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Is a Home Depot Project Loan Worth the Money? (How They Work and Other Details)

Home Depot Project Loan Review

When home renovation projects necessitate additional funding, the Home Depot Project Loan is a viable alternative to consider.

The Home Depot Project Loan is intended for homeowners who require a small amount of additional funds to complete a full scope of home modifications. Contractors are not eligible to apply; the program is only open to individuals who are completing the project on their own property.

Listed Below Is Everything You Need to Know About the Home Depot Loan:

Home Depot Project Loan Breakdown

The Home Depot Project Loan has stricter terms than a personal loan obtained from a bank or other financial institution. In a way, it functions similarly to a pre-loaded credit card, which can then be used to make purchases at Home Depot locations and through the company’s website. You will not be able to use the card at any other establishments.

Basic Information:

  • Buying window of 6 months
  • Interest-only payments
  • 84 months for repayment
  • Loans between $2,500 and $55,000
  • Rates as low as 7.99% APR
  • Purchases Restricted to Home Depot
  • No Annual Fees

Is a Home Depot Project Loan Worth the Money? (How They Work and Other Details)

If you compare the Home Depot loan to other personal loans given by financial institutions such as banks, lenders, and credit unions, which can also be used to cover the costs of repairs, the Home Depot loan is significantly more restrictive and significantly more expensive.

The only items and services you’ll be able to purchase will be from Home Depot, however, with other personal loans, you’ll be able to make purchases anywhere and utilize the funds any way you see appropriate. Aside from that, the interest rates on alternative personal loans can be much cheaper than those offered by Home Depot itself.

Aside from the low costs and flexible payback terms, there are other advantages to taking out a Home Depot Project Loan, including the following:

Interest-only Payments While You’re Out Spending Your Money

You will not be required to begin making full repayments until six months after you have taken out the loan, unless you default. This allows you to shop around without having to worry about making large monthly payments.
Fees are kept to a bare minimum. There are no application costs, and there are no prepayment penalties. This helps to keep the total cost of your loan lower, but bear in mind that if you don’t make timely payments, you may still be charged a late fee.
A co-applicant is permitted. Is it possible to split the cost of the project with someone else? Bring them on board to improve your chances of getting approved.

Is a Home Depot Project Loan Worth the Money? (How They Work and Other Details)

Credit That Is Reasonably Ok

To be qualified for a Home Depot Project Loan, you simply need to have a personal credit score of 600 points. And with such a low annual percentage rate, you’ll find it difficult to get a better deal with other lenders.

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Is it difficult for you to decide if a Home Depot Project Loan is the best option for you? Take a look at these potential drawbacks:
Purchases at Home Depot are excluded. If you want to make substantial purchases from other retailers in order to complete your home renovation project, a Project Loan may not be the best option.
The long term is always the default. If you don’t make additional loan payments on a $55,000 loan, you might end up paying over $17,000 in interest over the course of the loan’s seven-year repayment period.

Only Six Months’ Worth of Expenses

You’ll only be able to use your loan for six months during the draw period. If you have a larger project that could take several months to complete, a Project Loan may not be the best option.
It’s hardly surprising that there isn’t much information available online concerning the Home Depot Project Loan, given how tailored it is to a specific type of consumer. There have been a few complaints on Reddit about the interest rate being too high. But they were referring to a 14 percent annual percentage rate rather than the existing 7.99 percent annual percentage rate. Another informed consumers that if they took up the Project Loan, they would only be able to engage with contractors who had been vetted by Home Depot.

Is a Home Depot Project Loan Worth the Money? (How They Work and Other Details)

Benefits of the Home Depot Loan

The Home Depot Loan may be a viable option if you’ve already attempted to obtain a loan through different means; nevertheless, you must ensure that the conditions and interest rate are appropriate for your situation. The credit is beneficial for individuals who expect to be able to obtain financing in order to pay off the loan considerably more quickly than the full 84-month repayment period.

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In addition, if you know that you will be purchasing all of your project materials from Home Depot, this is a useful tool. It makes transactions quick and simple, and there is no need to transfer money from one account to another because the loan credit card provides access to all of the funds on the same account.

Is a Home Depot Project Loan Worth the Money? (How They Work and Other Details)

Downsides of the Home Depot Loan

The disadvantages of taking out a Home Depot Project Loan are self-evident. Its financial products have a significantly high-interest rate as well as terms that are not adjustable. For their highest loan of $55,000, if you pay it off over the course of 84 months, you will have paid approximately $17,000 in interest.

You will not be penalized if you make payments ahead of schedule, but you will not be able to extend the payback period beyond the initial 84 months. If you are unable to complete the task, there are consequences for deviating from the initial terms of the agreement.

In some cases, depending on your credit score, you may be able to obtain lower interest rates with alternative lenders. Lines of credit and secured loans also have lower interest rates than unsecured loans, assuming that your credit is decent to excellent.

Is a Home Depot Project Loan Worth the Money? (How They Work and Other Details)

A Fixed Rate That’s Lower Than Home Depot’s Credit Card

Depending on your creditworthiness, a Home Depot project loan could have a fixed interest rate that is much lower than the lowest rate available on the Home Depot® Consumer Credit Card.

Furthermore, unlike a home equity loan or a home equity line of credit, you will not be required to put up any type of collateral when applying.

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Is a Home Depot Project Loan Worth the Money? (How They Work and Other Details)

 

There’s a Six-month Purchase Period

One disadvantage of the Home Depot project loan is that you may only use it to make purchases during the first six months of the loan’s term. The first day begins on the day of your approval.

If you have a credit card, you can continue to make purchases as long as you haven’t reached the maximum of your available credit.

Which is a Home Depot project loan good for?

Considering a Home Depot project loan for a big sum of money at a competitive fixed rate may be worthwhile if you need to fund a home renovation project in the near future. Especially if you were already planning to purchase all of your materials and installation services from Home Depot, this could be an excellent alternative.

Nonetheless, you’ll want to be certain that you can complete all of your purchases within the six-month time frame set by Home Depot.

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Is the Home Depot Card Worth It?

The Home Depot credit card does not provide any cashback or other rewards in exchange for use of the card. It does, however, offer zero-interest for the first six months on purchases of $299 or more. There are also limited-time specials available, such as initial statement credits and promotion discounts for specific products.

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