed to make changes to your home, like remodelling the kitchen or bathroom, repairing the roof, upgrading your boiler, landscaping, installing energy-efficient upgrades, replacing flooring, or simply making necessary house repairs.

Improvements funded by these loans are typically aimed at increasing the value of your property. This will be beneficial if (or when) you decide to sell or refinance your home in the future.

How do home improvement loans work?

Here’s how you typically obtain and repay a home renovation loan:

  1. Compare and apply for a loan. Look at different loan options and consider interest rates, monthly repayments, fees, and the total repayment amount.
  2. Approval and funding. Apply for your chosen loan. You may need to provide more information, but receiving the funds won’t take much time once approved.
  3. Invest in your home. Use the money to renovate and improve your home.
  4. Repay the loan. Begin making fixed monthly payments as agreed. You can pay it off early, but there might be an early repayment charge for doing so.

To get a loan, you usually need a good credit rating, enough income to make payments, a reasonable debt-to-income ratio, and sometimes home equity. You will also have to show evidence of your income and details about your renovation plans.

What are the different types of home refurbishment loans?

A home improvement loan could be unsecured, like a personal loan, which means that your property won’t be used as collateral. These loans usually range from £1,000 to £25,000 (and up to £50,000 for existing customers at some banks). An unsecured loan has fixed interest rates and terms usually up to 10 years, with shorter terms increasing your monthly payments but lowering overall interest.

There are also secured loans, which require collateral (the property, in this instance) and allow for larger borrowings (from £10,000 to potentially £500,000). They usually come with lower interest rates than unsecured loans and more extended repayment periods of 5 to 30 years. While this results in lower monthly payments, it's important to note that opting for a longer term may lead to higher total interest costs over the life of the loan.

If you need better credit, a guarantor can help you get approved without using your home as security. However, the borrowing amounts are limited. Plus, if you can’t afford to repay, your guarantor must cover the debt, which can create awkward situations.

What are the pros and cons of a home improvement loan?

ProsCons
Quick access to funds — With quick access to funds, you can complete home improvements faster.Higher repayment amount — Like all loans, you’ll pay back more than you borrow due to interest.
Increased home value — Making good improvements to your home will increase its value.Risk of repossession — With a secured loan, your home could be repossessed if you can’t make payments.
Variety of options — You have options like secured and unsecured loans to choose from.Higher costs with bad credit — If you have bad credit, the loan will come with higher costs.

What should I consider when choosing a home improvement loan?

Before choosing a home improvement loan, think about:

  • Loan amount — Borrow only what you really need to minimise interest costs.
  • Interest rate — Look for loans with low, fixed rates to keep payments consistent. Variable rates can change monthly, which introduces uncertainty into your budgeting.
  • Loan duration — Shorter terms cost less overall, but make sure the monthly payments fit your budget.
  • Fees — When considering loans, it's important to remember that both fees and interest can be involved. Keep an eye out for these additional costs.
  • Monthly payments — If you go for longer terms, you’ll pay less each month. However, this also means the lender will collect more interest over the loan’s term.
  • Credit score — Homeowners with lower credit scores will find getting approved for secured loans easier, using their home as security.
  • Early repayment — Be sure to check for any penalties if you are considering paying off the loan early.

Can I get a home improvements loan with bad credit?

Even if your credit is not good, you can still get approved for a home improvement loan. However, expect lower borrowing limits and higher interest rates to offset the risk for lenders. They may also require your home as collateral, so you’ll risk losing it if you miss payments.

If you’re not in a rush, consider improving your credit score because it gives you a better chance of qualifying when you eventually apply. It will also help you get better loan terms. If you’re in a hurry to renovate, guarantor loans could be a more suitable option.

What are the eligibility criteria?

needs
To apply for a loan you needRequirements
Your personal details, such as your name and birthdateYou need to be at least 18 years old—some lenders may require you to be older.
Your bank account informationDemonstrating a steady income is crucial as it shows you can handle monthly repayments.
Your current address and addresses from the last three yearsAn active bank account is required for the loan transactions.
Details about your jobLenders will assess if you can comfortably afford the loan repayments without compromising your financial health.
You need to be a UK resident and have a permanent address

All it takes to compare loans is a bit of information about you and your finances.

Compare loans

How can I find a home improvement loan?

Comparing home improvement loans is easy with a comparison tool. Answer a few questions, and it will show you loans you’re likely to qualify for without impacting your credit history.

You can compare both unsecured personal loans and secured homeowner loans based on:

  • The amount you want to borrow
  • Your preferred repayment period

Why compare homeowner loans through Moneyrepublic?

  • 1Identify the homeowner loans with the highest approval chances.
  • 2Receive loan options tailored to your specific needs.
  • 3Compare personal homeowner loans without impacting your credit score.

FAQ

Is it worth getting a loan for home improvements?

Yes, if the upgrades boost the value of your home, improve your living conditions, or save on future maintenance costs. Just make sure the loan terms fit your financial situation.

Who is eligible for a home improvement loan?

To qualify for a home improvement loan in the UK, you must meet specific criteria:

  • Be at least 18 years of age;
  • Be a UK resident;
  • Have stable employment or proof of regular income;
  • Have a good credit rating (preferable);
  • Own the property or have a mortgage on it.

Check with individual lenders for their specific requirements.

Can I get a joint home improvement loan?

Yes, many lenders allow multiple people to apply for a loan together. This often increases the chances of approval and could get you better loan terms. Both applicants' incomes and credit histories are taken into account, and both are equally responsible for repaying the loan.

What alternatives are there to a home improvement loan?

Here are other options instead of taking out a renovation loan:

  • Personal savings;
  • Home equity line of credit;
  • Credit card for smaller projects (rates are higher);
  • Refinancing (include renovation costs when refinancing your existing mortgage);
  • Government grants or programmes for specific improvements;
  • Vendor financing (rare but available from some contractors).

What is the most I can borrow for a home improvement loan?

It’s common for home improvement loans to go up to £50,000. Some lenders offer higher amounts, occasionally up to £500,000 and sometimes even more.

Can I add to my mortgage for home improvements?

Yes, this can be done by refinancing your mortgage or applying for a further advance. Refinancing involves renegotiating your mortgage to increase the amount borrowed. A further advance means borrowing more money using the value of your home as security, and it will be associated with a lower interest rate.

What is the difference between a home equity loan and a home improvement loan?

A home equity loan uses your home as collateral. It can be used for various purposes, such as to fund renovations. It typically has lower interest rates. A home improvement loan is designed specifically to fund home renovations. It can be secured or unsecured, with varying terms and interest rates depending on the lender and loan type.

Are there any hidden fees or charges?

There might be extra fees, so read the loan terms thoroughly to know all possible costs in advance. When getting a home improvement loan, watch out for possible additional costs like origination charges for processing, late payment fees, annual fees for upkeep, insurance costs, and early prepayment penalties.

What is the minimum and maximum loan amount I can borrow?

The minimum loan amount for home improvements starts at around £1,000. In comparison, the maximum can range from £25,000 to £100,000 or more, depending on the lender and your financial qualifications. Loans can go as high as £500,000, but receiving that much is rare.

Is this loan secured or unsecured?

Whether you get a secured or unsecured home improvement loan depends on the specific loan product you choose and the terms offered by the lender. Be sure to check with the lender to understand whether the loan requires collateral or not before making a decision.