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Kukun’s home improvement loan calculator is a simple monthly loan payment calculator to help you determine the potential loan payments for a particular loan amount. This is a smart way to evaluate all the financial options you have so you can gauge what you can truly afford.
The home improvement loan calculator is easy to use. Simply enter the loan amount, the loan type, the payment frequency, the interest rate offered by the lender and your loan term.
You will get a cost estimate within seconds! This figure will tell you how much you can expect to pay each month. Keep in mind that a longer term can lower your monthly payments, but will increase the total interest you’ll pay.
Since you can choose different permutations and combinations on the calculator, it’s easier to compare different results and know exactly how much you can save with each value.
Simply put, a home improvement loan is a monetary loan that’s taken in order to update your property or get major home repairs done. The money is repaid in regular payments over a set period of time.
Here are some terms and values to understand your home improvement loan better:
A credit score refers to a number (ranging from 300 to 850) that indicates how “creditworthy” a person is. The score is determined from an analysis of the person’s credit files and credit report. The higher the credit score, the greater the chance of that person will qualify for a loan. They will also get more favourable interest rates and credit limits.
Here are the ranges of credit scores are their ratings:
|FICO Credit Score||Rating|
|720 and Higher||Excellent credit score|
|690 to 719||Good credit score|
|630 to 689||Average credit score|
|300 to 629||Bad credit score|
This refers to the amount of money you receive from the lender, minus any origination fee. Borrowers with an excellent credit score and an impeccable credit report are usually able to secure a higher loan amount.
The loan type refers to the kind of home improvement loan that you receive from a bank or financial institution in exchange for future repayment of the principal amount as well as interest.
The types of loan you choose from are an unsecured loan (a personal loan or cash advance loan) or a secured loan (mortgage, home equity or home equity line of credit).
This refers to your loan repayment schedule. Most loan companies give you the option of choosing between monthly, semi-monthly or bi-weekly loan payments.
The interest rate is the percentage of the principal amount charged by the lender for the loan. The longer your repayment term, the more interest you can expect to pay.
This refers to your loan’s duration, which is how long will it last if you make the required minimum payments each month. A typical loan term is 10 years but it may be as long as 30 years.
Here are some of the home improvement financing options that homeowners can explore.
In the case of a personal loan, you borrow a fixed amount of money and pay it back in monthly installments with interest. The loan amount is paid over the life of the loan (the loan term). It’s usually somewhere between one year and 12 years. That means that your monthly payments may be significantly larger than for other types of home improvement loans.
However, applying for an unsecured personal loan is easier and quicker. If you choose an online lender offering a personal loan, the application-to-approval process could be completed on the same day you apply. Keep in mind that you’ll need a good or excellent credit score to qualify for the lowest rates in this type of unsecured loan.
A home equity loan is like a second mortgage. The loan is given using your house as collateral. With this type of loan, you receive a lump sum amount at a fixed interest rate to cover your renovation costs.
The entire amount of the loan will be in your bank account once the loan is approved. After that, you’ll make repayments over five to 20 years.
Due to the fixed rate, your monthly payments remain more or less the same, even if interest rates rise during the life of the loan (loan term).
A home equity loan works well to finance home improvements if you have at least 20% equity in your house. Since you can use your home as collateral, the interest rates are typically going to be lower than for personal loans. Plus, you can borrow between 80% and 85% of your home’s value, minus what's left on your mortgage.
This kind of a loan is best-suited for large-scale home renovations, such as remodeling a kitchen, a bathroom renovation or another major home project.
A home equity line of credit is almost like using a credit card. Instead of borrowing a huge amount of money at once, you can tap into your home’s equity when you need it.
The average draw period – the amount of time you can withdraw funds – for a HELOC is up to 10 years, with repayment period going up to 20 years. After the loan has been repaid, the homeowner can renew the line of credit if needed.
A HELOC is your best loan option if you’re either unsure about your total home improvement project cost or if you plan to pay for it in stages. The loan could be for anything, from adding a new kitchen island to building a sunroom or other addition.
You can get a line of credit worth up to 85% of your home’s value, minus what’s owed on any mortgages. Keep in mind that HELOCs come with variable interest rates, meaning they fluctuate to match current market rates.
This type of loan is a refinancing option that allows you to convert the equity in your home into cash. It replaces your existing mortgage, and you may be able to get better terms. The new home loan will be for a larger amount than the existing one, and then you get the difference between them paid out to you.
0% APR (annual percentage rate) credit cards, which waive interest charges for an introductory period of about 12 to 18 months, are another option to finance your home improvements, especially smaller home upgrades. However, you should only use this option if you’re confident that you can pay off the card’s balance in full before the introductory offer expires.
The maximum amount you can borrow to update your home is about 90% of the market value of the property.
Most home improvement loans are between $1,000 and $100,000. And the interest rates range from just under 6% to around 36% (the higher end is for those with a bad credit score). The loan terms for repayment usually range from 10 to 30 years.