Should I use a personal loan to re-do my kitchen?
A reader from Essex wants to remodel her kitchen, but is unsure about how to finance it.
Jo Crosse, Halifax and Bank of Scotland personal loans expert, tackles the problem.
Linda from Essex asks:
I'm thinking about re-doing our kitchen. Would a personal loan be the best option or using the mortgage? Are there any rules about loans for things to do with the home? Does it have to be on the mortgage?
Jo replies:
Both unsecured and secured loans are available for home improvements with 18% of unsecured personal loans taken in 2008, used for home improvements (Source: GFK/RFS data Oct 08).
A secured loan/further advance on your mortgage is secured against your home and although it usually offers a lower rate of interest and you can spread your repayments over the term of your mortgage, you should be aware that if you can't keep up with the repayments, you could lose your home. There is usually a charge (arrangement fee) associated with this type of borrowing.
With an unsecured personal loan, the funds are not secured against your home, and there are not normally any fees associated with this type of borrowing, but you are still responsible for keeping up the repayments. Usually, you can borrow up to £25,000 with an unsecured personal loan and choose to repay this over 1-7 years, subject to your suitability/underwriting.
If you have a question for Jo, go to the myfinances.co.uk Ask the Loans Expert section
Or for more information on your loans options go to personal loans at Halifax
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