Most forms of home improvement financing consist of some sort of home loan which requires you to pay back the loan amount as well as a certain amount of interest. If your home improvement project needed $5,000 worth of financing you may have to pay it back over a year and would actually end up paying back $5,500 or more to the bank or home improvement lending institution.
That’s how a home improvement finance company makes money: it charges you interest!
However, there’s a way you can often get home improvement financing with no interest at for a limited time as long as your current credit rating is pretty good. Here’s how…
Getting A New Interest Home Improvement Loan
The secret is to use a credit card offered by Lowe’s or The Home Depot or some other large hardware chain. The secret is that a lot of home improvement credit cards offer long no-interest periods in order to get people to use them.
Large hardware stores want you to buy their products for your home improvement projects so they’re willing to offer you a financial break on larger projects that you might not otherwise get from a loan company or bank.
Many times they will offer you a line of credit with absolutely no interest charged for the first year that the loan is open. The key to this is that you pretty much have to buy everything at once (only the items on the first trip are interest free) and if you’re going to purchase any home improvement services then you’ll have to finance them through the hardware store’s credit card. This means you may not get the absolutely best deal on some contractor services but you may still save money with the no interest home improvement financing.
The way to use this to your advantage is to plan out your entire project in advance. So, if you’re going to remodel a bathroom you’d do it this way:
- Make a list of all the new tools you think you’ll need.
- Make a list of all the supplies you think you’ll need.
- Pick out the exact vanity, toilet, shower, sink, faucet and everything else you want for that room.
- Put everything together in one list and then walk into the store, ordering and buying everything immediately after you apply for a home improvement credit card.
Now take your total bill and divide it by 12 months (11 months to be safe) and plan to pay that much each month until the entire credit card is paid off, just before your 12 months of interest-free financing expire.
You may then want to actually cancel your card with that store. In another year or two the store may start begging for your business again and they may allow you to apply for a new credit card, again with interest-free financing. Of course, if you don’t cancel and the card and you simply don’t use it for an extended period of time the store still might notice this and offer you another no-financing-charge period.
If you choose to finance your home improvement project this way then remember that you’ll still have to pay back the loan and you’ll only have a certain amount of time to do it before interest starts being charged. Sometimes the interest for home improvement financing through a store credit card can be high if you’re not careful.
Overall using a hardware store credit card to get a zero percent interest home improvement loan is a good way to finance your home improvement project as long as you have a plan to pay it off within the allotted time. Paying no interest on a home improvement loan is a great way to avoid overpaying for a project.