Heard of home improvement loans but have questions about how they work? You’re not alone. Many homeowners’ necessary projects or dream repairs are deemed impossible after hearing the total price of a project; this is where home improvement loans come into the picture. Loans essentially allow a project to be funded up-front by a third-party lender while allowing the customer to pay off the project in affordable monthly payments. Loans significantly benefit both the homeowner and the contractors who offer them. Whether it’s for an emergency repair after a storm or an aesthetic renovation improving the style of a home, home improvement loans are popular, manageable, and accommodating to a wide range of consumers.
What is a Home Improvement Loan?
Simply put, a home improvement loan is a type of monetary loan used to fund any type of home upgrade. To provide an example, think of a homeowner who was recently impacted by a damaging storm and is now in need of a major roof repair. Given the current economic state and their lack of savings due to other unexpected expenses, they are looking for a roofing contractor who can offer a payment plan that aligns with their budget. Compared to credit cards and lines of credit, home improvement loans can often offer lower interest rates and more predictable payments. Home improvement loans also allow homeowners to borrow a larger amount for a longer repayment period, helping them manage the financial burden of a home improvement project.
The Benefits of Home Improvement Loans to Homeowners & Contractors
An article from iPropertyManagement explains the homeowner’s desire behind many home improvement projects: “American homeowners place a high value on making their homes more beautiful and functional. Self-expression and individuality are increasingly reflected in our physical environments, and cookie-cutter homes are very much out of style.” Along with finding more comfort in their physical environments, loans can allow a homeowner to complete projects that overall increase their home’s financial value. At the end of the day, homeowners want to feel that they have more control over their finances and debt, which is one of the best things a home improvement loan can provide.
Contractors reap just as many benefits by choosing to offer financing. By showing the homeowner the affordability of their desired project, they will be less likely to experience sticker shock, resulting in more closed deals. Although not all finance companies operate this way, offering financing through Watercress allowscontractors to get paid directly in full after project completion, relieving the stress of waiting on customer payments.Having the ability to discuss a home improvement loan within the quote discussion can make the customer feel more comfortable, relaxed, and in the end – satisfied with the finished work on their home. Read our recent blog for more reasons contractors offer home improvement financing.
Types of Home Improvement Loans
There are various types of home improvement loans that can be offered to homeowners in different financial situations with varying credit scores and histories. Home improvement loans can vary in their annual percentage rates, terms, and promotional periods depending on the financial lender. Outside of the standard loan product, there are other loan options that may have a promotional period with no interest and no payments. Other products may not even require the homeowner to pay any interest if the payments are made in full and on time. Contractors can benefit too, as there are even products offering a 0% contractor cost.
Grow & Thrive with Home Improvement Loans
Overall, home improvement loans give contractors the power to increase their sales and acquire more customers seeking improvement in their homes without compromising their financial comfort. A home remodeling statistic written by Alexis Curls from NewsCenter 1 states that, “93% of homeowners felt they had a better quality of life after finishing their renovations.” Home improvement loans simultaneously allow contractors to grow and thrive in their businesses while empowering homeowners in their home improvement endeavors. If you’re in the home improvement industry and interested in offering financing, Watercress could be the partner for you. Click here to connect further – we would be more than happy to talk with you and learn more about your business.