If you have a good credit score and desperately need some money to get your home repair job done, you can use it for the beneficial purpose and take home improvement loan. There are several home improvement loans available for good credit and most common of them all is personal loans along with credit cards and home equity line of credit. All have their benefits and drawbacks, but with some careful management you can stay free from the debt trap as well as get your home renovated as well. While a personal loan and credit card are unsecured loans wherein you do not have to put in any asset as collateral security, for the others, you have the security of your home.
Your Credit Score Matters
Your credit score is a very important tool which plays a major role in your personal loan eligibility. It is your credit worthiness that is considered for giving personal loans as no asset is required to put in as collateral. On your credit score, the rate of interest that would be charged for your personal loan would depend. Personal loans are given at fixed rates which are very helpful for you to plan and arrange your monthly payment schedule according to a strategic budget. But remember that the payback period of personal loans are very short as compared to other traditional ones and usually ranges from two to maximum of five years.
The Rate Of Interest
The rate of interest is also high for personal loans when compared to other secured loans as there is no collateral security involved, just like the credit card loans. Any credit card usage would fetch you an interest rate not less than eighteen percent which would be charged after the free period which is usually given to any credit card user for ninety days. If you can arrange money and pay it back in full within this ninety days period, then you can save yourself falling into the debt trap. You can click here to know about the ill effects of non-payment of credit card bills.
Good Credit Loans
Before you avail the good credit loans for home improvement, you should consider calculating the monthly payments you would have to make so that you know what you would get into after taking such loan. There are several tools and software available on the internet which would enable you to calculate it along with the average rates of interest so that you can plan for the future payments and arrangements of money.
Requirements For Good Credit Loans
It is always better to avail a secured loan rather than unsecured loan irrespective of the common belief that you may lose your home due to non-payment. As the name good credit signifies, you should have a credit score of higher than six hundred to avail such a loan and also consider some key factors for the eligibility of such loans. Depending on the lender and the laws of the state the requirements may vary, but the basic requirement of a healthy credit score and a good credit history is very important and remains the same throughout.