Did you know that a simple personal loan can add double its value to your property’s valuation should you choose to sell your home? This is a wise debt to consider as it will pay for itself one day when you put your house on the market.
While you might not be eager to add a personal loan repayment to your budget, you should consider applying for one to make improvements to your property. A few simple renovations add value to your home, allowing you to increase its selling price.
What is a personal loan?
It has never been easier to get a personal loan than it is right now. Many companies offer instant personal loans to qualifying applicants. This borrowing option requires less paperwork and features quicker approval processes. You do not need to apply for a personal loan at a bank as other lenders also offer this financial product.
As its name implies, a personal loan is granted to individuals. It is a short-term, unsecured loan. This means that such a loan is paid back over a set period of between one and seven months. What makes it unsecured is that you do not offer any collateral, such as assets or property, against the loan.
Some personal loans have variable interest rates, where installment amounts change when the interest rate is adjusted. Other loans have fixed interest rates, where the repayment remains static for the entire repayment period. Deciding between the two depends on your preference.
As much as interest rates may go down and reduce your installment, the opposite applies. If you like the idea of knowing that your repayment will not change regardless of market trends, a fixed interest rate personal is your best option.
How a personal loan can increase your property value
While there are many things, you could use a personal loan for, making it an investment in your home will yield the most significant benefits. Thousands of clients take out personal loans to pay for renovations that have made their homes more valuable when they put them up for sale.
The most lucrative renovations to consider include adding a conservatory, a kitchen or bathroom revamp, or loft conversion. You could also build an extra bedroom or create a back-garden entertainment area. Additional living space in a home is a significant value-add for any house.
Most buyers are looking for maximum space utilization in a home, whether for sleeping or entertaining. Therefore, a conservatory, which gives residents more indoor space at well-regulated temperatures, is one of the best options to consider.
In some instances, homeowners have reportedly borrowed £10,000.00 for home improvements and sold their homes for an additional £20,000.00, netting them a £10,000.00 profit on the sale.
The kitchen and bathrooms are also focal selling points of a house. A more modern, up-to-date look will make your home more appealing to potential buyers. Property experts advise that you keep your renovation choices stylish yet neutral, avoiding trends that will soon be out of fashion.
Another approach to try is converting your garage into a living space or have a flatlet built above it. This will appeal to buyers with large families or those looking to earn extra income by renting out space to tenants.
You can create a comfortable bachelor pad or one-bedroom flatlet with a kitchenette and bathroom attached with the right plans. You can use rental income to repay your personal loan so that the installments do not dip into your monthly budget.
Personal loan interest rates
Lenders offer different rates to clients, and you should shop around for the lowest one to save money on your repayments. Many private lenders offer personalized interest rates on their short-term loans. These are calculated according to your financial status and ability to repay a loan.
The longer your loan period, the more interest you will pay. Look at options that allow you to repay a loan over the shortest possible time. However, balance this against ensuring that you can afford the monthly installments.
Applying for a personal loan
The complexity of the application process depends on your preferred lending institution or company. Private lenders have streamlined their processes to keep things simple and get transactions approved speedily. Each service provider has different requirements, and it is up to a borrower to ensure that they fulfill them all.
Some examples of necessities to qualify for a personal loan include being aged 18 or older, having a personal bank account in the UK, earning at least £15,000.00 a near, and having UK residency for at least three consecutive years.
To demonstrate these criteria, you need proof of identity, income, and residence. Supplying these documents to the lending company together with the required application form should be enough to have your loan approved.