How to finance a roof

If you have bad credit …

A damaged roof waits for no one. If your roofing project is critical but you don’t have the credit rating for a loan from the lender of your choice, you have options. Here are a few to consider.

  • A personal loan for borrowers with bad credit: There are credible professional lenders who offer poor or fair credit loans. Check with several lenders to find out which one offers the lowest interest rate and the most attractive repayment term.
  • A loan from your local bank or credit union: Even if your credit is far from perfect, your bank has access to your accounts and knows, for example, how often you make deposits and how well you are managing your bank account. Your financial institution may be more forgiving than a lender with whom you have no previous relationship.
  • A secured loan: If you are having difficulty qualifying for a regular loan, you can ask your preferred lender for a secured loan. When you use collateral to get a loan, the loan is called a “secured loan”. Collateral can be anything of value that can be sold, such as a house, vehicle, or even a savings account. It’s important to remember, however, that if you miss loan payments, the lender can take your collateral as payment.

For more help, check out our guide: Best Personal Loans for Bad Credit

The best ways to finance a new roof

Here are some of your options for financing new roofing.

Personal loan

One of the benefits of taking out a personal loan is that it can be used for just about anything. In addition, personal loan interest rates are lower than credit card rates (up to 8% for borrowers with good credit). The amount that you can get with a personal loan varies by lender, but generally ranges from $ 1,000 to $ 50,000.

Once your roofer has informed you of the cost of installing the roof, it’s time to research personal lenders. Personal loans are available from banks, credit unions, and online lenders.

Find a few lenders that you would like to compare. Then complete a loan application with each. Each lender will let you know if you qualify for a loan after they review your credit history (this will not affect your credit score). At this point, lenders will tell you:

  • What will your interest rate be
  • How much will your monthly payment be?
  • If they add fees like origination fees

Using this information, you can decide which one is best for your roof replacement project. Be sure to compare the total cost of the loan (the APR) with each lender, rather than just looking at the interest rate.

If you have a good credit rating, you will have a choice between lenders, so be picky about which lender you work with.

Roofing company financing

Contractors know that many customers do not have the cash available to pay for a major repair to their roof. This is why some roofing services offer loans, either directly or through a lending partner. While taking a roofing loan right away might seem convenient, it’s worth checking out your other options to make sure you’re getting the best interest rate, the best loan term, and the best monthly payment possible. It’s possible that a roofing loan will provide all of the best loan features available, but you won’t know it if you don’t shop around.

Home equity loan

Another roof financing option is to take out a home equity loan. A home equity loan is a type of secured loan, which means that your home serves as collateral. Secured loans generally carry low interest rates.

Like most standard loans, after the loan is approved and the loan documents signed, all funds are released to you. You repay the loan in regular monthly installments.

Home Equity Line of Credit (HELOC)

As the name suggests, a HELOC is a line of credit. A line of credit is similar to a credit card: the lender gives you a specific spending limit, and you can borrow as much or as little as you need up to that limit. This is because you can take a lump sum, pay it back and borrow it again for a set number of years (usually 10).

Like a home equity loan, a HELOC uses your home as collateral. HELOCs also carry low interest rates, and when you’re undertaking a home improvement project as big as a roof replacement, it makes sense to pay as little interest as possible.

Credit card with a promotional rate of 0%

If you have a great credit score, you may be eligible for a new 0% APR credit card. These cards typically give the cardholder 12 to 18 months of interest-free borrowing power.

For example, if your card’s promotional rate lasts 18 months and your damaged roof costs $ 17,000 to replace, 18 equal payments of $ 945 would pay for the full roof replacement – without paying interest.

Things to consider when financing a roof

Borrowing money to install a new roof is nothing like borrowing money to pay for a kitchen remodel or destination wedding – you can’t postpone the project until you have it. time to find the money on your own. Instead, you need to make the best decision possible with the limited time you have. Here are some things to consider before making your roof financing decision:

  • Did I get quotes from more than one licensed roofer so I know I’m getting the best deal?
  • Am I confident enough in my ability to make the monthly payment to risk my house or other valuable asset by taking out a secured loan?
  • Do I have money in my emergency fund to pay for part of the roofing project so that I can finance less?

A new roof might not be as exciting as a dazzling new kitchen counter or a luxurious hot tub, but it’s hard to overstate the feeling of having a roof over your head. If your roof has seen better days, consider these options when it comes time to replace it.

About Paul Cox

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