A New Look At Home Improvement Loans
The recent phenomenon of upside down home loans means that, through no fault of their own, many homeowners have little to no equity in their homes and therefore can’t take out a home improvement loan for needed repairs or updates, but there is a new solution.
That solution is peer to peer loans. This is a unique loan program that consists of an online community of borrowers and lenders who bid and offer for funds to borrow and money to loan. Eliminating commercial lenders in the process makes for a system that improves the return for lenders and lowers the price for borrowers.
And, peer to peer loans are personal loans, so collateral is not required, and therefore the value of your house is not part of the loan consideration. This gives homeowners a new way to obtain a home improvement loan for needed or even just desired changes, such as additions, renovations and other improvements.
Home improvements are a great investment, since the value of your home will increase if you have an updated kitchen or an additional bathroom, and you can enjoy these benefits even before you sell your home. Some home improvements, however, even pay for themselves long before the home is sold and the higher value can be realized: new energy saving devices such as furnaces and hot water heaters, better insulated windows, solar panels and other energy saving solutions all save money as soon as they are installed. The cost of energy today is a major burden on most homeowners, so saving thousands of dollars a year in energy costs is a a welcome relief.
Nothing could be simpler than applying for a peer to peer loan. The sites that exist to administer peer to peer loans make the process as simple as possible for both the borrower and the lender. A borrower merely needs to A) Set up his loan listing B) List the listing on the site C) Wait for lenders to bid on his loan. Business is still business, so your credit rating will still have an impact on your loan rate, but lenders are able to accept lower rates since there is no bank in the middle taking a piece of the profit.
Some lenders prefer small loans of about $1,000 or so, while there are many investors who are putting larger sums in their loan portfolio, but the average range is up to about $15,000. This is just perfect for home improvement loans, which usually run a range from about $1,000 for a new shower or bathtub, to about $15,000 for a kitchen remodeling.
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