Home improvements may require a loan for certain projects. If you plan to remodel a recreation room, a kitchen or a bathroom, you can speak with a banker about a variety of loan options. Generally, a homeowner applies for a secondary loan to borrow money. Major improvements are often financed with a home equity loan or a line of credit. An unsecured loan may provide the money you need toward projects, too.    

Step 1 : Your Credit Rating

View your consumer credit rating online. Verify that each creditor is paid up-to-date before seeking money for improvements. Make payments to satisfy accounts that reflect a past-due status. Use online credit reporting tools to dispute erroneous information within your credit profile. For instance, if a credit card shows activity for an account that doesn’t belong to you, a dispute form should be filed online. Credit bureau investigators will follow up with you after checking the validity of the debt. A loan for home improvement projects will require a favorable credit history.

Step 2: Written Estimates

Contact several home improvement contractors to discuss the projects that you want completed. Request written estimates from each contractor for comparison purposes. Review the material and labor estimates to determine the most favorable costs for your home improvement project.   

Step 3: Liability & Insurance

Inquire about a home improvement contractor’s experience. A knowledgeable contractor should be able to provide details about completed home improvement projects. Ask for references, proof of licensing and liability insurance to ensure that a contractor is in good standing.      

Step 4: Type of Project

Call a variety of lenders to inquire about home improvement loans. The scope of certain projects could determine whether a secured loan or an unsecured line of credit may fit your financing needs. For example, an unsecured loan might be available for qualified applicants who want to borrow money for new carpeting, flooring or a deck. Larger improvements, such as the addition of a sunroom or a kitchen-remodeling project may require a secured loan.

Step 5: Application Process

Submit a loan application for money toward your improvement project. Provide the lender with the projected estimates from the contractor you’ve selected.

Step 6: Documentation

Send required loan documentation to your lending representative. Information about your finances, such as your yearly earnings and the name of your employer will be requested during your application for a home improvement loan.

Step 7: Communication

Communicate with your lender to finalize the acceptance of the loan, and to receive the money for your home improvement project.