Landscaping projects can be costly endeavors. Ranging from small gardening projects, to full yard makeovers, the costs associated leave people wondering what the best way to pay for a landscaping project is.
Depending on the scope of the project, and each person’s financial situation, there are a range of different ways to pay for a landscaping project.
See some of the different ways you can pay for and finance your landscaping projects below:
Cash is always going to be the best way to pay for a project if you want to avoid paying interest. However, it is important to consider your financial situation when deciding if depleting your cash reserves is a wise move.
It is also important to consider the net gain/loss from using your own funds which may be invested wisely. If one can secure a low interest rate loan, it may actually be more beneficial than using funds which are invested and creating good returns.
Unsecured loans (Personal Loans)
Unsecured loans for landscaping can be a great way to get funds quickly and easily for your project. With regard to speed, this is probably the fastest way to acquire funds for a landscaping project. This type of landscaping loan can be taken out with some lenders in as short as one business day if all requirements are met.
This type of landscape loan is also probably the easiest to take out. Because it is unsecured, their is no need for appraisals, or lengthy lien and paperwork processes. However, since there is no collateral, generally in order to obtain the best rates an applicant will want to have a great credit history, a low debt-to-income ratio, and have steady and ample income for the amount they are requesting.
Another benefit of unsecured loans, is that you can pre-qualify, and check your interest rates without affecting your credit. See what you qualify for, and check your rates here.
Credit Cards can be another good way to pay for your landscaping project. The biggest factors to consider when deciding if a credit card is the right fit for you are: your credit, interest rates, your ability to pay down debt in a shorter time period (12-18 months), and whether you are responsible enough to pay off your debt in a timely manner when full monthly payments aren’t mandatory.
Generally, credit cards are best used for smaller projects, where the balance can be paid off during the 0% period. As project costs become larger, loans are usually the preferred method of financing which can have lower interest rates, longer payment terms, and lower monthly payments.
Home equity line of credit (HELOC)
Home equity lines of credit can be a good way to finance projects at a relatively low interest rate, and can be especially ideal in situations where project costs will be accrued at various times. This could be an ideal option for someone who has to pay different contractors at different times, or wants the flexibility to draw money out as they need it during a project instead of all at once in a lump sum like a traditional loan.
There are however, a few drawbacks of using this method to finance your landscaping project. The first drawback for some people is that it requires home equity. For a homeowner who has lived at their residence for a while, or who has seen appreciation in the value of their home, they may have ample home equity and this may not be a problem. For a new homebuyer, or someone who needs more money than the available equity they have in their home, this option will not work for them.
The second drawback that is can be a time consuming and undesirable process to initiate the home equity line of credit. Typical processes require an appraisal of your home, in depth verification of documents, lengthy paperwork, and sometimes a requirement to make a visit to the bank for loan document signing.
Lastly, you’ll want to understand that most HELOC’s include various fees and closing costs that can add to the total costs of borrowing funds.
Home equity loan (HEL)
Using a home equity loan to finance your landscaping project, carries many of the benefits and drawbacks as a home equity line of credit. The biggest difference between the two is that a home equity loan is a “closed end” product, which gives the borrower a defined lump sum of funds, which is amortized evenly over a given time frame. This product can carry relatively low interest rates but are usually reserved for those with good to excellent credit, and ample home equity.
Have other ideas on how to pay for landscaping projects? Let us know in the comments!