Home Improvement Loan

Home Improvement loan is the another bad loan. Its nothing but the another trap to give you a Bad Debt.

Definition: Home Improvement Loan -

- Home Improvement Loan (HIL) is a Home Mortgage to finance permanent improvements for energy conservation, solar installation, rehabilitation, modernization or addition.

- A home improvement loan is (a) any dwelling-secured loan to be used, at least in part, for repairing, rehabilitating, remodeling, or improving.

- An advance of funds, usually not secured by a mortgage and usually short-term, made to a property owner for such improvements as maintenance.

- A loan made for the purposes of making improvements to a property.

Explanation -

Home Improvement Loan is also known as HIL. HIL may or may not be secured by a Mortgage (Your Property). It really depends in the country you live and your credit report.

Some Banks give you Home Improvement Loans without asking for you a Mortgage while some will ask for a Mortgage.

According to Finance Gurus, This is a Bad Loan. Because after taking this loan and improving your home you are not going to increase the value of your property. They argue that, if you want to improve your home than why not save first and than spend rather than taking a loan today and paying it with interests tomorrow?

Some people excuse themselves that, Because Home improvement loan gives the Tax Breaks. But this is not the reason to take a HIL. Any Loan which does not produce an Asset at the end is not the Good Loan but the Bad Loan.