Home improvement projects can boost your property values and make you fall in love with your house again, but they can also be expensive. While tapping into your home equity is one way to fund a new kitchen or bathroom makeover, this approach does come with some inherent risks. A personal loan offers a few advantages for many homeowners. Here’s a closer look at why you should enlist a local bank to cover your renovation costs.

3 Reasons to Get a Home Improvement Loan

1. They Don’t Require Collateral

Second mortgages and home equity lines of credit may offer attractive interest rates, but the debt is also secured by the value of your house. If you fall behind on the payments, the lender can put a lien on your home or even seize the property, even if you’re current on your primary mortgage. A personal loan from a local bank will be unsecured, which reduces your risk if something goes wrong.

2. Shorter Terms Means Less Interest Paid

The repayment period on home equity loans is usually 10 to 15 years, and second mortgages may have terms of up to 30 years. Over the life of the loan, this can mean paying thousands of dollars more in interest. Even if a personal loan has a higher interest rate, a payment term of five to seven years can save thousands of dollars in the long run.

3. Personal Loans Don’t Depend on Your Equity

If you owe more than your house is worth or haven’t had time to build much equity, you may be ineligible for a home equity line of credit. Fortunately, banks issue personal loans based on your income and credit history, making them a good option for those bought their home in the recent past.

As the premier local bank in Cookeville, TN, Putnam 1st Mercantile Bank offers personal attention to homeowners throughout the area. They understand the needs of their community and proudly provide a wide range of financial services for any situation, from checking accounts to personal loans. Visit their website for more on their lending services or call (931) 528-6372 to speak with a loan officer today.