4 Ways to Pay for an Emergency Home Repair

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. 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 understand what you are buying, and consult 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. Please do your homework and let us know if you have any questions or concerns.

woman's hands making home repair

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.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal LoansFixed rates from 6.199% APR to 15.365% APR (with AutoPay). Variable rates from 6.145% APR to 14.685% APR (with AutoPay). SoFi rate ranges are current as of June 15, 2018 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 6.145% APR assumes current 1-month LIBOR rate of 1.97% plus 4.175% 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. 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 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.73% – 29.99%$1,000 - $50,000
Check rate nowon SLH's secure site
6.15% – 15.37%1$5,000 - $100,000
Check rate nowon SLH's secure site
6.87% – 35.97%*$1,000 - $50,000Visit Upgrade
8.00% – 25.00%$5,000 - $35,000
Check rate nowon SLH's secure site
4.99% – 29.99%$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%2$5,000 - $50,000Visit Citizens
15.49% – 34.49%$2,000 - $25,000Visit LendingPoint
5.99% – 35.89%$1,000 - $40,000Visit LendingClub
5.49% – 18.24%$5,000 - $75,000Visit Earnest
9.95% – 35.99%$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. 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 understand what you are buying, and consult 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. Please do your homework and let us know if you have any questions or concerns.