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Home improvements have a reputation as time consuming, costly undertakings that are more hassle than happiness. However, with the plethora of financing options available today, these projects don’t have to be panic-inducing endeavors. Based on the timeframe for the project and repayments, and your unique credit situation, you have options for all types of projects. Below are just seven possible ways to finance home improvement projects. Look at the options and weigh the pros and cons against your project size and budget and get building today!
Low Interest Credit Cards
Depending on your credit and the size of your project, you may be able to open a line of credit with a low- or no-interest rate attached. If your credit score is above average, you are likely to find offers for small- to mid-sized maximums. Keep in mind that to protect your credit, it’s ideal to use around 30 percent of the available credit on a credit card. This option may not be the wisest decision if the project exceeds your credit option’s comfort zone (again, keep in mind the 30 percent usage rule of thumb). It is also less ideal than other options if your credit is not healthy, as the interest rates you may rack up could extend beyond the project’s true cost.
Home Equity Loans are basically a second mortgage. While these loans are pricey and often come with a package of fees and closing costs (just like primary mortgages), you receive the money all at once and will typically have a fixed interest rate.
Unlike personal or unsecured loans, Home Equity Lines of Credit loans typically have lower interest rates and are revolving open credit lines. Keep in mind, however, that the benefit of HELOC loans is a double-edged sword, as the loans are secured with your home – in other words, your home becomes in jeopardy if you were to default on the loan. These loans are ideal for larger projects or ongoing repairs, as the credit line functions more similarly to a credit card (where you can borrow money periodically) than a HEL.
Cash-Out First Mortgage Refinancing
This option of financing home improvements involves replacing your current mortgage with a brand new one, and through the refinancing, having access to some cash. Cash-out refinancing typically comes with a long payout plan and thus a longer period to pay the money back. Keep in mind that by refinancing with a cash-out option will increase your APR, potentially raise your closing costs and your mortgage amount will increase. Another added bonus to this scenario is if you can refinance for a lower mortgage rate than the one you currently have for your home.
Online Unsecured Loans
Fund your project through non-traditional means, like online lending. Online loans boast lower rates than are typically seen from banks for personal, unsecured loans. The benefit is the transparent, all-online application process. Unlike HELOC loans, these loans have no security tied to your house so their risk level is less worrisome.
Pay in cash and receive financial help the “old fashioned” way: If you can afford to pay in cash without any sweat, that’s preferable to accumulating debt. However, if you are interested in simultaneously building your credit and are in a financial situation where this is a feasible option, you may want to consider a small loan, which you pay off immediately with assets you already have access to. Depending on how long you have been preparing for this project and the expansiveness of the improvements, saving up ahead of time may be a savvy alternative to dipping into savings or opening a line of credit. It is important to assess your financial situation in its entirety: your credit, your income, your expenditure, your short- and long-term budgeting and what your future financial outlook may be down the road. If you are anticipating significant life events that may drain your savings beyond what you are used to, tackling a large home improvement project without the cash may be unwise.
The Bottom Line
Whatever your goals are, there are options to help you make your home improvement dreams come true without endangering your financial health. If you need help deciding on what option or options will meet your needs, talk with a financial planner or personal assistant.
Disclamer: The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the suitability of any Even Financial product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any information or statistical data sourced by Even Financial through hyperlinks, from third-party websites, are provided for informational purposes only. Although we promote products and services form our partners, our opinions are our own.
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Goldman Sachs-backed Even Financial, a digital matchmaker between banks and customers, just bought an insurance startup as life insurers are seeing policy applications boom
Even Financial has acquired LeapLife, a leading insurtech platform. The addition of LeapLife allows Even to immediately commence its insurance capabilities, aimed at simplifying and enhancing the way consumers search, compare, and get matched with insurance policies (LeapLife’s existing platform will continue to operate from leaplife.com). Business Insider wrote an article about it, interviewing our CEO and Founder Phill Rosen.
Even Financial Launches Insurance Offerings With Strategic Acquisition of LeapLife, a Leading Insurtech Platform
Pioneering B2B Fintech Expands its Industry-Leading Financial Services Monetization Platform to Help Insurance Carriers Find and Connect with Consumers New York, New York – April 22, 2020 – Even Financial (Even), the leading API for financial services search, acquisition, and monetization, announced today that it will be launching services for the insurance industry through the acquisition of LeapLife, an insurtech platform and digital life insurance agency. The addition of LeapLife allows Even to immediately commence its insurance capabilities, aimed at simplifying and enhancing the way consumers search, compare, and get matched with insurance policies (LeapLife’s existing platform will continue to operate from leaplife.com). Even and LeapLife now offer the only full end-to-end, multi-carrier digital life insurance marketplace experience. Over the coming weeks, Even will further integrate LeapLife’s technology and insurance offering into its industry-leading API, making turnkey insurance marketplaces programmatically available to a vast network of channel partners — when and where their consumers are most in need — while also enabling the company to expand to other insurance sectors, including homeowners, renters and auto insurance. This adds to Even’s peerless breadth of real-time, personalized financial product offers — an expansive suite that already includes loans, savings, credit cards, and more. “Even’s goal to evolve how financial institutions find and connect with consumers is not limited to loans or credit cards, but applicable to all financial products and services, including insurance,” said Phill Rosen, Even Founder and CEO. “Despite its importance, purchasing life insurance is often an overwhelming and inconvenient experience. With more than $600 billion in premiums paid each year, and only 6% of policies sold completely online, we see tremendous opportunities to help modernize the life insurance industry and offer solutions that solve challenges for consumers and carriers alike.” LeapLife is an established insurtech platform and digital life insurance agency that utilizes data science, deep underwriting knowledge, and proprietary technology, enabling consumers to apply for instant-decision life insurance policies with real-time quotes. LeapLife works with many best-in-class insurance carriers to offer consumers a seamless experience from beginning to end. This approach made Even and Leaplife a perfect match. As a digital insurance broker, LeapLife offers personalized life insurance recommendations based on a consumer’s unique needs. Paired with the Even API, which enables customer acquisition for insurance to be native and programmatic, consumers benefit from a more streamlined, transparent, and highly personalized experience when shopping for life insurance. Just as Even’s 2018 acquisition of Birch (the award-winning credit card rewards app) allowed the company to accelerate its expansion into credit cards, the addition of LeapLife will similarly put Even at the forefront of consumer insurance offerings. Charles Svirk of MassMutual Ventures, an investor in Even, said “The Even and LeapLife teams share a vision that the future of insurance acquisition will rely on the power of data-driven, programmatic distribution. We are thrilled to support them as their industry experience, impressive technology, and trusted relationships will help scale Even’s insurance offering and build partnerships to provide these critical innovations in insurance acquisition.” The Even API and platform solve significant, long-standing pain points in financial services acquisition by seamlessly connecting supply and demand. Even has continued its rapid growth trajectory in 2020, surpassing over $1.5 billion in credit issued through its API and expanding its platform to over 400 partners. Even has secured over $55 million in funding from major financial institutions, venture capital firms, and fintechs to back its goal to evolve the financial services acquisition ecosystem. About Even Financial Founded in 2015, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. By seamlessly bridging financial institutions (including American Express, Goldman Sachs, and SoFi) and channel partners (such as TransUnion and The Penny Hoarder) via its industry-leading API, Even turns any consumer touchpoint into an ROI-driven, fully customizable, programmatic acquisition source for financial product offers with full compliance, security, and scale across loans, savings, credit cards, insurance, and more. Even is backed by leading financial services firms and VCs including American Express Ventures, Canaan Partners, Citi Ventures, F-Prime Capital (Fidelity), Greatpoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Even is the leading search, comparison, and recommendation engine for financial services. Media Contact: firstname.lastname@example.org
Even CEO/Founder Phill Rosen quoted in Protocol Braintrust Newsletter
Our CEO and Founder Phillip Rosen was included in the most recent Protocol Braintrust newsletter along with answers from some thought leaders from Plaid, Slack, and DuckDuckGo!