 TITLE: How Do Home Improvement Loans Work? CONTENT: What Is a Home Improvement Loan?\n--------------------------------\nA home improvement loan isn't a specific type of loan. Rather, it describes how you're going to use the funds. You could take out a home improvement loan to repair damage after a natural disaster, upgrade your plumbing or build an addition—just to name a few of the many possible projects.\nYou can use either secured or unsecured loans for home improvements. A secured loan, such as a home equity loan, home equity line of credit (HELOC) or cash-out refinance, requires collateral. In these cases, your home serves as collateral for the money you borrow, and the lender may be able to foreclose on your home if you can't repay the money.\nUnsecured loans don't require collateral and include personal loans and credit cards. While you don't have to put your assets at risk to take out an unsecured loan, they may be harder to qualify for or offer less favorable terms. END