Is a personal loan a good idea for a home reno this summer?

With the silly season well and truly here, summer BBQs and drinks on the patio could be the perfect reason to finish your backyard renos. 

For example, retiling your entertainment area, adding a pergola or even looking at new decking can add some extra oomph to your home this summer. 

These small but mighty renovations could help spruce up the place for your guests, but also be done in time to enjoy them all summer long. 

The question is, how should you pay for these renos? The extent of your renovation will matter here. 

The cost of a summer reno depends on which areas you want to tackle. However, the general price range of a backyard renovation is $2,000 - $10,000, according to home loan improvement hiring site Hipages.

But this price range can jump if you focus on a more detailed job such as decking. The average cost of a new deck clocks in at $14,360, based on calculations from House Beautiful. Additionally, deck repair can cost up to about $1,800, based on numbers on Airtasker’s site.

Unless you have a beefed up savings account or a generous relative, it could be tough to pay for these projects, either way.

A personal loan could be an option to help you cover your renovation costs, with some loans offering a cash boost option for as low as $2,000 for those smaller house touch ups. 

However, if you were looking to improve your summer entertainment area, be it with a deck, tiles or an outdoor kitchen and BBQ, a personal loan could help make a hefty cost more manageable. 

For example, if you borrowed $14,000 from a lender with an average interest rate for December which is roughly 10% p.a., your monthly repayments would be around $456, for a shorter term commitment of 3 years. 

It’s worth noting that personal late interest rates vary, so always be sure to start with some research. For a quick reference, these are the current rate averages in the Mozo database:

• Average interest rate for unsecured loan: 10.59%
• Average interest rate for secured loan (requiring a personal asset against the loan): 9.25%

Going slightly bigger, say remodelling a kitchen, can truly see your budget balloon. And let’s face it, kitchens are usually integral to summer entertainment. But some kitchen renos can cost as much as $20,000, going up to $50,000 even, as per the Sydney Home Centre site.  

This means you’ll need to find a personal loan that provides a much larger maximum amount. Not all loans - nor the costs - are equal! 

If you have your own renovation costs in mind, our personal loan repayments calculator can help you visualise what getting a loan would look like for your budget. 

Basically, you’ll need an estimate for how much your reno will cost you, an idea of how long the project will take and a sense of whether or not you can afford to make repayments over several years, in most cases.

You can also get started on your personal loan renovation journey by checking out our editor’s picks for best personal loans - or compare personal loan providers down below.