Renovation Loans

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What is a renovation loan?

Renovation loans, or home improvement loans, are a type of personal loan. The loan is for making repairs or alterations to your home or property.

Is a renovation loan secured or unsecured?

Loans for renovation loans are typically unsecured but there are some secured home improvement loans. If you opt for a secured loan for your home renovations the home equity is generally what is used as collateral.

Most lenders only offer unsecured loans, but Oceania Finance also has access to lenders offering secured renovation loans.

Are renovation loans a good idea?

This will depend on your circumstances and how much you want to borrow.

If you are unsure, it’s good to get expert advice. A loan is a big investment and you want to make an informed decision before you move forward. An experienced loan broker can assess your financial situation and needs and advise on the best finance option for you.

What credit score is needed for a renovation loan?

Generally, you’ll want to have at least a ‘good’ credit score of 600 and above*. Having a score below this will limit your borrowing options. If you apply directly through a lender, you’ll need to do your research to make sure you meet their credit eligibility criteria before you apply.

The benefit of a broker is that they can find you a loan to suit your credit rating. So, even if you don’t have the best credit score they may still be able to help you finance your home renovations.

Keep in mind that lower credit ratings usually come with higher interest rates due to the higher risk to the lender.

*As different countries have different criteria for lending, your credit score could vary from country to country. In Australia, the two main credit reporting agencies are Experian and Equifax – through which you can also check your credit score.

How home renovation loans work

Like other types of personal loans, renovation loans funds are sent straight into your bank account once the loan agreement is signed. The loan is then paid off over a period of time, usually between one and seven years. You will also need to pay the extra fees and interest associated with the loan. The exact loan terms will depend on the lender you use and whether you use a broker to negotiate the loan terms.

Loans for renovations are generally unsecured debt, which means the interest tends to be higher than other finance options for home renovation. However, because the loan term is shorter than other finance options, you may still find that you end up paying less interest overall.

Can I get a renovation loan?

If you’re wondering if you’re eligible for a renovation loan, talk to our experts today. As trusted loan brokers, Oceania Finance can verify your suitability for home improvement finance, so you don’t need to worry about checking and comparing loan eligibility requirements.

If you apply for a loan directly from a lender, ensure you check any specific requirements before you submit your application. If you can’t get a loan from them based on the advertised criteria, do not apply, as getting rejected will impact your credit rating.

What do I need for a personal renovation loan?

Specific eligibility criteria will depend on which lender you apply for a loan with but at a minimum, you can expect the following:

• Be 18 years old or over
• Be a permanent Australian resident or hold a valid visa
• Have not filed for bankruptcy
• Have a regular income and demonstrate financial stability

Where to get renovation finance

There are many lender options available in Australia to finance your home reno. Banks and personal lenders offer a wide range of finance solutions. There are several factors to consider before you decide on where to go for a loan.

How to choose the best home renovation loan

The best loan for you will be one that suits your individual circumstances and needs. Here’s what to look for to get the best renovation loan for you:

You can use comparison websites if you’re unsure or overwhelmed by the number of finance choices available. But be aware that these websites often have sponsored or promoted businesses at the top. They also do not compare every option available. Check this government source for guidance using comparison sites.

Alternatively, you could use the services of a personal loan broker to help eliminate confusion. Not only can they quickly eliminate unsuitable options but they have expertise in negotiating for better or more desirable terms.

Other ways to finance your home renovations

There are a number of other ways you can finance your renovation, including:

• A credit card. Important to note that the interest rate will be higher than if you were to take out a personal loan.
• Home equity loan. You can get a home equity loan if you already have a mortgage (home loan) and you’ve built up equity on the value of your property.
• Refinance your home loan. If you already have a home loan, you may be eligible to refinance it and get more funds for renovations.
• Construction loan. This type of home finance provides the funds in increments instead of as a lump sum at the start.

Looking for another type of personal loan?

Oceania Finance is here to help. We are trusted to secure a number of different personal loan options for our customers:

• Wedding loans
• Medical loans
• Holiday loans
• Dental loans