Roof replacement is a serious investment that often can’t be put off any longer. This expense might turn into a serious financial hardship for some house owners, so it’s important to think in advance what financing options could be available for you.
This option has a significant drawback: very few people have that much cash available immediately. Otherwise, it would be very convenient to pay no interest and to avoid the tiresome procedure of applying for a loan.
If you have never taken credits before, you’ll definitely have to pay interest. But if your credit history is good or excellent, you might try to qualify for a 0% APR promotion credit card. In this case, you’ll be able to pay the debt off interest-free. However, the sum you can get via a 0% APR promotion might be not enough to cover the expenses of reinstalling the roof.
Normally, you can get a personal loan for a roof installment or roof replacement but with some lenders, you might face restrictions. You can receive the loan the same day as you apply for it and repay it off with a set repayment plan. Most likely, it will be a two-year loan with a 10.12% interest rate (or even lower, if you have a good credit history). But if your credit rating is bad, the rate might go up to 30% or even higher.
Home equity loan
This option discourages some people with the risk of losing their homes if they default on the loan. The second shortcoming is that processing fees for this type of loan can be very high. At the same, home equity loans remain available for those who can’t get any other type of loan.
Also, since the home acts as collateral, the interest rate might be lower than that of a personal loan. Moreover, the interest can be deducted from the taxable income of the homeowner, which makes the deal quite appealing.
This option can be a bargain because your roofing company will act as a middleman between you and the bank. Roofing companies that finances can often secure better deals, so the interest rate will be lower than the one you could obtain on your own. You won’t risk your home, and you’ll save time and effort on choosing a bank. At the same time, the roofing company might save time on choosing a bank as well, and in this case, you might miss a bargain.
But very often special promotions by roofing companies beat banks and other lenders. Roofing companies secure big volume lendings for the banks and thus can offer equal benefits to all of their customers. The roofer will help you calculate the expense precisely and to manage your budget in a most cost-efficient way. But mind that in this case your credit history also counts.
Hopefully, you are among the lucky ones who can pay for a new roof out-of-pocket. If not, you can use your credit card or get a loan (personal, home-equity or contractor-specific one). The most economically viable way would be to get a 0% APR promotion credit card, if your credit history is good enough. Otherwise, you should find a roof company with financing and try to get better rates than you could on your own.