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Here are ways to Pay for Home Improvement

# Utilizing your investment funds

The fortunate thing about utilizing your reserve funds for home enhancements, instead of for occasions or another auto for instance, is that – and also making your surroundings a more pleasant place – you are making a speculation. The right enhancements can build the estimation of your home exponentially. Case in point, a cutting edge lavatory could add as much as 3% to its sticker price, while an OK new kitchen could include 5%, as per assessments.

On the off chance that you have money to hand, utilizing it to finance your home changes could be the most sensible choice – particularly with investment funds rates so low. Be that as it may, if your cash is tied up in an altered rate security for instance, it may not be worth paying the related punishment to get the money out – on the off chance that you can get it out by any stretch of the imagination. Keep in mind additionally, that on the off chance that you pull back assets from a money ISA, you won’t have the capacity to beat up your recompense again inside the same assessment year.

The main downside to paying directly with cash, however, is that you will not be protected should anything go wrong, such as the company carrying out the work going bust or even turning out to be fraudsters. So, even if it’s just the deposit, putting the cost on a credit card and then using your cash to pay it off is a good idea, as I go on to explain.

# Putting it on a 0% purchase credit card

If you use a credit card to pay for your refurb and the work turns out be faulty or even never gets completed because the company goes bust for example, you’ll be able to claim the money back from your card provider.

This is the case even if you only pay for the deposit on your card –so long as the total bill comes to between £100 and £60,260, you’ll be covered under the terms of either the Consumer Credit Act 1974 or the more recent Consumer Credit Directive. Once you’ve used your card, this protection is locked in place.

If you’ve not got the money squirrelled away in savings to clear the balance with, you should get a card that charges an introductory 0% on purchases. This will enable you to clear the cost (preferably by monthly direct debit) during this interest-free period.

Santander’s Credit Card for Purchases and Tesco’s Clubcard Credit Card for Purchasescurrently come with the longest interest-free period on new purchases, both offering 18 months at 0% before jumping to a representative APRs of 18.9% (variable).

If you regularly shop at Tesco, the Clubcard credit card could be the deal to go for, as it enables you to rack up the Clubcard points faster. You get one point for every pound you spend in Tesco and one point for every four pounds you spend elsewhere.

However, if you are planning on clearing your debt, sooner, why not throw in some cashback instead…?

#Interest-free purchases with cashback

The American Express Platinum Purchase Cashback card for example, offers 16 months at 0% interest as well as 1.25% cashback on all purchases – meaning you not only get to spread the cost of your home improvements without paying interest, you actually get money back on them.

Once this 16-month honeymoon period is up, you’ll be paying an APR of 18.7% (variable) once the card’s £25 annual fee is factored in.

Alternatively, if you bank with Nationwide, the Select Card offers 15 months at 0% on new purchases and 0.5% cashback. You will then be charged a representative APR of 15.9% (variable).

However, if your credit card limit won’t stretch to the cost of your home improvements, unsecured personal loans are also offering great value at the moment with rates at their lowest ever.

# Personal loans

If you’re planning major improvements such as converting the loft or adding a conservatory then you can easily be looking at spending upwards of £10,000 – in which case a personal loan could be the way to fund it.

Sainsbury’s Bank, which took the gong for best loan provider , has just lowered the APR on its standard personal loan to a market-leading and all-time low of 4.4% APR. This rate applies to borrowing of between £7,500 and £15,000 and you can choose a repayment term of between one and three years. If you need longer to repay, Sainsbury’s has also reduced its rate on the same-size borrowing to an APR of 4.5% against a four or five year repayment term.

Santander offers a slightly higher rate of 4.5% on the same levels of borrowing to everyone – but goes further for existing customers, by extending the same loan to £20,000 instead. If your improvement project is a particularly big one, it could even be worth making the switch to its 123 account before you apply.

Then there’s one final option – letting your home raise the money for its own improvements…

#Using your home

If you’re planning on building an extension then it might be worth approaching your mortgage lender to see if you can free up some cash with a further advance. However, borrowing extra against the value of your property is not a decision to be taken lightly. The additional funds may not be offered at the same rate as the rest of your mortgage for example, and could even tie you in for a certain period. If this doesn’t tally with any tie-ins on your main mortgage, things can get tricky when it comes to renewing your deal.

If however, your current mortgage deal is coming to an end, you could move the whole loan – plus the extra required for the work – to one lower rate. For instance, the West Brom Building Society is offering a market-leading fixed rate of just 1.48% for two years before jumping to 3.99%.

Final tip! Once the work is done, make sure you notify your insurer to make sure your home insurance is completely up to date – failure to do so could invalidate your policy.