Difference between Home Improvement Loan and Home Extension Loan

We all love living in a good home and on timely basis we keep on doing home improvements in our homes as it adds substantial value to our living style. Home improvement could include remodelling, painting, internal and external repairs, and even bigger construction work such as adding a floor or a washroom. It is an expensive thing but then there are several financing options available for home improvements.

Home Improvement loan is available at an interest rate range of 10.5-11.5%. Further, home improvement loans can be availed of typically for a tenure of 15 years.

A true home improvement loan is based on the appraised value of the renovations you plan to carry out. When you apply for an actual home improvement loan, the lender requires you to obtain bids from the contractor you plan to hire for your project. The lender will then appraise the bid to make sure it reflects a reasonable price and proper quality of work. After checking the bid and your credit, the lender will offer you a loan to cover the price of the work. The lender will inspect the work periodically before releasing payment to the contractor.