Kitchen island to entertain your next dinner party? Hardwood floors to make your family room cozier? Waterfall shower for your bathroom? You want to turn your house into the home of your dreams — you just need the money to make it happen.
Cue Marcus by Goldman Sachs home improvement loans.
A home improvement loan is an unsecured loan that you can use for home improvements, repairs, remodels and renovations. What we mean by an unsecured loan is simply that you’re borrowing money based on your creditworthiness versus putting up your home or other assets as collateral.
A home improvement loan could be especially helpful for new homeowners who haven’t built much equity but want or need to make renovations to their home.
Want a deck that makes the neighbors jealous? A home improvement loan could help you build one.
There are many ways a home improvement loan can be used in your quest to spruce up, fix, beautify or update your home. Some of these include, but are certainly not limited to:
Remodeling a bathroom
Upgrading or remodeling your kitchen with new flooring, appliances or countertops
Adding a pool or hot tub
Installing a security system
Repairing or replacing your roof
Installing new windows
Adding a basement recreation room
Adding a home office
A home improvement loan from Marcus can help you take the steps you’ve been wanting to take to make your house feel a little more like, well, home.
The rates on Marcus loans range from 6.99% to 24.99% APR. The rate you qualify for and your loan term will depend on your creditworthiness and ability to pay. Only the most creditworthy applicants qualify for the lowest rates and longest terms. Rates will generally be higher for longer term loans.
Qualified borrowers can get a Marcus loan ranging from $3,500 to $40,000 to finance their home improvement project, with no collateral or home appraisal required.
Applying is easy and straightforward: You can see your fixed-rate loan offers in as few as five minutes, with no impact to your credit score for applying.
And, if you need the money to start your project quickly (say you need to fix a major roof leak), you could receive your funds within five days.
No sign-up fees. No late fees (you only pay interest for the additional days). No prepayment fees. No appraisal fees. No closing fees. And, best of all, no surprise fees.
Your interest rate is fixed, so you won’t have to worry about changing rates or fluctuating monthly payment amounts.
No lengthy application process (other options may have approval processes that can take 2 to 6 weeks). No home appraisal required. Get your loan funds quickly to start your home improvement project.
Marcus home improvement loans are available from $3,500 to $40,000 with terms from 3 to 6 years.
No need to worry about putting your home up as collateral, which is required for a home equity line of credit (HELOC). No putting your home at risk. No hassles.
It’s your money, and you control how you use it. For instance, if you’re remodeling both your bathroom and your kitchen, you borrow funds once and have the flexibility to use one contractor for your kitchen and another for your bathroom.
Once approved, you’ll receive your money in a lump sum. Then, you can use the funds you receive to finance your home project, whatever that may be.
You’ll then repay the loan with interest in fixed monthly installments over your loan term. It’s as simple as that.
When renovating your home, there are specific things you can do to increase its value, possibly making your home easier to sell at a higher price in the future.
One thing to consider when updating your home is how long you plan to live there. If you’re planning on having it be your “forever home,” you may want to consider projects that will have a lasting impact on your quality of life and home value. Replacing the carpet with hardwood floors will boost the value of your home for years to come, but a sauna may not.
If you’re only going to stay there for a few years, you could put in more current additions, such as granite countertops, which may boost the value of your home in the short term.
Whatever you decide, you’ll probably want to figure out the return on investment. Here are a few things you could do to increase the value of your home when renovating:
The first thing people see when they come into your home is the exterior. Curb appeal is a huge part of owning a home, and it’s even bigger when you’re trying to sell. When you’re renovating, consider giving your home a wooden deck. It could add a lot of value to your home.
Kitchens are often seen as the heart of the home. Updating the appliances, countertops and cabinets could improve the overall look and value of your home.
Surprisingly, sometimes the smallest things in your home could have the biggest impact. If you’re only taking on a few major changes in your home renovation project, don’t neglect details such as doorknobs, moldings, interior doors and cabinet or drawer handles.
Home improvement loans aren’t the only way to finance renovations. There are other options as well, which come with pros and cons.
Sometimes referred to as a second mortgage, a home equity loan lets you borrow against the equity in your home. You borrow a lump sum, to be repaid with interest in regular installments over a fixed period of time. If your home equity loan is not repaid, your lender may be able to take possession of and sell your home. A home appraisal is typically required, and the approval process could take two to six weeks.
Like a home equity loan, a HELOC lets you borrow against the equity in your home. You receive a credit line, which you can draw against up to a specified credit limit, similar to a credit card. If the line of credit is not repaid, the lender may be able to repossess your home and sell it in order for the loan to be made whole. A home appraisal is usually required, and the approval process can take weeks.
Credit cards provide an unsecured line of credit from which you can draw up to your credit limit. When you use your credit card to make a purchase, the amount of credit available to you decreases. Once you make a payment against the outstanding balance, your available credit will increase proportionately. A home improvement loan with a low interest rate could save you money over high-interest credit cards.
Let’s compare the cost of a $15,000 kitchen remodel paid for with a credit card versus a Marcus home improvement loan. Assuming you make the same monthly payments on each, it would cost you $2,305.54 more to use a credit card with a 16.99% APR (paid on-time over 54 months) than it would to use a Marcus home improvement loan with a 12.99% APR (paid on-time over 48 months). Learn more with our Marcus personal loan calculator.
Some contractors will offer their own home improvement financing. Unfortunately, this type of financing can only be used with the sole contractor providing the funds; it can’t be used for additional, outside expenses incurred. With a home improvement loan, the money goes directly to you. You decide how and where to spend it, even if it’s across multiple merchants.
Obviously, home improvement loans are not the only option when it comes to financing your home renovation project. But, it could be the right option for you.
One of the major ways a personal loan could be a better option is that you don’t have to borrow against your home to finance its renovation. With a HELOC and home equity loan, you have to borrow against the value of your home, using your home as collateral.
Additionally, personal loans from Marcus could have lower interest rates than those on your credit cards, meaning you could actually save money once your project is through and you’ve paid back what you owe. Plus, with a Marcus personal loan, you’ll know exactly how much you owe and when you’ll be debt free.
Sounds pretty great, right?
This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.