Whether you’re looking to update your bedroom, finish your basement or add long-awaited upgrades to your kitchen, you might be thinking about different ways to make changes to your home. Not only could renovations refresh your space, they may also boost the value of your home.
A personal loan could help you get the money you need as a lump sum with fixed terms and predictable monthly payments, meaning you could pay for your renovation all at once and pay back what you owe in installments each month. When looking for a personal loan in Memphis, it’s a good idea to compare offers from lenders in your area before you commit. Prequalifying could help you shop around without affecting your credit score and give you a better sense of the terms you might be offered once you apply.
If you’re weighing the pros and cons of a personal loan, here are a few other options to consider before you decide on the right next step for you.
Review your finances
Taking a close look at your budget may help you tackle your next home improvement in a few ways. First, it can give you a better sense of how much you may have to spend on your home project without borrowing money — and potentially how to save up for it. Second, if you decide to get a personal loan, your budget could help you figure out what kind of monthly payment you could reasonably afford.
To start, make a list of all your expenses over the past month. Include your utilities, car payments, grocery costs, savings and dining out. Then, subtract these expenses from your monthly take-home pay and any other sources of income. The number you’re left with can help you determine how much you could potentially spend.
If you don’t have enough to fund your home improvements on your own, use the same calculations to estimate what kind of monthly personal loan payment you could afford to take on without stretching your budget too far.
Start a house fund
Once you have a better sense of your budget, you may be able to direct some of your money toward a savings account specifically for home improvements. Being able to see your home savings grow could encourage you to work toward your goal and ensure you don’t spend the money on other items.
Set up automatic deposits from your checking account to your savings account to make it easy to save. Or see if your employer can direct-deposit a certain amount from each paycheck into a second account. If so, you could designate a portion of your paycheck to go directly to your new savings account.
Another way to grow a home improvement savings account is to put money into a high-yield savings account — your money might grow more quickly that way, since high-yield savings accounts typically offer significantly higher interest rates than traditional savings accounts. Just be aware that they often have a minimum balance requirement.
Look for extra work
Taking on additional work to supplement your income and add money to your home improvement fund may help you reach your goal more quickly. You could consider freelance or consulting work, or pick up a weekend side gig. Consider the type of temporary work that you may enjoy doing or be especially skilled at, such as graphic design, pet sitting or lawn care.
Consider a credit card
If you don’t want to take out a loan but need to make an urgent improvement to your home, you could think about using a credit card. A card with a 0% introductory or promotional annual percentage rate (APR) on purchases could be especially useful since you won’t be charged interest during the promotional period. Just ensure you have a plan to pay off the balance before the promotional period is up, or you’ll be charged the higher contract APR on the unpaid balance—and any future expenses.
Weigh which solution is best for you
Improving your home can be fun and fulfilling, especially if you’ve been waiting a while to make these changes. If you’re trying to figure out how to pay for your renovations, there are several options to consider. A personal loan could be a solution that breaks the total cost into more manageable monthly installments and gives you the ability to get the job going as soon as you get the necessary funds. A credit card could be another option to enable the work to start sooner rather than later. Postponing the project and saving up to pay for the improvements, or looking for extra work to boost your home improvement fund are possibilities, too. Just make sure to review your finances first so that you know what you might be able to afford, no matter which option you choose.
