Larry Lapidus


Is It Worth Taking Out a Loan for Home Improvements?

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Home improvements can help you make your space your own and repair any issues with your property. But they can also be expensive, and figuring out how to pay for them can get complicated. One way some homeowners approach this is by taking out a loan to pay for renovations. Loans aren’t for everyone, though, and it’s important to consider all the necessary factors before deciding to take the plunge.

Reasons to Consider a Loan

There are many reasons a homeowner may decide to get a loan to finance their improvements. Sometimes taking out a loan can help you get to the next level in your home improvement process faster and better than you may be able to otherwise. Think of it this way: businesses take out loans all the time, and they are often a necessary part of turning ideas into reality. The same is true in your home; a loan could be an investment in your future in the space.

• Some projects are too expensive to realistically pay for upfront. Certain renovations are more expensive than others by nature; for example, the average kitchen remodel costs $22,932. For many homeowners, it may not be possible to have that much on hand, and building that large of savings could take years. A loan can get you there faster.

• Completing multiple projects at once can help avoid never-ending renovations. Many people who try to work a project at a time find that they never seem to finish their houses. For each project finished, another awaits, and over time this can become discouraging. One possibility is to complete all your necessary projects at once, but since that will likely take a lot of upfront capital, a loan can help you afford to tackle all your projects without delays.

• Getting rentals move-in ready quickly allows more time to collect rent. If you’re looking to rent out your property, it may be a good idea to complete necessary projects before trying to find renters. Landlords can collect higher rent for properties featuring finished basements or up-to-date kitchens and bathrooms. On top of this, if you try to slowly work through projects as you can pay for them out-of-pocket it could be months or even years before the property is ready for renters, but a loan can make sure you have enough to build out improvements quickly.

Reasons Not to Consider a Loan

Conventional wisdom says you should avoid debt whenever possible, and many homeowners take this advice to heart, only making home improvements when they can afford them out-of-pocket. It’s fair that taking out a loan can be risky, and it’s important to consider challenges of loans before committing.

• It’s easy to bite off more than you can chew. Many loan types are easy to qualify for and will give you large amounts of money with even average credit scores. However, you should be cautious and always read the fine print; loans can end up being expensive to pay back, especially if they’re spread over time.

• Projects often take more time and money than planned. Most people who have renovated their homes will say the same thing — their improvements were more time-intensive and expensive than they planned for. If you do end up doing a project large enough you need a loan, you may find you quickly hit the maximum amount and are left scrambling for additional funding.


At the end of the day, it’s up to you as a homeowner to determine whether or not a loan is right for you. If you end up deciding to take one out, make sure to do plenty of research to determine the right loan type and lender for your situation. From there, you’ll be able to make improvements toward the home of your dreams.

Originally published on Realty Times.

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