Loans and Finance - Financing Your Home Improvement There are many ways to finance your new windows or conservatory and below you will find a number of suggestions, together with pros and cons for each. Window Company's Own Finance Most good companies will be able to offer you an option to finance your purchase using a third party company. The sales person will most likely have the forms available that allow you to borrow the full cost of your installation over any period from one to ten years. This allows you to spread the cost in equal monthly instalments and is preferred by most companies because they make an additional 5-10% on every order they take. So, on a £10,000 order, they make up to £1000 for filling in a form. But the advantage to the company doesn't end there, because once you sign another form to say that you are satisfied with the work, they get paid in full from the finance company, so they know that their money is safe. The advantages to the customer are: There is usually no deposit to pay - even on large value orders. You can save using up your bank loan or overdraft favours for emergencies No need to re-mortgage your house Saves your hard cash for other purposes Provides a cooling off period of 7 days by law, providing that you signed the documents in your own home. Note, this does NOT apply if you sign contracts at the company's own premises. The finance company may arbitrate in any dispute - particularly before the satisfaction note is signed But of course, there is a disadvantage too and that is quite simply that this type of loan is often the most expensive type of borrowing (apart from credit cards) that you can get. You know your circumstances better than anyone else, but the things to look out for when you're being sold home improvement finance is that the sales person will almost certainly quote you a WEEKLY repayment in order to make the figure sound low. Of course, you're paying monthly - so a weekly amount of £25 a week suddenly becomes £108.33 a month. Confused? The calculation is £25 multiplied by 52 weeks and then divided by 12 months = £108.33 and the longer the period of the loan, the more interest you will pay - sometimes amounting to 50% of what was initially borrowed. That's a very heavy price to pay for convenience. Other Funding Sources When looking at other funding sources, you should bear in mind that the window company will need to take a deposit from you. That's because you now become a cash buyer. The company no longer has the security of the finance company behind them. Most reputable firms belong to a deposit insurance scheme that protects your money in the event of dishonesty, bankruptcy etc., but it's best to check beforehand (see the window guide). As a rule, most reputable companies ask no more than 20% deposit, but will probably ask for the balance in full (or a good proportion of it) immediately prior to delivery or upon delivery. Bank Loans Bank loans today are easier to get than most people realise. In years gone by, the prospect of going to a bank and asking for a loan was daunting and there was an overriding image of stuffy bank managers granting you permission to have a loan. These days it's far simpler and most banks will arrange a loan for you over the phone in minutes - whether you bank with them or not, so it's worth phoning around for the best rates available. Re-mortgages Recent advice from consumer associations has been to change your mortgage every couple of years and providing you are not tied in to your current mortgage with early redemption penalties, you might well find that by changing mortgage provider and adding the cost of your home improvements to the amount outstanding on your current mortgage works out cheaper than you are currently paying. Loans Online loans are usually cheaper than other types of loans and can be arranged more quickly. It's just a matter of filling in an online form. As long as you are dealing with a reputable loan company, it's perfectly safe to apply on line, as all forms are secure - meaning that your personal information is safe from prying eyes. Secured Loans These days, unless you have an extremely poor credit record, there should be no need to secure your home against a home improvement loan. Although the interest rates sometimes look attractive, these loans can put your home at risk if you suddenly find it difficult to repay them and so should be avoided where ever possible.

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