As you’re planning out your roof repair or replacement project, you’re probably wondering how you should finance it. It’s easy if you already have the cash on hand, but if not, there are numerous options available that can help you finance your project. Such options include government grants, personal loans and even strict budgeting.
But with all the financial options available to you, you need to understand how each option offers different terms, interest rates, fees and repayment periods. This helps in making an informed decision, allowing you to properly weigh the benefits and drawbacks of each option available to you. It’s also important to choose a trusted contractor that can provide you with best financing option for your roofing project.
Southern Roofing Company knows that choosing the right option can be a bit overwhelming especially since there are many financing options available. That’s why we’ve explained some of the key terms to consider here, helping you determine the best choice for your roof repair and replacement project.
In each financing option, here’s what you need to consider:
This is one of the most important aspects when it comes to comparing financing options. Loans require that you pay back the borrowed amount as well as interest that accrues over time, with your interest rate determining how much you’ll pay based on the original amount borrowed. Your interest rate will be influenced by several factors, including your credit score, bank and financial profile. If you have a stable source of income and a good credit score, you’ll likely get a lower interest rate.
You’ll also likely have a different interest rate based on your chosen loan method. Small personal loans through a national bank usually have a different interest rate than those from credit unions. You can always get lenders to do a soft credit check (which shouldn’t impact your credit) to quote you rates. Afterwards, you can compare interest rates before deciding which lender you’ll go with.
In financing, this refers to how long your loan will last for. A longer term means you’ll pay more interest over the course of the loan, but you’ll likely have smaller monthly payments. For instance, if you’re planning to replace your asphalt shingles and want to repay the loan you used as quickly as possible, you’ll want a shorter term and higher monthly payments.
Keep in mind that credit cards, while another version of financing, don’t have a set term because they’re a different kind of debt known as revolving debt. You may get confused sometimes because you could be making the minimum monthly payments on your credit card but never get out of debt, whereas if you make the payments on your loan each month, you’ll have repaid it at the end of the term.
Type of Debt
Although the term “debt” is often used as a blanket term for owing money, the specific type of debt makes a difference in the long run. If you decide to go into debt in order to finance your roofing project, carefully consider the type of debt and how it will make an impact on your financial freedom. Some of the most common types of debt include:
- Installment Debt – This is a loan that’s repaid in monthly installments, including interest. Interest rates are determined by factors including the amount issued, total number of payments and the duration of the repayment period.
- Revolving Debt – Credit card companies usually offer this option as a quick and easy way to get money. The debtor is issued a credit card with a set limit based on their financial profile and can borrow more as they repay.
When financing your shingle and metal roofing project, you’ll usually find numbers hidden in the fine print of the offers, including different kinds of fees. While some can be avoided by adhering to the terms of the agreement, others are required regardless.
Remember: Fees can add up, so make sure you check to get the needed information before moving forward with a loan. Here are some fees you might encounter when financing your roofing project:
- Late Payment Fee – These are issued when a monthly or annual payment on your loan is late. Some lenders will have a grace period if you’re having a tight month, while other lenders give you an option to change your monthly payment date.
- Origination Fee – You’ll need this fee for taking out a loan, and it’s usually paid at the beginning of the transaction. Origination fees are almost always a one-time payment set by the lending institution. Make sure you ask your lender if this is something they charge, as not all lenders have origination fees.
- Early Repayment Fee – Paying off the loan on your shingle and metal roofing project before the end of the term could mean paying this type of fee. When you’re applying for a loan, make sure you understand the length of your repayment period and ask whether you’ll be charged for paying off the loan before that time.
This another important aspect you’ll need to compare when considering financing options; you’ll need financing that offers monthly payments you can afford. See if you can make do with longer terms and lower monthly payments to find a monthly payment that fits into your current budget. Using your credit cards might be more enticing especially if it has a low minimum payment each month, that doesn’t necessarily mean you’ll be paying the principal but probably just the interest instead.
Some lenders may offer extra benefits that could make the difference if you’re not sure on who to go with. Some of these could be a discount for signing up for auto-pay, credit cards offering cash back or travel rewards or even an interest rate discount!
Ready to plan your roofing project? When you’re looking for a trusted contractor in metal roofing or asphalt shingles, you can count on our team at Southern Roofing Company to get the job done. Call us today at (470) 619-4360 or fill out our convenient form online to get started!