Home improvement contractor financing is a type of loan that allows you to finance part of your home renovation project with affordable monthly payments. It can be used for a variety of projects, from replacing the roof to installing new appliances. Some contractors offer their own financing programs, while others partner with lenders to offer loans specifically for home improvements. Before you apply, be sure to understand the rates and terms. You should also compare the cost of home improvement contractor financing to other options, such as a personal loan or even cash savings.
Before choosing a lender for home improvement contractor financing, make sure the company is licensed and registered with your state’s regulatory agency. Also, check the lender’s reputation with your local Better Business Bureau or consumer review websites. Lastly, consider the lender’s borrower requirements, such as minimum credit score and income requirements. Once you’re approved, the funds will be disbursed either directly to you or directly to the contractor handling your project.
To help you determine how much you need to borrow, get a cost estimate for the renovation from a professional contractor. You can find costs for projects on websites like HomeAdvisor, but be sure to compare estimates from several different contractors and suppliers. It’s also a good idea to use a budgeting app or spreadsheet to determine how much you can save each month toward the renovation costs. You can also try using a credit card with a zero percent introductory rate to pay for the project, but be careful not to deplete your emergency savings or delay other financial goals in order to fund the renovations.