Even the most beautiful home or house is getting old and needs renovation. Regular maintenance and renovation of a house or apartment is also part of maintaining the value of a property. Anyone who has not built up reserves for whatever reason needs a loan for renovation work.
In this case, the loan amount can vary. The reasons are to be found in the work. For example, if you need a new roof, you have to apply for more credit than someone who wants to give your living space a different picture. This raises the question of which loan is the most suitable to cover the renovation costs. A building loan, for example, is only relevant if the credit line is around $ 50,000 and is therefore a mortgage-backed loan. If the loan for renovation costs is smaller, many banks charge high interest rates. In addition, the effort to register the land charge is too high with a low credit volume. However, there are a few options available for renovation work, provided the creditworthiness is good.
There are several options for a loan for renovation costs
The classic installment loan is also suitable for renovation work, especially if the loan amount is small. At the bank, it doesn’t matter what the money is ultimately used for. For the bank, only the repayment of the loan for renovation costs is important. Small installment loans are available from 500 USD, the maximum loan amount is approximately 50,000 USD. It is necessary and should be considered that a loan of 50,000 USD over a term of 84 months represents a major financial burden for the borrower. For these higher sums, mortgage loans granted by the banks are suitable.
However, there must be collateral, which is normally not the case with an installment loan if the creditworthiness is good. In this case, you should evaluate positively if a land charge has already been entered in the land register, but has already been repaid but not yet deleted. This mortgage can then be used again to obtain a cheap loan for renovation costs. If the land charge is valuable, you can save a few percent on the interest rate.
Alternatives to installment loans
An alternative to the mostly expensive installment loans is a loan from a building society. In many cases it is not even necessary to have a contract with the building society. A combination of an advance loan and a building society contract gives building societies a renovation loan of up to 30,000 USD. There is no need to register a land charge because the loan is adjusted entirely to income. The effect is that low interest rates can be used and the costs for registration in the land register are eliminated.
If so-called energy renovations are necessary, e.g. a new heating system, a Lite Lender loan may be applied for. The conditions are very favorable, since subsidies are provided by the public sector. Of course, good credit is a prerequisite for all forms of credit. That means the borrower has a regular income and no negative Credit Bureau.