Summer time is officially here, and if you’re like most of us, you’re combing the department and home improvement stores. Every home seems to need a few new things in the summertime, whether it’s a fresh coat of paint, a new deck, or a swimming pool. OK, maybe it’s a bit of an exaggeration to say that we need those things, but they certainly make life a lot nicer. And a personal loan is often a great way to get them.
One thing you don’t want to do when it comes to any kind of borrowing, though, is overdo it. And it’s easy to do. When you’re working on projects out in the yard or on the house, it’s easy to get into some serious money. So, before you take out multiple loans, approach your home improvement from a common sense, proactive approach:
- First of all, separate the things that need to be done from the things you would like to do with your home. If the roof is leaking or you have some kind of structural damage, you probably need to get that fixed. A pool or deck, on the other hand, is a luxury item on some level.
- Next you need to take a look at what you can comfortably carry for a debt load. If you’re currently paying more than 20 or 25% of your income for debt repayments (other than the mortgage), you should avoid taking out a personal loan for anything other than a true necessity.
- Go into all financial transactions with the end in mind. Know how much debt you can comfortably carry, and always have enough saved that you could continue making your payments for a couple months at least if you were to lose your job.
- Otherwise, if you want something, and can afford to repay the loan in a timely manner, go ahead and get it if you want it. Many of the things you would buy with a personal loan enhance the value of your home while also adding to your own quality of life. And there’s nothing wrong with either of those. As long as you maintain good credit, your interest rate usually won’t even be terribly high.
Photo via Pink Sherbet Photography
