You plan to construct another garage. The price usually falls between £5,000 and £25,000. This is not much money that a majority of homeowners save. This is solved by finance, which distributes the cost as small monthly payments.
There are numerous financial alternatives. Some lenders will give you the loan within 24 hours, and you can begin. There are alternatives that are more expensive to use but have a reduced rate of interest. The decision you take ought to be suitable for your case.
Finance Options for Building an Extra Garage
Unsecured Home Improvement Loans
You can borrow between £1,000 and £35,000, and you never put your house up as security at any point. The direct lenders will give you a full formal decision within 48 hours, and the money will land in your account the same day you accept.
You can repay over anywhere between 1 and 7 years, and if the worst happens and you cannot keep up payments, your home is never at any risk. This is the best choice for single garages, lean tos and any project under £12,000. If your score is not as high as you would like, you can also apply for bad credit home improvement loans in the UK. The providers will let you check your rate with no mark left on your credit file.
- You can borrow the exact penny of your quote
- You can overpay any amount at any time with zero additional fees
- Your monthly payment is fixed and will never go up for the entire length of the loan
- You will never be asked to prove what you spend the money on
Secured Homeowner Loans
If you want a double detached garage, a workshop with power, or something you will use every day for decades, this option will be better. You borrow against the equity you already own in your home, so lenders view this as very low risk.
You can borrow from £10,000 right up to £250,000 and more if you have enough equity. You can spread repayments over 5 to 30 years to get a monthly payment. Your home is at risk if you miss payments, so you should only take this if you are confident you can keep up.
The full process takes 2 to 4 weeks from start to finish. If you only need a small top-up partway through the build, you can also get a small short-term loan from a direct lender. This can help you cover unexpected costs without rearranging your full agreement.
- Most lenders will let you borrow up to 85% of the unused equity in your property
- You can lock in a fixed rate for the full term of the loan
- Applications are accepted even if you have had credit issues in the past
- Any leftover money is yours to use for anything else you want
Remortgaging to Release Equity
You move your existing mortgage to a new deal and add an extra lump sum on top at the same very low interest rate. The rates are between 4% and 6% APR.
You can spread the extra amount you borrow over the full remaining term of your mortgage. You can get a low monthly payment even for very large builds. This is almost always the best option if you are spending more than £15,000 on your garage.
You may have to pay early repayment charges to leave your current mortgage, and you will need to pay for a new valuation and legal fees. The full process takes between 4 and 8 weeks to complete.
- You can often avoid almost all fees if you remortgage with your existing lender
- This works out thousands cheaper than any other option for builds over £20,000
- You can lock in a fixed rate for up to 10 years
- You will not have any separate monthly payment to make
0% Purchase Credit Cards
Most major providers offer 0% interest periods between 18 and 28 months, with limits usually sitting between £3,000 and £15,000. If you pay off the full balance before the 0% period ends, you will not pay a single penny extra. This is perfect for paying for materials, tradesman deposits, and even the full build if it comes in under the limit.
Once the initial period is nearly over, you can also balance transfer the full amount to another 0% card to extend the period even further. The most consistent and reliable providers. This is only a good option if you have excellent credit, and you are certain you will clear the balance before the promo ends.
- You can check eligibility for almost all cards with no impact on your credit score
- Almost all small builders will accept card payment with no extra charge
- You get full statutory purchase protection on every payment you make
- You can pay off as much or as little as you want each month
Builder Finance Schemes
Most specialist garage build companies offer their own in-house finance. You can arrange it at the exact same time you get your quote. Most of these schemes also include free insurance on the build for the full term of the finance.
You should always compare the total amount you will repay against a high street loan before you accept. These schemes will require a 10% deposit up front.
- The lender will pay the builder directly at each stage of the build
- Most come with a no-payment guarantee if the build is delayed
- You can settle the loan early at any point with no extra charges
- You only make one single monthly payment for everything
Second Charge Mortgages
A second charge mortgage is an extra loan secured against your home that sits completely separate from your existing mortgage.
You do not have to remortgage, and you will not lose that very low fixed rate you locked in three or four years ago. This is the best option if your current mortgage has huge early repayment charges. This would make remortgaging completely uneconomical.
You can borrow between £10,000 and £250,000, and the full process completes in 3 to 4 weeks. You make one separate monthly payment for the second charge, on top of your normal mortgage payment.
- You can usually borrow up to 75% of the total current value of your home
- Most lenders will accept applications from people with fair credit
- You can fix your rate for up to 7 years
- There are no restrictions on what you can spend the money on
Conclusion
You are now aware of the key financial alternatives to constructing a garage. You check your credit rating, and then apply because this influences the rates you receive. In case you have a home, take secured loans or remortgage under lower rates, but do not forget about the dangers.
Make comparisons of total costs, not only on monthly payments. Look through the terms, particularly regarding charges and early repayment. Select the one that suits your budget and time.
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