More Americans Insert Credit for Upgrades

Credit cards were the most affordable of the five financing options (credit: Credit.com).

HOUSTON—With Houstonians needing to make nearly $51,000 to afford a home valued at $142,000, it is likely that many of these homeowners are part of the great majority of Americans plunking down credit cards, payday loans, peer-to-peer lending, and even personal loans through friends and family to pay for home improvements. In fact, during the past 12 months, 5.41 million Americans borrowed an estimated $16.16 billion for home improvements, with the average loan amount being $2,990, according to Finder.

The majority (46.3%) are inserting plastic to pick up the home improvement tab, followed by personal loans (25.9%), borrowing from friends and family (16.7%), peer-to-peer lending (7.4%) and short-term loans (3.7%). In addition to the survey, Finder analyzed which of the five financing options might be more affordable at the end of the day, revealing that credit cards were the most affordable of the five financing options, with total interest paid during the life of the loan being $297.27 at an average interest rate of 18.62%.