How To Find A Home Improvement Loan With A Poor Credit History!

My kids were all grown up. The last had just moved out into their very first apartment and I was spending my weekends fixing up the years of abuse a family of five can leave on a forty year old home. One thing that definitely needed updating was our kitchen. After taking out student loans and spending so much money on school tuition's I was pretty much broke. Neither I or my wife had good credit, so it seemed that getting a traditional loan to help pay for some home improvement projects was a long shot. That was before I learned that there are actually lending companies who will work with people with low credit scores. The key is meeting their requirements.

• Before you apply for a bad credit home improvement loan, see if there's any way you can improve your credit score, especially if it is below 600. If you're just under 600, by raising it just over 600 you could improve your interest rate by 3%.
• One way to secure the loan is to offer some type of collateral or security. Often this is any piece of valuable property like a vehicle title.
• Many people create their own grants for home improvement by tapping into their home equity. You can use this as either a line of credit or as a lump sum amount.
• Lenders will work with people with poor credit scores if they can find someone to cosign on the agreement that has a good credit score.

Bad vs. good credit

Bad credit home improvement loans are inevitably going to have higher interest rates. The purpose of credit scores is to create a basis for lenders to understand the risk involved in offering you a loan. So people with low credit scores are considered a higher risk of not paying back the loan entirely. When you borrow money, only borrow what you need for the home improvement project. Even if they are willing to offer more money, keep the principal balance of the loan small.

Using your home equity

If you want to tap into your home equity just be aware that these loans create a second lien on your property. If you end up defaulting the home improvement lender can take over possession of your home. However, if used properly home equity is an excellent choice for home improvement projects. I ended up using some of my equity to fund the home improvement of my kitchen. I even learned along the way that home equity loans are tax deductible, and I think my next project will be some solar panels. I hear the government offers tax breaks for people who make "green" additions to their homes.

I was fortunate to get great help from the good people at www.real-estate-yogi.com. Not only did they introduce me to loan brokers who helped me choose a method to pay for home improvement, they also taught me how to find a good contractor for home improvement. Call them today for a free consultation at 1-800-987-1397.