If you’re thinking about undertaking an extensive home renovation project, you may be wondering whether you should finance it or dip into your savings to pay cash. While using cash may seem like a smart move because you won’t have to think about making payments toward your loan, a home improvement loan can actually often be a wiser choice in the long run. Learn why in today’s blog, below.
3 Reasons Why a Home Improvement Loan Is a Smarter Way to Pay Than Cash
Keep your savings where they are
If you choose to pay cash for your project, you will have to dip into your savings and withdraw a large sum. That is money that will no longer be earning interest in your account and in the case of an emergency, there’s no way to get that money back from your contractor once you have paid. While many homeowners are concerned about paying interest on a home improvement loan, by letting your savings accrue interest in a bank account you will often be able to offset the long-term cost of your loan.
Have cash on hand for emergencies
By depleting your cash reserves to pay for a home improvement project, you’ll no longer have a nest egg to fall back on in the case of an emergency. A home improvement loan allows you to spread your payments out over a long period of time and ensures that your monthly payment is manageable while leaving you with funds in the bank for other emergencies if and when they arise.
Taking out a home improvement loan is a great way to raise your credit score. Making timely payments toward a loan is one of the most efficient ways to boost your credit score whereas paying cash has no effect on your score.
Pay Off Your Bills and Remodel Your Home
Are you dreaming of upgrading your home but don’t know how you’ll pay for it? With a loan from Your Project Loan, you can pay off your bills and tackle projects at the same time! It has never been easier to take on your debt and home improvement projects with just one loan. Contact us today or fill out a simple 60-second loan application to learn more!