Home improvement projects can be expensive, especially if you’re hiring a contractor. For some homeowners, it may not be possible to get the work done unless they can finance it with a loan. Some contractors offer their own financing, while others partner with third-party providers. In either case, you’ll want to vet the contractor as well as the lending company, advises a certified financial planner at Complete View Financial in San Antonio. Ask for references from past clients who used the contractor’s financing, and call the lender to see what its terms and conditions are. Also, check with your state’s office of consumer affairs and the Better Business Bureau for complaints against the lender.
One downside to borrowing through a contractor is that it can be difficult to shop around, says a certified financial planner at Green View Financial in San Diego. You’ll have to wait until after the contractor gives you an estimate before you can prequalify for a loan or shop with other lenders. That’s why it pays to start with a clear idea of what you want to do, and get multiple estimates before proceeding. If you have good credit, a disciplined spending plan, and a smaller project in mind, you can probably find less costly options than a contractor-backed loan, such as an unsecured personal loan from a bank or an online provider like GreenSky. You can also try isolating project costs on a credit card with a zero percent introductory rate, though that requires discipline to pay off the balance before the interest starts accruing.