Lenders use certain qualifying criteria when determining eligibility for a fast, low interest home improvement loan. This can include anything from credit history to employment stability, to the purpose or the loan, or a combination of everything. The only way to find out what qualifications you must have is to do some research into the policies of different lending institutions in order to find one that matches your requirements and can meet your needs.
Credit history
Like all loans, credit history is an important factor in a low interest home improvement loan. One thing to keep in mind is that what is low interest to some may not be to others because negative items on your credit report will definitely affect your qualifications for a low interest home improvement loan. The translation to that meaning the lowest interest home improvement loan available for your circumstances.
If you are in that situation, you may need to do some additional research in order to find an interest rate that will allow you to make the payments that are within your budget without too much of a struggle. After all, you don't want to damage your credit again; you want to use this loan in order to help rebuild your credit while paying for home improvements at the same time.
Employment history
In addition to credit history, your employment history will also have an effect on your low interest home improvement loan. Although the two of these are taken into consideration as an entirety, certain factors concerning either one may be viewed separately such as credit history. In other words, do you have bad credit because you lost your job and were unemployed for awhile?
If your bad credit is a result of being unemployed, the two factors may be looked at as an entirety, but if you have bad credit and job stability, the lender may question your overall financial stability. He may feel he is dealing with someone who just doesn't see the importance of paying his bills on time and no matter how much collateral you pledge, lenders will not loan money to someone they are reasonably sure isn't going to pay.
Effect of collateral
For a low interest home improvement loan, the collateral must be equal to the amount of the loan, but that does not mean that everyone will be approved. Banks do not like to foreclose or repossess in order to obtain their money, and as such, they are not going to loan money to someone they do not feel is going to repay the loan.
There is a fine line between having credit issues that are temporary, and being the kind of person who simply doesn't have the desire to pay his bills on time, or at all as the case may be. For most people, not paying their bills is the result of a lack of income during a financial crisis, but the lender will separate those from the ones whom he feels will not make the effort to pay, even if it means losing his home in the process.
If you have questionable credit, you must convince the lender that your past problems are finished and that you intend to pay for your low interest home improvement loan every month on time.