The rising costs of renovation (and how to pay for them)
From petrol to the price of lettuce, the costs of just about everything has been going up recently. And the costs for renovating your home are no different. While you can plan for some price variation, it’s hard to know exactly what the future will bring. So what do you do when costs go up in a way you hadn’t expected? Let’s take a look at how you can finance your renovations when you get caught short.
Use your credit card
Your credit card might be the first thing you think of if you’ve suddenly got a bill to pay but you don’t have access to the funds to pay for it. It’s there, it’s quick, so why not? While your credit card might be an easy way to pay for small things like appliances, using it for substantial costs can be risky. Credit cards may come with much higher interest rates than other types of finance, making the money you borrow much more expensive. And if you know you won’t be able to pay it off any time soon, that debt can quickly spiral.
Tapping into your emergency funds
If you’re the type to put away money ‘just in case’, you might have a nice little emergency savings fund you could access. Just remember to consider what you have put this money aside for before you decide to access it. This might be exactly the type of thing you’ve been saving this money for. But if you’ve been putting money into an emergency fund to pay for things like health costs, then accessing this money now might have a big impact on your future needs.
Getting an advance on your pay
When you access a pay advance from your employer, you can borrow money before your next pay cycle, which is then automatically repaid on your next pay day. This is an easy way to access money immediately, but it’s usually limited to a percentage of your pay. You usually won’t have to pay interest but may have to pay a fee.
Borrowing from family or friends
Sometimes borrowing from family and friends might seem quicker and easier than borrowing through a bank or other financial institution. But it doesn’t come without its own risks. Just asking can put your loved ones in an awkward situation and a disagreement about money can quickly ruin a relationship. It’s important that every element of the loan is agreed upon – from the amount to the loan repayment timeline (as well as any interest) – and that it’s all in writing.
Using your home loan
You can use your home loan to pay for unexpected renovation costs in several ways. You may be able to tap into the equity in your home, access a redraw facility if it’s available on your loan, or refinance your home. Depending on which path you choose, the process may take a while and there may be a lot of paperwork.
Applying for a personal loan
You can also simply apply for a personal loan. Personal loans are available for many different kinds of personal expenses, such as to pay for a car, holiday or renovation. There may be a limit on how much you can borrow, and you’re usually required to repay a personal loan in between one and seven years.
Getting a renovation loan
A renovation loan is a special type of personal loan specifically designed for financing renovations. That means it’s tailored to the unique needs of a renovation process. Just like any other loan, they can be secured or unsecured with fixed or variable interest. However the repayment period is typically much shorter than a home loan, meaning you can pay it off sooner.
RenoNow specialise in renovation loans tailored to suit most kinds of home renovations. The application process is straightforward and simple, doesn’t require reams of paperwork and you can get an outcome in under an hour^.
Looking for finance to help you cover the rising costs of your renovation? We’re here to help. Applying for a RenoNow renovation loan is simple and easy. Get in touch today.