If you’re planning on sprucing up your home over the coming Easter and May Bank Holidays and don't have enough in savings to cover the cost, here are a few ways you can pay for it.
With three Bank Holiday weekends on the horizon, we've all got some extra time to carry out some home improvements.
Of course, the best way to pay for such work is to save up over time, setting aside a little each month. But if you haven't been able to do that, there are some decent finance deals available that can help you cover the cost.
0% credit cards
A fresh lick of paint, changing cupboard doors in the kitchen or a garden makeover are small scale projects you can probably handle yourself. As the labour is free you’ll only need to pay for your materials.
If you think your small DIY job will cost under £5,000 a 0% purchase credit card is just the ticket to cover the expense.
At the moment you can get a market-leading 18 months of 0% on purchases with the Santander 123 Credit Card, Santander Purchase MasterCard and the Tesco Clubcard Credit Card for Purchases, which gives you a year and a half to pay back what you spend before your balance starts getting hit with interest charges.
A great one to go for is the Santander 123 Credit Card. As well as 18 months 0% on purchases you can get cashback when you spend at certain retailers. You can earn 1% at supermarkets, 2% at department stores and 3% at petrol stations or on National Rail and TFL spends. However, you’ll need to pay an annual fee of £24 for this card and once the interest-free period ends an APR of 16.5% will apply.
You can also get cashback on interest-free spending with the American Express Platinum Cashback Card. It offers a smaller 16-month 0% purchase period but offers 1.25% cashback for every £1 spent and 2.5% cashback for your anniversary month with the card. However, a £25 annual fee applies. The APR on this card once the 0% period ends is 18.7%.
For more on the best interest-free deals check out The best 0% purchase credit cards.
Personal loans
If the scale of your project is bigger than you can handle by yourself or requires more expertise you’ll probably need to pay somebody to help you out or do it for you. This will probably need a bigger budget than the average 0% purchase credit card can offer and the ability to pay tradesmen and labourers cash.
In this scenario an unsecured personal loan might be more suitable for your plans.
With a personal loan you can spread the cost of what you borrow at a fixed rate over a number of years, allowing you to pay off what you owe in equal monthly instalments, without offering up any security to the lender. These are simple to apply for and the cash can be in your account in a few days.
You can choose to take out a small loan (£5,000-£7,499), a medium-sized loan (£7,500-£15,000) or a large loan (£15,000 and over).
However, the most competitive rates at the moment are medium-sized loans, where lenders are offering record low rates.
You can compare deals for yourself using our comparison centre but below I’ve set out the best rates around for those looking to borrow £10,000 over five years.
|
Loan |
Representative APR |
Monthly repayment |
Total amount repayable |
|
4.4% |
£185.76 |
£11,145.60 |
|
|
Yorkshire Bank Online Personal Loan |
4.4% |
£185.76 |
£11,145.60 |
|
4.5% |
£186.02 |
£11,161.20 |
|
|
4.5% |
£186.02 |
£11,161.20 |
|
|
4.5% |
£186.02 |
£11,161.20 |
|
|
4.5% |
£186.02 |
£11,161.20 |
To keep up to date on the latest personal loan rates check out The cheapest personal loans.
Finance deals from the shops
Many of the big names in home improvements offer some sort of finance package if you shop with them, like a personal loan, interest-free credit or a buy now pay later option, so it’s worth checking to see if you can get a better deal for small as well as big projects.
For example at B&Q, customers that spend over £500 on kitchens, bedrooms or bathrooms can opt to take out a personal loan. You can borrow between £450 and £25,000 over a term of up to five years for a representative rate of 4.9%. If you borrow between £7,500 and £15,000 you're better off seeing if you can get the market leading 4.4% rate on offer with Clydesdale, but if you borrow over £15,000 B&Q's rate is more competitive than what ordinary lenders offer (larger loans are available from 5.7% APR on the high street at the moment).
[SPOTLIGHT]B&Q also has a buy now pay later option when you spend over £1,000 on kitchens, bedrooms or bathrooms. You can borrow between £450 and £25,000, but with this deal you pay an initial minimum 10% deposit then pay nothing for 12 months. After 12 months you can choose to repay the loan in full and no interest will be charged.
Or you can opt to spread the cost over up to three more years at rate of 8.9%. Although the rate isn't competitive you might like the flexibility and the chance to get what you borrow completely interest-free.
At Homebase you can also take out a personal loan, but you’re not limited by the type of project you want to undertake like with B&Q. If you spend £1,000 or more you can get a 4.9% rate on borrowing up to £20,000 that you can spread over three to five years. Again if you borrow between £7,500 and £15,000 you're better off going for a market leading personal loan costing 4.4% APR, but if you borrow over £15,000 Homebase's rate is more competitive than what you can get from the high street.
Alternatively Homebase also offers a buy now pay later option when you spend over £1,000 in one purchase. You can choose to settle your balance in full within the first 12 months for a £29 settlement fee or choose to spread the cost over five further years. However, this is a very pricey way to pay for your home improvement as the loan attracts a 29.9% APR, which is worse than some credit cards!
More on borrowing:
The best money transfer credit cards
Overdrafts are priced unfairly, says FCA
The best credit cards to use on your travels