4 Ways to Pay for an Emergency Home Repair

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In 2017, hurricanes ravaged parts of the U.S., destroying people’s homes and businesses. The storms caused over $200 billion in damage, according to National Geographic.

The rebuilding process can be slow and expensive, and it can eat up your savings. If you’re facing an emergency home repair, find out what you can do to pay for it.

4 ways to pay for an emergency home repair after a disaster

Home insurance can help in the case of an emergency, but not everyone has coverage. Plus, the policy you have might not cover you in all situations. That was the case for many people in Texas after Hurricane Harvey. Research firm CoreLogic estimated that 70% of those affected by Harvey didn’t have flood loss insurance, leaving them to bear the cost of repairs on their own.

Emergency assistance, such as grants from the Federal Emergency Management Agency (FEMA), can help cover the gap. However, not everyone impacted by a disaster qualifies for FEMA aid. If your home is in a county that’s outside the area declared a disaster zone by FEMA, you might not be eligible for assistance.

If your insurance coverage won’t cover the cost of your home repair and you don’t qualify for FEMA aid, here are four ways to pay for it instead.

1. Small Business Administration (SBA) loan

Although the SBA is known primarily for providing business owners with low-interest loans, it provides other forms of assistance, too. In some cases, the agency offers disaster loans to homeowners, business owners, and renters. If your primary residence was damaged, you could be eligible for a loan as high as $200,000 for repairs. SBA disaster loans also can be used to replace personal items that were damaged, such as clothing, furniture, and cars. You can borrow up to $40,000 for personal property needs.

Depending on how much you borrow, you might need to put up an asset as collateral. The rates for SBA disaster loans often are lower than the rates on other kinds of loans or credit. Plus, you can have a repayment term that’s as long as 30 years, helping make the repairs more affordable.

2. Title I Home and Property Improvement Loan

If the damage to your home and property isn’t extensive, a Title I Home and Property Improvement Loan can be a useful option. The Federal Housing Administration (FHA) insures these loans, lessening the risk to the lender. Because the FHA is willing to insure the loan, you sometimes can qualify for lower interest rates than you could get elsewhere.

For repairs on a single-family home, you can borrow up to $25,000. If you’re repairing a townhome or apartment, you can borrow up to $12,000. Depending on the type of home you have, your repayment term can be between 12 and 20 years.

Interest rates vary by location and lender. Not all lenders can offer such Title I loans. Only financial institutions approved by the U.S. Department of Housing and Urban Development (HUD) are allowed to offer the loans. You can use HUD’s locator tool to find an approved lender near you.

3. Home equity loan

Another option to consider is a home equity loan, where you borrow money from a bank or financial institution using the equity in your house as collateral. Your home equity is the difference between the current value of your property and the amount you owe on the mortgage. For example, if your home is worth $200,000 and you owe $180,000 on it, your home equity is $20,000.

You can borrow a percentage of your home equity to pay for necessary repairs. According to the Federal Trade Commission, the amount you can borrow usually is capped at 85% of your equity. That means if your equity is $20,000, you can take out a loan of up to $17,000.

Because you use your home as collateral, there’s some risk to taking out a home equity loan. If you fall behind on your payments, you could lose your home, so it’s important that you borrow as little as possible to make the repairs.

4. Unsecured personal loan

If you don’t qualify for other loans and can’t afford to pay for an emergency home repair on your own, you can take out an unsecured personal loan.

With a personal loan, you can borrow up to $100,000. You can use the money to make repairs, replace damaged items, or pay for hotel stays while your home is under construction.

Unlike some other kinds of loans, personal loans usually don’t require any collateral. That means you don’t have to put your home or another valuable asset at risk. If you fall behind on your payments, your credit report can be damaged, but the lender won’t be able to seize your house or assets.

However, keep in mind that personal loans can have higher interest rates than those on other home repair loans.

The lender will determine your interest rate based on your credit history and income. Depending on your credit, you could face a rate as high as 36.00% — and sometimes higher. The interest incurred could cause your total loan amount to grow over time. Use our personal loan calculator to find out how much you’ll have to repay under different interest rates.

If you decide this option is right for you, then it’s a good idea to compare offers from multiple personal loan lenders to get the best deal.

Rebuilding after a disaster

If you’re facing an emergency home repair, the cost can be staggering. However, there are several types of financing available to help you make repairs while staying within your budget.

If you need help with other expenses, such as food or transportation, check out these six charitable resources for assistance.

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Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

RATES (APR)loan amount
5.99% – 17.88%1 $5,000 to $100,000
5.69% – 35.99% $1,000 to $50,000
6.98% – 35.89%* $1,000 to $50,000
99.00% – 199.00%2 $500 to $4,000
5.99% – 24.99%3 $5,000 to $35,000
5.99% – 29.99%4 $7,500 to $40,000
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1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Fixed rates from 5.99% APR to 17.88% APR (with AutoPay). Variable rates from 6.49% APR to 14.70% APR (with AutoPay). SoFi rate ranges are current as of November 4, 2019 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.49% APR assumes current 1-month LIBOR rate of 1.81% plus 3.08% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.
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  3. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  4. If you lose your job through no fault of your own, you may apply for Unemployment Protection. SoFi will suspend your monthly SoFi loan payments and provide job placement assistance during your forbearance period. Interest will continue to accrue and will be added to your principal balance at the end of each forbearance period, to the extent permitted by applicable law. Benefits are offered in three month increments, and capped at 12 months, in aggregate, over the life of the loan. To be eligible for this assistance you must provide proof that you have applied for and are eligible for unemployment compensation, and you must actively work with our Career Advisory Group to look for new employment. If the loan is co-signed the unemployment protection applies where both the borrower and cosigner lose their job and meet conditions.
  5. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
2 Includes AutoPay discount. Important Disclosures for Opploans.

Opploans Disclosures

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Opploans currently operates in these states: . *Approval may take longer if additional verification documents are requested. Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications processed and approved before 7:30 p.m. ET Monday-Friday are typically funded the next business day.

  1. To qualify, a borrower must (i) be a U.S. citizen or permanent resident; (ii) reside in a state where OppLoans operates; (iii) have direct deposit; (iv) meet income requirements; (v) be 18 years of age (19 in Alabama); and, (vi) meet verification standards.
  2. NV Residents: The use of high-interest loans services should be used for short-term financial needs only and not as a long-term financial solution. Customers with credit difficulties should seek credit counseling before entering into any loan transaction.

  3. OppLoans performs no credit checks through the three major credit bureaus Experian, Equifax, or TransUnion. Applicants’ credit scores are provided by Clarity Services, Inc., a credit reporting agency.

  4. Based on customer service ratings on Google and Facebook. Testimonials reflect the individual’s opinion and may not be illustrative of all individual experiences with OppLoans. Check loan reviews.

  5.  

    Rates and terms vary by state.

3 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.
4 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 5.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 5.99% APR loan, a borrower will need excellent credit on a loan for an amount less than $12,000.00, and with a term equal to 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could help you also qualify for the lowest rate available.
* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by WebBank, Member FDIC.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

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