|
Interest rates around the world are still very low and that should be good news for anyone looking to borrow money to pay for a home improvement project.
There are a number of websites out there that claim to help loan applicants find the cheapest loans and that is where many loan brokers can provide a better service than direct loan providers who just have access to their own products.
The type of loan favoured by lenders is one only available to homeowners, because it can be secured against the property and brings less risk to the lender.
So with cheaper interest rates being proposed by governments and central banks, can we see those same reductions applied to home improvement loans? There is no simple answer to that question as it depends on the circumstances of the borrower.
The main reason for the turmoil in lending circles at the moment is the plethora of loans advanced to people who were not well placed to repay them. The banks didn't know this when then advanced the money but they do now and hence billions of pounds have been written off.
|
Safer lending in future for banks
Of course the banks don't want, and can't afford, to repeat the same mistake, so at the moment we are seeng a backlash against providing any loans that carry a higher risk of non-repayment.
Banks will never stop offering loans, because that's how they make their money, but what they will do now is examine much more closely the circumstances of the borrower.
Potential borrowers can expect to answer lots more questions about their personal circumstances, how much they earn, how reliable those earnings are, what their monthly expenses are etc. Only if the borrower can prove that the loan's monthly repayments are affordable, will the lender give the go ahead.
So in the case of home improvement loans the risk levels should be a lot lower. Spending the money on the property that is being used to secure the loan is far more desirable than spending the loan on a new car or a holiday perhaps. So lower interest rates are on the cards and if you are borrowing to improve your home and can secured your loan against a suitably valued home then those lower rates could be available to you.
|
QUICK LINKS
