Anyone who owns their own home knows that there are often jobs that involve quite high costs. Think of new windows or floors here. Since these costs can usually not be paid from the current budget, the owner thinks of a loan for house renovation. The owner can choose from several types of financing.
Whoever rents out rental apartments or houses is usually determined exactly how often a tenant has to renovate. Of course, these requirements do not apply to a homeowner. They can decide for themselves whether they want to wallpaper or lay new floors themselves or whether they should hire a company to do so. As a guide, it is assumed that the kitchen, bathroom and shower need to be renovated every three years. Living room and bedroom every five years.
Even the homeowner can adhere to these guidelines, because after all, the property should be repaired and thus also gain in value. Anyone who adheres to this can build up corresponding reserves or create a financial cushion with a home savings contract. But what is the right loan for a house renovation?
The renovation loan – the possibilities
The customer could opt for a renovation loan. This is nothing more than a dedicated installment loan. Not to be confused with consumer credit that is not tied to a specific purpose. The customer can proceed with him as he wishes. The loan for a house renovation is very much in vogue, also for energy-related measures on the property. This includes energy-saving windows and insulation systems. These measures also include new, energy-saving heating. If the owner decides to do this work, he can receive funding.
Before applying for a home renovation loan, the loan needs should be determined. This is done with cost estimates for the upcoming work. The owner can freely decide on the financing based on the offers. If the customer does not receive any funding from Best bank, for example, he can apply for a renovation or modernization loan from the bank. The funds from the development bank are available after the work has been carried out.
However, the funds must be applied for before the work is carried out. These loans are not processed through Best bank Bank, but through another bank. Many owners stay with the house bank, especially if the real estate financing of the home was made there. Then there is the possibility to take the renovation loan on the house loan. The rate can often remain as it is, especially if the loan amount is not too high. If the customer takes this financing into consideration, the house bank is of course the best contact.
Anyone who decides on the earmarked renovation loan must of course submit some documents to the bank. Think of cost estimates that the customer should get in advance. So he also has the loan amount in his sights. The banks basically want to see collateral when lending. With a normal installment loan, this is usually the sufficiently high income.
The property could serve as security for the renovation loan. Thus, the loan for a house renovation could be entered in the land register, advantageous if the borrower is the owner of the property and no longer has any debts on it. The bank therefore has security with the entry in the land register. However, if there is a constellation that the customer is not the sole owner and there are still debts, the bank does not have the necessary security. Then there is the possibility to name a second borrower or a guarantor.
The loan for home renovation – the installment loan
An installment loan, on the other hand, is not earmarked and can be used for everything. Here, the bank does not require precise information about the use of the loan. Anyone who decides on the installment loan should definitely carry out a loan comparison. Experience has shown that it is not the local banks and house banks that have the best conditions. Of course, the house bank has the advantage that you know each other and have been a customer for many years. The personal advice at the house bank should not be forgotten either. Herewith she makes up for any unfavorable conditions.
If you opt for an online loan, you don’t have to do without a personal interview. Other media are available here, such as telephone contact or email and chat. The usual bank opening times are available for questions. However, the online bank provides much better conditions. The customer should be careful with the interest rate shown, because the interest shown there is not relevant for every customer. The customer only finds out the interest rate that applies to him when he offers a personal loan.
The customer should know that the interest rate is based on creditworthiness. If the customer has a good one, he will also receive a favorable interest rate. Of course, online banks comprehensively check the customer’s creditworthiness. Especially when the loan amount for a house renovation is slightly higher. If a suitable provider was found, the loan application can be made directly. A corresponding form is prepared for this, which the customer only has to fill out and send to the bank.
If the preliminary check is positive, the borrower receives a preliminary loan decision. However, the final loan approval is only given when the bank has checked the necessary credit documents. If the documents such as pay slips, bank statements and a copy of the employment contract are compiled, the customer should ensure that the documents are complete. If a document has to be requested later, the loan approval is delayed.
What is important is the Postident, the personal identification based on the identity card that can be carried out at the post office. The certificate is then sent to the bank with the documents. The faster the documents are sent by post, the faster the loan approval will come.
The loan for a house renovation – alternatives
If the customer’s creditworthiness is weakened by negative entries in Credit Bureau, he can opt for a Credit Bureau-free loan from abroad. A prerequisite for this loan for a house renovation is a sufficiently high income and a permanent position, which should have existed for at least one year.
Many customers use the overdraft facility as a loan for a house renovation. Almost every bank customer has called the overdraft facility – in short, overdraft facility. Banks provide it to customers who have a regular income. Usually three net monthly salaries are granted. However, the overdraft facility is an expensive loan and should only be used if it can be repaid quickly.