Does your kitchen feel outdated, and do you encounter an urge to replace the pale cabinets? As you check your savings, you conclude that you need to delay the renovation further. However, delaying serious repairs and replacements may affect the home’s aesthetics. Don’t delay if you must change the interiors.
Check the kitchen renovation finance options in the UK and what may work best for your budget. If too many finance options confuse you, the blog may help. It lists the options and when you must use them. It may help you renovate your kitchen by tapping the right finance module.
How much does the new kitchen cost?
According to Checkatrade.com, “A new kitchen may cost you anywhere from £7000-£10000 for a small to large kitchen”. The price includes the labour cost of removing the previous kitchen setting and installing a brand new one. It includes costs like- flooring, plumbing, or decorating a few key areas like a built-in chimney, hob, and hood.
Source: Checkatrade.com
This data reveals the basic costs of small and large kitchens for basic improvements and installations. It may give you the idea of what to expect.
How to finance a new kitchen in the UK?
Loans may help you achieve your dreams if savings fall short. You can analyse various types of personal loans and choose the one that matches your needs and budget. Here are some finance options that you can tap for kitchen renovation:
- Quick loans
These loans are ideal for immediate and small kitchen repairs and renovations. You can use it to counter issues like- repair the kitchen door knob, replace windows or treat backsplash immediately. You may get up to £3000 on quick home renovation loans for kitchen renovations online. You get the money the same day and mostly within an hour to meet emergency expenses quickly. It does not require you to pledge collateral or provide a guarantor. Instead, you may get the loan based on your affordability.
- Personal loans
If you have a specific purpose, like kitchen renovations, personal loans could be a good choice. It helps you get an amount up to £25000 without staking up any asset or providing any collateral. The interest rates on personal loans for renovations remain competitive. It could be anywhere between 5.8%to 20% APR.
However, you may also fetch around 6-9% with good credit scores. The flexible approach towards repayments and fixed amount to pay monthly makes these instalment loans a popular way to finance your home renovation needs.
- Home equity loans
A home equity loan lets you borrow against the specific proposition of your home’s equity. For example, if you have only 80% of equity in your home, you can borrow only against that percentage, not on 100%.
These are secured loans that stake a particular portion as collateral with the loan company. You may get a higher loan amount according to the current value of the property and LTV (loan-to-value).
Some individuals may get around 80% of the LTV as a loan. You may encounter low interest rates on Home equity loans in the UK. It is currently up to 5.6% to over 9% APR. It depends on the product type, borrower’s age, and LTV.
It is ideal to consider this option if you need over £100,000 for your project and are a homeowner. It could also be a good option for individuals with bad credit scores.
- Bad credit loans
Sometimes, you cannot wait until your credit score improves, especially when you encounter leakage issues in your kitchen that require immediate repairs. Here, bad credit loans may help you get instant cash depending on how much you can afford to repay comfortably. The interest rates on bad credit loans remain slightly high (30-99% APR) or 9.7% for large loans.
Therefore, it is important to use a loan calculator. It will help you determine the amount you can comfortably afford to repay. Tapping a lower amount will help you save money on interest costs. Moreover, choosing a longer term may help you improve your credit score. You need to ensure consistent loan repayments to ensure that.
- Short-term loans
If you have some small kitchen upgrades that cannot be delayed, short-term loans may help. It may help you counter the critical needs immediately. You may consider it if you need a loan of up to 3000 pounds to meet urgent requirements. Before applying for short-term loans from a direct lender, check the total cost that you may need to pay.
It may increase or decrease your liabilities. Therefore, compare the costs and interest rates that you may fetch. The best part about the loan is that you may get debt-free quickly, as the instalments are low and fixed for just a 12-month repayment period.
- No guarantor loans
Individuals living alone or far from families may also face basic kitchen issues. For example, gas leaks, electrical appliance failures, or water seeping through floors or cabinetry may require immediate action. You may not have enough cash on hand to tackle the problems.
However, at the same time, you don’t want to bother your guardians for petty issues. Here, you may consider a no-guarantor loan. It may help you tackle any small repair or renovation with a payout of up to £10000.
It does not need to provide a guarantor or collateral to qualify for the loan. The interest rates on no guarantor loans remain 9.3% – 1700% APR for those with poor credit scores. Therefore, borrow only the amount that fills your needs perfectly.
Check other loan options and compare the total loan costs before tapping no guarantor loans. Also, you may consider a guarantor-based loan if you want to save money on interest and repay the dues by splitting the responsibilities and payments. It eliminates or reduces the chances of defaulting on the loan. However, the only condition is that you must have a reliable person to stand by until the loan agreement is completed.
Bottom line
These are some of the best kitchen renovation finance options that you can consider. Identify the eligibility criteria, best uses of the loan and interest rates before choosing the option. Check the expected costs by using a loan calculator. It may help you decide the right thing for your needs. Avoid borrowing more than is needed for the loan.
Jessica Rodz is the Senior Content Writer at Cashfacts. She has a long career in the field of content writing and editing. Jessica has the expertise in the UK lending marketplace where she has worked with 7 different lending organisations and acquired many responsibilities from preparing loan deals and writing blogs for their websites.
At Cashfacts, Jessica is managing a team of experienced loan experts and doing a major contribution in guiding the loan seekers via well-researched blogs. She has done graduation in Business (Finance) and now currently doing research papers on the UK financial sector.
