How to Get a Home Improvement Loan without Equity
If your home needs repairs or improvements, you may be considering borrowing to help cover the cost. Projects can range from a few hundred pounds for minor work to £50,000 or more for larger renovations.
There are several ways to finance home improvements, and the most suitable option will depend on your individual circumstances, including affordability and eligibility.
Types of home improvement loans explained
There are two main types of borrowing used for home improvements: secured and unsecured loans.
Secured home improvement loans
- Secured against your home
- Usually require available equity
- Often repaid over a longer term
In some cases, interest rates may be lower than unsecured borrowing, although this will depend on your circumstances. It’s important to be aware that your home may be at risk if you do not keep up with repayments.
Unsecured home improvement loans
- Not secured against your home
- Do not require equity
- Typically for smaller amounts and shorter repayment terms
Because these loans are not secured, interest rates may be higher.
We recommend that you seek independent financial advice before making any decisions about borrowing.
What is home equity?
Simply put, your equity represents the amount of your home that you actually own. This can be calculated by subtracting how much you owe on your mortgage from the property’s current market value.
For example, if your home is worth £250,000 and your mortgage is currently £150,000, you would have £100,000 ‘equity’ in your property.
How do I get equity in my home?
Equity may increase over time in two main ways:
- Paying down your mortgage – through regular repayments or overpayments where this is affordable
- Increasing your property value – through improvements or changes in the housing market
If you are considering overpayments, it’s important to check whether this is suitable for your circumstances and whether any charges apply.
Can you get a home improvement loan without equity?
If you do not have equity in your home, secured borrowing options may be limited.
In this situation, some people consider unsecured borrowing, depending on affordability and repayment terms. For larger project, secured lending may be an option where sufficient equity becomes available.
Lenders will assess your individual circumstances, including affordability and credit history, before making any offer.
Home Improvement Loans from Lendology
Lendology works with local councils to provide home improvement loans to eligible homeowners.
- Interest rates will depend on your circumstances and eligibility
- Eligibility criteria are set by your local council
- Loans may be used for repairs, adaptations, and energy efficiency improvements
If you’re exploring your options, you can find out whether a Lendology Home Improvement Loan may be suitable for your circumstances.
Representative Example (4% fixed interest rate, Representative 4.2% APR)
Loans are subject to status and are typically protected by a Title Restriction. Borrow £10,000 over 120 months, £101.24 monthly repayments. Total amount repayable = £12,148.80, including a £20 fee for registering the Title Restriction against your property at the Land Registry. The £20.00 fee is only payable if a loan is agreed by Lendology and you decide to proceed with a loan. We do not charge interest on the fee.
A Title Restriction means that you may not be able to sell your home without our permission unless the loan is fully repaid.
Missing payments could affect your credit rating and ability to obtain credit in the future.
This is a financial promotion approved by Lendology CIC.
Loans are subject to status and are typically protected by a Title Restriction. Missing payments could affect your credit rating and ability to obtain credit in the future.
