Are you considering taking out a home improvement loan for your home remodel? Like any financing option to help you make purchases, it has its benefits and drawbacks.
Not knowing the pros and cons of taking out a home improvement loan can result in problems ranging from frustration, to wasting time and money, to ultimately being unable to realize your remodeling goals.
As a home remodeler with over 15 years of experience in the Mid-Michigan area, we are a preferred builder in partnership with Michigan State University Federal Credit Union (MSUFCU). Our goal is to not only design and build beautifully remodeled spaces but also to provide you with valuable information about financing and pricing so you can turn your home remodeling dream into a reality.
By the end of this article, you’ll know what an unsecured home improvement loan with MSUFCU is, as well as its benefits and drawbacks. You’ll be on your way to making the right financing decision in order to move forward on your remodeling project.
What is an MSUFCU unsecured home improvement loan?
MSUFCU provides a loan specifically for home projects called the unsecured home improvement loan. Usable for projects ranging from building a new deck to finishing your basement, this loan is versatile and easy to obtain.
An unsecured loan is a type of loan where the borrower does not have to provide any collateral to secure the loan. Instead, the borrower's credit score is used to determine their ability to repay it.
This loan is available to MSUFCU members with rates as low as 8.99% APR, and loan repayment term lengths ranging from 36 - 180 months. The APR for your loan will depend on your Experian VantageScore 4.0 credit score and term length.
1) Stated loan rates are available to members with qualifying credit scores. Actual rates may be higher and will be determined by a member's individual credit score, loan term, and collateral if applicable. Actual loan term may vary and will be determined based on the member's individual credit history and ability to pay. All loans subject to credit approval.
2) Home Improvement Loans are available for Home Improvement purposes and do not involve security in your home. The monthly payment per $1,000 borrowed at 8.99% APR for a term of 36 months would require 36 monthly payments of $31.80 based on 30 days to first payment.
Pros of an MSUFCU unsecured home improvement loan
Low APR: With rates as low as 8.99% APR, MSUFCU can save you money over the life of the loan by offering competitive interest rates. The actual APR you are approved for will depend on your credit score and your desired loan length.
Versatility: An MSUFCU home improvement loan can be used for a wide range of projects. From repairing an old deck to remodeling your whole kitchen, it can be used to finance a variety of home improvement projects.
Ease of application: MSUFCU makes it easy to apply for this loan. You can apply on their website, in the mobile app, over the phone, or at a physical branch. They have made the loan approval process as seamless as possible.
No collateral required: Since this loan is unsecured, you won't have to use any assets, such as your home or car, as collateral to obtain it.
Flexible repayment terms: With loan repayment lengths ranging from 36 - 180 months, you can choose a repayment option that will fit within your monthly budget.
Cons of an MSUFCU unsecured home improvement loans
Credit requirements: To gain approval for the unsecured home improvement loan, you must have a minimum 600 credit score.
Loan amount maximums: An unsecured home improvement loan is a great option to fund a kitchen, deck, or single-room project, but may not be enough to remodel your entire home if that is your goal.
Must be a member of MSUFCU: While becoming a member at MSUFCU is an easy process, you must take this step to get approved for their home improvement loan.
Higher APR than a SmartLine HELOC (Home Equity Line-Of-Credit): MSUFCU’s home equity line-of-credit has a lower APR than their unsecured home improvement loan. While the HELOC loan has more restrictions, you will pay less interest in the end, so you should carefully compare your options.
Credit score and loan term determine your APR: A major determinant for your loan’s APR is your credit score and the repayment period of your loan. APRs are as low as 8.99% for short-term loan periods and excellent credit. However, if your credit score is lower or you are looking at longer term lengths, your APR will be higher.
Next steps to be approved for an MSUFCU home improvement loan
While a home improvement loan is a great option to help homeowners like you fund their home renovations, there are both pros and cons you should consider.
Like any financing mechanism, this loan has benefits and drawbacks. Understanding these will help you determine if a home improvement loan from MSUFCU is the right choice to help you finance your upcoming home remodeling project.
It's a good idea to speak with a lending expert and explore all of your options to ensure that you find the best financing solution for your specific needs and budget.
As a preferred builder in partnership with MSUFCU, Custom Built is here to connect you with the best possible financing options for you and your project. Or, you may like to speak directly with MSUFCU regarding their home improvement loans. Contact their Mortgage Department at 517-333-2424, option 3.
To learn more about Custom Built’s design and remodeling services, speak with one of our experts. We would love to discuss your project details and see if we are the right fit for you.
To learn about how much you can expect to pay for a home remodeling project, read the following articles:
*The information provided in this article is for informational purposes only and should not be considered official financial advice. It's always best to consult with a financial advisor or professional before making any financial decisions.*