Can I use a payday loan to pay for home improvements?

From burst pipes to broken boilers, emergency home repairs are one of the most common uses for payday loans. And if you don’t have a substantial savings pot to use, you might be wondering: Are payday loans a practical solution? What’s the best way to secure the funds? And are there any alternative funding options?

In this guide, we look at how to finance home improvements, including how to finance home improvements on your mortgage. We also explore how loans could help provide a solution when used responsibly, alongside savings, credit cards, and grants.

In this guide: 

• When is a payday loan suitable for home improvements? 
• How to pay for home improvements  
• Funding home improvements responsibly 
• Why choose Moneyboat? 

When is a payday loan suitable for home improvements?

Whether you’re looking to repair a leaking roof or improve your home’s energy efficiency, home improvement projects can be expensive. Using a loan can help you get an urgent issue sorted without delay, tiding you over until your next payday.

However, payday loans aren’t usually recommended for larger or planned renovations, such as kitchen overhauls or extensions, as the costs are typically higher and the work takes longer to complete.

If you decide that a payday loan is appropriate for your project, make sure you understand the interest and fees, and only ever borrow what you need. It’s also essential that you’re confident you’ll be able to meet the repayment deadlines to avoid missed payments and fees.

How to pay for home improvements

There are several other ways to fund home repairs and improvements. Choosing the right option for you will depend on the type and scale of your project, your financial situation, and how quickly you need the work completed:

1. Savings and personal funds

For non-essential home improvements, like small-scale renovations, one of the best approaches is to use personal savings. If you don’t have existing home equity, using your savings to finance home improvements means you won’t need to pay interest or take on any additional debt.

To start building a savings pot, you’ll need to review your monthly income and expenses to identify areas where you can cut back. This might involve things like cancelling subscriptions you no longer use or dining in instead of out. Adding a small amount each month into a dedicated home improvement fund can add up over time, giving you a pot to dip into when you need it.

Looking for more tips on saving and budgeting? Explore our guides on budgeting made simple or how much can I save in a year? 

2. Credit cards

For smaller projects, a credit card with a 0% introductory rate might be a useful way to spread the costs. However, as with all credit, careful use is key. Remember, once the introductory rate expires, interest rates can rise, potentially making your project more expensive in the long run.

So, if you go down this route, check the terms carefully and make sure you can repay the balance before the interest-free period ends.

3. Grants and local schemes

Depending on your area and circumstances, you might be eligible for grants or government assistance to help with home improvements. Some local authorities offer funding for essential home repairs, energy efficiency improvements, or adaptations for disability access:

• Energy efficiency grants: The Great British Insulation Scheme helps with energy-saving improvements, and the ECO4 scheme helps with insulation for homeowners on certain benefits.
• Disabled Facilities Grant: This is a grant from your local council which can be used to make essential changes to your home, such as installing a chair lift or widening your doorways.

Each scheme has its own eligibility criteria and application process, so it’s worth checking your local council or government website to see what’s available.

4. Financing on your mortgage

If you’re planning a bigger renovation, you could also explore options through your mortgage provider. For instance, if you have enough equity in your home, you might be able to remortgage for a larger amount or take out a further advance.

However, increasing your mortgage means that you’re taking on more debt overall, which can cost more in interest over time. Your monthly payments may also rise, so it’s important to understand both the short-term and long-term advantages, costs and considerations.

Funding home improvements responsibly

Home improvements can boost your comfort and safety while adding value to your home, but it’s important to fund them wisely.

When used responsibly, payday loans can help provide access to quick cash, helping you cover the costs of home repairs until your cash flow improves. However, these loans are best suited to urgent, short-term expenses, rather than larger planned projects, so it’s important to explore payday loan alternatives too.

Before you borrow, ask yourself questions such as:

• Is this repair urgent or can it wait until I’ve saved more?
• Have I explored a variety of funding options?
• Do I know exactly how much I need to borrow, and for how long?
• Have I checked my budget to make sure repayments are affordable?

Why choose Moneyboat?

Here at Moneyboat, we offer fair and flexible short-term loans designed to help you cover a range of unexpected costs, from surprise bills to emergency appliance repair loans. New customers can borrow between £200 to £800, and returning customers can borrow up to £1,500.

We’re also regulated by the Financial Conduct Authority (FCA). As a responsible lender, this means we carry out thorough credit and affordability checks to ensure borrowing is manageable. If you’re accepted, you’ll then repay your loan over two to six months, with the option to repay early with no additional fees.

We’re committed to transparent lending that helps you stay in control of your finances.

Explore more helpful resources

On the lookout for more helpful advice on managing your finances? Just head over to the Moneyboat blog. There you can read guides on repairing or replacing home appliances with a payday loan or learn more about applying for a payday loans with bad credit.

And don’t forget, if you’re unsure about your next steps or are looking for advice, there are various free and independent support organisations you can contact. From government-backed resources like MoneyHelper to charities like StepChange, there’s a range of help available.