Bank won’t lend for home improvements? There are other ways to access credit, says property industry professional
Home improvement funding is hard to access, and the banks can make you jump through hoops to get a green light on borrowing.
If the bank says no, where can you go?
“A lot depends on what you need,” says Andrew Foran, head of valuations at Quillsen estate agents.
“If you want to do up a bathroom, install a new kitchen, upgrade your windows, or convert the attic, this may be an alternative and speedier route to take.”
If you need up to about €75,000 and have earnings to make the repayments, then a personal loan from Revolut or Avant is an option many of their buyers use.
Avant offers home improvement loans from €5,000 to €75,000 and claims to have the best fixed rate on loans over €30,000.
To borrow its capacity amount, €75,000 over a 10-year, 120-month term at fixed nominal interest of 6.5 per cent, will mean a monthly repayment of just over €850.
Revolut offers unsecured personal home improvement loans from €2,000 up to €30,000 with a variable annual percentage rate (APR) starting at 6.5 per cent. Its maximum repayment term is five years.
Both allow flexibility on repayments with no additional fees if you want to pay them back early.
Foran has used both over the years to upgrade his own home. But it comes with a few caveats, he says. “As long as you’re in a PAYE job and can furnish a payslip and a brief description of the works.”
Many of the larger credit union groups, HSCCU is one example, offer a large home improvement loan option, up to €100,000 on a 120-month term.
Again, if you are a PAYE worker and have no other debts, the process is relatively simple and can be done online.
In this instance, you will need to provide a builder’s quote outlining all the works that are costed to match the sum of money being borrowed.
This quote will need to be on headed paper and include VAT and company registration numbers, business address and telephone number.
The process takes about six weeks to complete, and lending rates are higher than any mortgage or mortgage top-up.
The term of the loan, often between five and ten years, is not built into a mortgage, Foran says, explaining: “While the costs may be higher, the term is shorter.”
This may lead to savings.
The amounts you can borrow won’t allow for a complete renovation, but it will allow you to explore upgrading the fabric of the property and possibly improving its Ber-rating, which will improve the creature comforts of living there.
