Many people have great ideas to improve their homes, but don’t know where to begin. If you have less than perfect credit, it can be hard to obtain a loan. Especially if you want some of the more expensive projects, like remodeling or renovating your kitchen and bathroom.
In this article, we will discuss how easy it is for someone with less than perfect credit to get a home improvement loan from one of the major lenders in America. These home improvement loans for seniors discussed in this article can be considered by those with less than perfect credit or bad credit.
How to Find the Right Home Improvement Loan
Here is the low down on home improvement loans for seniors who have a history of poor credit. The borrower should compare interest rates and terms before taking up any particular product offered by lenders. This would make it easier when looking for deals online.
There are many websites offering information about current deals available in the industry right now. A person need not necessarily go directly through these portals. Instead, they could look around local stores as well, where they might get similar deals based on the company’s website.
- Competitive Rates: LightStream
- Secured Loans That Aren’t Based on Home Equity: Wells Fargo
- Small Home Improvement Projects: Marcus
- Best to Apply with a Co-Applicant: SoFi
- Considering Other Factors Besides Credit: Earnest
Why LightStream stands out: Unlike many personal loan lenders that limit loan amounts to $40,000 or less, Lightstream, an online lender offers loans up to $100,000. That makes it easy for applicants to apply for the funds they need for larger-scale home improvements.
Multiple payment options: LightStream offers repayment terms of 24 to 144 months. If you opt for a longer loan term, you’ll likely pay more interest over the life of the loan. Loan terms between 85 months and 144 months may only be available if you have a loan amount of at least $25,000.
Secured Loans That Aren’t Based on Home Equity: Wells Fargo
There are several reasons why Wells Fargo stands out. Home equity loans and second mortgages put your home up as collateral. Using your home as collateral can be risky. If you miss payments or default on your loan, then the bank can take possession of your home.
Fortunately, Wells Fargo offers a loan option that allows you to use the money in a savings account or CD as collateral instead of your home. This makes it a good option for home improvement loans for seniors. This is a secured loan. However, you will need to be a Wells Fargo customer to qualify.
High Loan Amounts At Wells Fargo
Wells Fargo offers personal loans of up to $100,000. These are unsecured loans. In addition, they offer personal loans of up to $250,000. These are secured up to the amount in your savings or investment accounts. No possibility of prequalification: Like LightStream, completing a formal loan application with Wells Fargo is necessary. You will then see the rates and terms of the loan. Once completed,there will be a rigorous credit consultation that can lower your credit score by a few points.
Length Of Loans For Wells Fargo
Wells Fargo offers loan terms of 12 months to 36 months for unsecured loans of less than $5,000. Loan terms will be 12 months to 84 months for unsecured loans of more than $5,000. Terms can be extended up to 120 months for loans secured by a CD or savings account.
Marcus for Smaller Home Improvement Projects
Another great choice for home improvement loans for seniors is Marcus. Marcus will approve loan amounts in the range from $3,500 to $40,000. This makes it a viable option for people with small home renovation projects that they want to remove from their to-do lists. You’ll likely need pretty solid credit to qualify. The lack of fees along with the option to apply for prequalification sets Marcus apart from the other lenders we chose that also offer smaller loans.
Free Promise: Marcus says he doesn’t charge you a registration fee (origination), or upfront payments, or late fees on your personal loans. But remember that if you have late payments, it can affect your credit in a negative way.
Prequalification Application: Marcus gives you the opportunity to apply for prequalification with a soft credit consultation. You can preview estimated rates and terms without impacting your credit scores. However, prequalification does not guarantee approval, and your final terms may change if you formally apply. A formal request can also result in a tough credit investigation.
On-time payment reward: If you have made 12 consecutive on-time payments, you may be able to defer a payment. If you take advantage of this feature, the term of your loan is extended by one month. Marcus will stop the accrual of interest during the deferral period. If you ever don’t make a payment or pay late, you will not receive approval for this benefit at any point during the term of your loan.
Need to Apply with a Co-Applicant? SoFi
Why SoFi stands out: SoFi allows people to apply for a personal loan with a co-applicant. If your credit needs some work, applying for it with a co-applicant who has good credit can improve your chances. A co-applicant can improve your chances of qualifying for a loan. You may even get a lower interest rate.
Two other lenders in our ranking, Wells Fargo and LightStream, also allow you to add co-applicants. But SoFi stands out from these lenders for its member advantages and prequalification option. This is another good option for home improvement loans for seniors.
Here’s What You Should Know About SoFi Personal Loans
Member Benefits: If SoFi approves you for a loan, you become a member of their community. As a member, you’ll get benefits like unemployment protection under certain conditions. You will also have access to financial planners, referral bonuses, personalized career advice, and more.
Promise without commissions: SoFi does not charge fees for late payment, prepayment, or origination of your loans. Of course, if your loan payments are delayed, that can negatively affect your credit score.
Prequalification capacity: SoFi uses a soft credit query to allow people to check their estimated rates and terms of loan. A soft query prevents your credit scores from being lowered. This is good to know before submitting a formal application. If you prequalify, keep in mind that your final approval or terms may change. A formal request involves a tough credit investigation.
Earnest Loans Qualifications
To apply, you must allow Earnest to view your checking, savings, and retirement accounts, so the company can see how much you save and spend compared to what you earn. If you have good credit, Earnest provides a nice option for home improvement loans for seniors.
Good credit is required: Earnest requires minimum credit scores of 680 to qualify for one of their personal loans. If your credit scores don’t reach that threshold, consider applying with another lender.
Loan Amounts: Earnest loan amounts range from $5,000 to $75,000, except in California, where the minimum loan amount is $10,000. That gives you flexibility on how much you can apply for a loan.
Few fees: Unlike some online lenders that charge a variety of fees on the personal loans they offer, Earnest doesn’t charge origination, prepaid, prepayment, or additional payment fees. But you may be charged a fee if your payment is returned.
Prequalification Request: If you want to check your potential rate, Earnest will use a soft credit inquiry. Again, a soff inquiry will keep your credit score the same. But remember that the terms and approval of your loan may change after you formally apply (and the application may result in a tough credit investigation).
Other Loan Options for Your Home Improvement Projects
There are various loan types that are available for projects to improve your home. For example, there are personal loans and home equity loans. Also, home equity lines of credit or (HELOC). If these choices aren’t attractive, you might also consider refinancing your home. You may even consider a credit card with low-interest and promotional terms.
Home Equity Loans and Home Equity Lines of Credit
Home Equity Loans and HELOCs provide you with the ability to receive a loan based on the value of the equity in your home. The amount may also vary depending on your income, credit, and other factors.
If you get a home equity loan or HELOC, your home becomes collateral. You can get a lower rate with this type of secured financing than with an unsecured personal loan. But you can also pay more fees. It is possible that will be asked to pay closing costs just like you did when you got the original mortgage.
If you don’t repay your loan, the lender can figure on your home to get back the money you owe. Before you get a home equity loan or HELOC, be certain that you are able to make timely payments. You risk losing your home with this type of loan if you miss multiple payments.
Personal Loans for Home Improvement
Many lenders offer personal loans that can be used to complete home improvement projects. A personal loan can be a good option. If your home doesn’t have enough equity to qualify for a home equity loan or HELOC, or if you don’t want to use your home as collateral, then think about a personal loan. It’s a good idea to compare prices and compare your financing options. Make sure your rates are reasonable before you decide to use a personal home improvement loan.