How to Leverage a Personal Loan to Maximize Home Sale Value

By John Giannone | October 28, 2022

Pre-sale home improvements will maximize your home value and expedite the sale of your home. Sounds great in theory, but the process can seem hard to actualize. One may not have the cash on hand to benefit from these improvements or may not want to tap into their savings to pay for it. In this article, we’ll walk through a step-by-step example of how a personal loan can be used for your pre-sale home enhancements and how it can have a great return on your investment (ROI).

1. Consult your Agent

Before listing or even photographing your home to list for sale, you should walk through it with your real estate agent. This walkthrough will identify any upgrades your agent recommends that will help sell the home faster and get you more money.

Generally, these include painting, removing carpeting, decluttering/depersonalizing, making repairs, staging, or even renovating your kitchen and/or bathrooms. You should be sure only to make upgrades that give you the best return on your money, focusing on the kitchen and bathrooms. According to Zillow, minor kitchen remodels, where you replace cabinet fronts, hardware, countertops, backsplash, and upgrade appliances, have an average ROI of 81%. This means spending $20,000 on the kitchen should increase your home’s value by about $36,000. You can review our separate article, Five Simple Home Improvements to Maximize your Home’s Value, for more information on the best home upgrades.

After reviewing the suggested upgrades with your agent, you should reach out to a contractor you know or ask your real estate agent to recommend one and any other vendors you may need. Remember, with Feeasy®, you are free to use any contractor or vendor you would like – we do not have a pre-set list that you must choose from. You should meet with multiple vendors to compare prices and select the one that works best for you.

2. Secure Financing and Pay Vendors

Once you know how much your pre-sale home improvements will cost, you should check your rate using Feeasy®’s platform, where you can compare pre-qualified personal loan offers from over 50 lenders without affecting your credit score. Please head over to our separate article Three Simple Steps to Getting a Personal Loan to learn how easy securing financing is through Feeasy®.

Once you receive your loan proceeds via wire transfer directly to your checking account, you may pay your contractor/vendors as you normally would. Your first loan payment will generally be due one month from your loan fund date.

Example

Let’s assume the total cost of the work suggested by your real estate agent comes out to $30,000. Assuming you are qualified, you may consider taking out a personal loan for a bit more than you need and save the difference to make payments until your house sells. This way, you are not out of pocket. Let’s say that using Feeasy®, you secured a $40,000 loan with a term of 48 months at 5% APR. In this case, your monthly payment is roughly $920. This would allow you to pay the costs of the improvements and have $10,000 left over to make payments on the loan for about ten months without going into your pocket. In many cases, this may be longer than it will take to sell your home.

Let’s also assume that from the time you receive the loan proceeds, make the improvements, and sell/close on the house is four months, and your ROI on your spend is 60%. In this case, you would spend $30,000 on improvements but get $48,000 back when you sell. At closing, you would then pay off the remaining loan balance of approximately $36,000 and keep the difference ($12,000) plus the six remaining payments of $920 that you didn’t use ($920 x 6 = $5,520) for a total gain of about $17,520.

There can be a huge benefit to making home improvements financially. Remember that these home improvements are likely to help sell your home faster, which means less time carrying the cost of it while it’s on the market. You should consult your real estate agent about pre-sale home improvements and use Feeasy® to assist you in securing a personal loan to maximize your home value.

—

Ready to apply for a personal loan? Check My Rate

Feeasy® is here to assist you at no cost. If you have any questions about personal loans or would like to speak to a Feeasy representative, please reach out to us at:

info@itsfeeasy.com | 646-770-1456

Minimum Period for Repayment: 1 year

Maximum Period for Repayment: 12 years

Feeasy® does not charge fees. Feeasy® may receive a fee or commission for introductions to its partners.

Personal Loan Repayment Example: The following example is for illustrative purposes only and depicts the APR, monthly payment, and total payments during the life of a $20,000 personal loan with a 3-year repayment term, and a fixed rate between 2.99% APR–35.99% APR. It works out to 36 monthly payments ranging from $581.54–$915.96 for a total amount of payments ranging from $30,935.44–$32,974.63. This repayment example assumes that all payments are made on time, with no pre-payments. Actual rates may vary based on repayment term, loan amount, creditworthiness, and other terms and conditions. Each state has specific rules and regulations that govern lending partners. The amount you can borrow, the APR, and repayment term are based on your state's laws, the lending partner, and your creditworthiness.

¹ The operator of this website is not a lender or party to any loan or other transaction, does not broker loans to lending partners, and does not make loans or credit decisions. This website will submit the information you provide to lending partners in the database of Monevo through an API integration depending on the information provided, who will first use a soft credit check(s) to assess your eligibility for a loan. The amount of any loan offer, if one is made, will vary depending on the lending partner, your creditworthiness, and your state’s laws. There is no guarantee you will be presented with any personalized loan offers, or that upon presentation of any personalized loan offers you will qualify for the rates, fees, or terms shown on this site.

² The loan offers that appear on this website are from lending partners from which Monevo receives compensation for its services, tools, and facilities. The underwriting criteria necessary for approval is determined by the lenders (not Feeasy) and it is imperative that you review each lender’s terms and conditions before proceeding with an application for a loan. You must determine which loan works for you and your personal financial situation. All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each provider’s discretion.

³ APR Disclosure: The Annual Percentage Rate (APR) is the yearly cost of credit, represented as a percentage. The APR includes fees related to originating the loan, not just the interest payments. By law (the Truth in Lending Act), the lender must show you the APR before you enter into a loan agreement. States have laws limiting the APR that the lender or partner can charge you. Please read the lender's terms and conditions in full before proceeding with a loan.

Feeasy is completely free to use. We will never charge you a fee for our service. Instead, Feeasy may receive a fee or commission from Monevo for introductions to its partners.

This website does not constitute an offer or solicitation to borrow, acceptance into any particular loan program, or specific loan terms or conditions. Providing your information on this website does not guarantee that you will be approved for a loan.

If you receive a loan offer from one of the lending partners it is imperative that you review each lender’s terms and conditions before proceeding with an application for a loan and please note, that at the point of application with the lending partner you may be subject to a full credit check.

To help the government fight identity theft, the funding of terrorism and money laundering activities, lending partners may verify and record information that identifies you. The operator of this website is not an agent, representative or broker of any lender. We do not endorse or recommend any lending partners.

Terms and Conditions Apply: Feeasy reserves the right to modify or discontinue products at any time without notice. To qualify, a borrower must be a U.S. citizen or other eligible status and meet the lenders’ underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates at the time of application and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, income, and other factors. Rates and Terms are subject to change at any time without notice. Loans originated by Feeasy are subject to state restrictions and may not be available in all states.

Feeasy is operated by Feeasy LLC, 29 Valley Drive, Suite 4483, Greenwich, CT 06830 United States.