Disasters like fires and floods can leave homes in shambles. The latest earthquakes made many people scramble to find materials to repair and renovate their homes. But without a solid financial plan, costs can spiral out of control.
Krungsri Consumer, a credit card and personal loan provider, has some advice to ease your worries. They’ve put together 5 straightforward steps to manage home renovation expenses.
First, assess the damage. Bring in experts like engineers to inspect your home and identify what needs fixing. This includes the structure, electrical and plumbing systems, walls, and floors. Then, prioritize the repairs. Focus on safety-first projects, followed by essential work that affects daily life. Cosmetic touch-ups can come later, depending on your budget.
Next, set a budget. Research and compare prices from at least two contractors or suppliers. Factor in a 10-20% emergency fund for unexpected expenses or changes during the renovation process.
Now, secure funding. Many people use savings or income set aside for this purpose. If you need a large sum, consider a loan from a financial institution. Choose a suitable loan, like a home renovation loan, and prepare the necessary documents, such as a renovation budget and proof of income.
Some loans have easy application processes. Plan your repayment so it doesn’t exceed 20% of your monthly income. Compare loan terms from multiple banks to minimize interest charges.
If your home was damaged by natural disasters like floods or earthquakes, check your home insurance policy to see if it covers the damage.
When hiring a contractor, create a clear contract that outlines the scope of work, payment terms, and conditions for changes or cancellations. Prioritize urgent tasks, like structural repairs, followed by essential work like electrical and plumbing systems, and finally, cosmetic touch-ups.
Use credit cards and personal loans wisely. Some credit cards offer discounts, promotions, or rewards that can help with home expenses. For example, the HomePro Visa Platinum card offers a 3% discount on home-related purchases at HomePro stores, while the HomePro First Choice card provides 0% interest installment plans for up to 24 months.
However, use credit cards and personal loans with caution. Only spend what you can afford to repay in full to avoid high interest charges. Missed payments can lead to 16% annual interest on credit cards and 25% on personal loans.