Can I Use a Short-Term Loan for Home Improvements?

Home improvements can be expensive, and in some cases, a short-term loan may be right for you if you need to undertake extensive and expensive home improvements, such as a loft conversion or a kitchen renovation. It may be the case that you simply need a little extra money to cover some unexpected and additional costs rather than the full cost of any home improvements and so a short-term loan may be able to help.

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Read on to see what short-term loans are, how they work, as well as how they can be used for home improvements.

What Do Short-Term Loans Do?

A short-term loan is a loan that is paid back over a short period of time. In the UK, short-term loans are typically used for any immediate financial issues. Depending on the lender and your personal financial situation, the loan can then be paid back in equal installments over several months to an agreed repayment schedule.

Offering access to funds quickly, short-term loans are typically smaller loans than traditional loans used for home improvements, like secured loans and mortgages. Thus, short-term loans will typically be used when a smaller but no less important amount of money is needed and where a bank or traditional lender will not fund a loan.

What Types of Short-Term Loans Are There?


There are several types of short-term loans that are either secured or unsecured. Secured loans require collateral; meaning if you cannot pay the loan back, whichever asset you pledged, such as a house or car, will then be repossessed.

Secured loans are considered less risky by lenders due to the collateral acting in a guarantor capacity for the loan and, therefore, sometimes may offer lower interest rates for secured loan options as opposed to the case of short-term loans like payday loans.

Meanwhile, short-term unsecured loans do not come with any collateral and may be a good option if you have a good credit score.

However, these tend to come with higher interest rates. Depending on your personal financial circumstances, an unsecured loan may be better for you, or even a longer-term loan option like a 12-month loan in some cases, depending on your financial position.

However, as with all loans and forms of credit and finance, it is important to consider all the implications, such as any ongoing debt, before borrowing a loan in any form.

How Can I Use a Short-Term Loan for Home Improvements?

Whether you have home repairs to consider, like a leaky roof or broken down boiler, or if perhaps you are looking to redecorate a bedroom, a short-term loan can be used for home improvements.

Short-term loans can typically be used for a plethora of different purposes around the home, including:

  • Building an extension

  • Redecorating a room

  • Fixing a broken boiler

  • Fitting a new kitchen, bathroom, or even garden landscaping

  • Repairing a roof or faulty wires

  • Renovating to sell your property

Whether you are looking to renovate your property to sell at a higher price or simply need to update your surroundings, a short-term loan may well be a great option, particularly if you need the work done and have no alternative route to finance.

Is a Home Improvement Loan Right for Me?

Short-term home improvement loans are not for everyone. For example, if you don’t think you will be able to repay your loan on time and in full to the lender, you should avoid borrowing money for any purpose, including home improvements.

However, if you are confident you can repay and you meet all of the desired lender’s eligibility criteria, a home improvement loan in the short term could help you increase the value of your home and may also help you improve your quality of life at home through improving the property itself.

Advantages Of Using a Short-Term Loan for Home Improvements

Your everyday quality of life can be greatly affected by the environment you live in, so a short-term loan can be a viable option if you have home repairs in need of doing, which can be covered by a personal loan. Here are the advantages of using a short-term loan:

  • Short-term loans are an appropriate way to borrow money, whether you need immediate financial help or are simply trying to free up some spare cash for other things.
  • Short-term loans can be applied for easily, and the money is received quickly. making them suitable if you are in need of money fast without the fuss.
  • Being able to continue your everyday life while attending to any other ongoing costs can be achieved with short-term loans. They are also handy as you can borrow your desired amount and, depending on the lender can pay it back in fixed monthly payments suited to your financial situation.

Disadvantages Of Using a Short-Term Loan for Home Improvements

While short-term loans are a great option for home improvements, as they can help you continue your life, there are some factors to consider before taking one out. Short-term loans should not be used for any long-term ongoing debt that you are facing; taking one out for such a reason can lead to further financial difficulty. It is important to consider your financial circumstances before applying for one.


Author Maggie Clarke
Maggie Clarke Content Ops Lead
Maggie leads the content operations team at She is an expert on personal finance, by way of a lifetime of gathering practical knowledge on what to not do with your pocketbook. When not blogging about money, Maggie can be found rambling through the roughest terrains. She considers herself charming yet troublesome and would love to meet you someday, just not today.
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