Maybe it’s an extra room, or an indoors bathroom. Maybe new ceilings or tiles for the floors. Whatever your home needs, a home improvement loan can help you get it.

There is a saying that a man’s home is his castle. But if that castle has become too small for his family, or has a roof that is leaking, then a man has to make a plan.

There are many reasons for home improvements. You might need extra space because a family member needs a place to stay. Or your teenage daughter needs her own room for privacy. For security reasons you may need burglar bars on your windows and a proper fence around your property. Now that you have bought a car, you want a garage to park it in. Or maybe your old kitchen really needs an upgrade.

Whatever the reason, you know the time has come to consider your options.

If you have a home loan in the form of an access bond, you can take money out of that facility to upgrade and improve your home. That is a low-interest loan option, because mortgages usually carry preferential interest rates as they are secured loans for which you have to provide collateral or security to the bank.

If you are not lucky enough to have an access bond-type mortgage, a personal loan is the way to go, especially if you have a strong and healthy credit profile that can get you good interest rates. Creditors like lending money to people with a positive credit record, as that lowers their risk.

Before you apply for a personal loan to do your home improvements, go through these five steps:

1. Get your family on board. It can be very inconvenient to have builders in and around your home, so all the people who live with you must be prepared. Also, get their inputs into your plans. You don’t want to make big (and expensive) changes halfway through because your spouse wants the door in a different place, or your daughter doesn’t like the paint colour. Furthermore, the extra money you will have to pay out on the loan instalment probably means that as a family you will have to give up some luxuries for a while.
2. Plan your home improvement project carefully and draw up a budget for it. You don’t want to borrow more than is necessary. Get prices from a number of different builders and building supply stores so that you know what is available and can compare apples with apples before you make a decision. As part of your research, get references from the builders you are considering: nothing hurts a home improvement project more than poor workmanship. You don’t want to keep on buying bricks and sand and tiles just because your builder makes a mess. If you have never done home improvements before, you can also learn from other homeowners’ experiences.
3. Understand your own financial position so that you know how much you can afford to borrow. Keep a monthly budget and track all your expenses for several months before you make your borrowing decision. Much as your house needs improvement, if your finances need fixing, you have to do that first. Taking on debt is not something to do lightly – you have to be sure that you can afford it.
4. Put in the hard work to do loan comparisons. Different companies offer different deals and personal loan interest rates. It is always worth the time and effort to understand what is on offer and to work out what deal will be the best for you. If you struggle to make sense of all the financial jargon, ask someone to help you.
5. Make sure you understand the full cost of the loan you take out. Ask the agent to explain all the fees and costs to you, including how the personal loan interest rate works. Never make a decision until you know exactly what the loan will cost you over the full repayment period.

Doing home improvements can be very exciting and it is easy to get caught up in a feeling that you want to get a loan now so that you can get started. Remember, however, that in most cases home improvements are not emergencies – take all the time you need to make the best decision about your project and your home improvement loan. That’s the best way to build you castle.