Home ownership can be expensive. You’re already dealing with expenses like mortgage payments, utilities, water bills, lawn care, and the rising cost of natural gas and heating oil. Many homeowners hope that home repairs won’t be necessary on top of all that. But if you find yourself in a situation where you have to cover a home repair expense, there are many ways to get the funding you need. Let’s dive deeper into how HELOCs, installment loans, and title loans work so you can figure out how to finance your home repair:
Home equity line of credit (HELOC)
HELOCs are loans taken out against the equity you’ve built in your home. These flexible loans can be great for major repairs, like fixing your roof or basement after a weather. HELOCs can be a useful option if you’re not sure how much money you’ll need for the repair. Take what you need to cover the cost of the labor and materials. You’re not obligated to take more than that, but there is more available if you need it.
Unsecured personal installment loan
An installment loan is an unsecured personal loan that lets you borrow a lump sum of money all at once. Then, you’ll repay the amount you owe over time in fixed monthly payments, or installments. Unlike with HELOCs, you’re not required to put up any collateral, so the equity in your house remains in your control.
Installment loans are offered by traditional banks, credit unions, and online lenders. Shop around to find the terms and conditions that meet your needs. If you have poor credit, not to worry. Many lenders have more relaxed credit requirements and will offer loan options to borrowers with all types of credit scores.
Title loans are secured loans that let you use your car as collateral to receive funding. With these loans, the lender will appraise your vehicle and offer you a percentage of its value. If approved, you can receive the cash you need as soon as the same day you apply. The lender will hold onto your car title, and you can keep driving your car as you repay the loan.
Since title loans are secured, you don’t need good credit to get approved. So, borrowers with all credit scores may qualify. Title loans are usually short-term, so this option can be good for smaller jobs, like appliance repairs or repaving the driveway. But keep in mind that the lender can repossess your car if you don’t pay back the loan, so make sure you have a good repayment plan in place before applying.
The bottom line
If you need fast cash to cover your home repair, there are plenty of options available. From HELOCs and installment loans to title loans, homeowners can easily find a loan to fix their house quickly. Each loan option and home repair are different, so understanding your financing options and needs can help you choose the right loan for the job.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.