More UK consumers funding home improvements with unsecured loans
According to a new survey carried out by Moneyexpert, more and more people in the UK are spending money on home improvements, with many of these consumers obtaining the cash that they need to carry out the works in the form of an unsecured loan. The report indicates that a rising number of households are financing their home improvement projects by taking out unsecured finance rather than with a homeowner loan or savings.
Data from the reports suggests that on average homeowners in the UK have spent around one and a half thousand pounds each on hiring professionals to carry out home improvements on their properties. Experts from Moneyexpert have warned, however, that consumers should be careful that they are not paying way over the odds to have their home improvements carried out simply because of the variations in interest rates amongst unsecured lenders. In some cases consumers could end up paying around twenty five percent of the amount borrowed in interest.
Those thinking of taking out a loan in order to finance their home improvements should look at all of the options, such as whether a homeowner loan could prove more cost effective, as this is secured against the home and is available over a longer period and with low interest rates, helping to keep down the costs when it comes to making the monthly repayments on the loan. Even the interest rates on unsecured finance can vary quite dramatically, so those looking to take out a secured loan should take the time to compare different deals and find one that offers the best value for money.
The Chief Executive of Moneyexpert stated: "Personal loans can vary in price dramatically – you could end up paying back as much as a quarter of the amount you borrowed in extra repayments unless you research the market carefully."
4th December 2006