Making home renovations is one of the highest expenses you can face. Sometimes the reforms are carried out at home because the house has many years, and of course you have to update the kitchen or bathroom to make them more modern.
The reforms of the home are not cheap, you will need a lot of money and the problem is that the construction companies and housing reforms do not usually provide many payment facilities, so it is very normal to apply for loans for home renovations in external financing.
How to apply for home improvement loans?
Keep in mind that when working with individuals in the case of home renovations, they do not usually have collection guarantees so you will probably have to anticipate money even if it is for the purchase of construction materials. Another type of home renovation is when you buy a second-hand home and you have to carry out works to be able to move in.
In this case the cost of the work can sometimes be financed with the mortgage loan itself, if the value of the home is high you can get mortgages for housing reform with a financing of 80% of the value of a home (be it a house, chalet, apartment, or a flat). Although it is not easy to obtain, the most normal thing is to resort to a personal loan to reform the home to finance works in housing.
So you can get the money you need for the works and pay it in comfortable monthly installments regardless of the budget or payment method of the construction company and interior renovations.
This type of loans for housing reforms, have as an exclusive objective to finance the construction works at home. That is why they are more similar to personal loans than to mortgage loans. That is, they are financing with a fixed interest rate, not variable, usually less than 10% per year. The repayment period usually reaches up to 10 years, but as with other personal loans, conditions can be improved with linkage.
That is, hiring additional products in the same bank or financial institution, such as home insurance that covers any type of loss inside your home. In summary, the main characteristics of loans for home renovation are:
Maximum financing amount: the amount of money you can get to do the works to reform the house is usually not as high as in a mortgage, but not as limited as in a micro loan. So you can get the money you need to do the works of reform in your home, from 6000 euros to even 75000 euros if you are a very good customer for the bank or financial institution.
Interest rate : a characteristic of personal loans for home construction is that the interest rate is usually fixed, given that the term is not very long. But the final interest rate you will pay depends on the link you have with the financial institution or bank where you will get the credits to reform the house. Normally, the relationship is the basic one, that is, domicile the payroll and contract a life insurance that guarantees the payment of the home reform loan. But it is also common to have to hire a fire insurance or similar for housing. So your home reform loan can vary between 4% and 10%.
Commissions : as happens with other types of personal loans in the credits to reform the house there are usually commissions in addition to interest. Basically the commissions that there are in the home renovation loans are usually the one of opening, which is deducted from the amount of money of the credit that is entered in the account, and the one of study of the operation. Since the amount of money can be very high, for example 20000 euros or 30000 euros, to do the construction work, it is necessary to study well the solvency and payment capacity of the person who wants to get the personal loan. Although it depends on the amount, it may be that the lender does not charge the study fee. In any case, the opening commission is usually between 1% and 1.50% of the total amount of the housing reform loans, but almost always has a minimum money amount of 100 euros or even 150 euros.
The best credits to renovate the house
There are numerous financial institutions, banks, and credit companies that offer loans for home renovations. But as we said before, they fulfill common characteristics regarding the fixed interest rate, repayment term, amount, etc. Some of the entities that offer loans for housing reforms are Bankerta, Apobank, Catsubank. Although there are also home renovation loans at BBVA. Although there is a very wide offer among financial institutions, not all have the best conditions. That is why the best option is to use an online comparator such as SMS Credit. Although within the available offer of home renovation loans, some of the best credits to reform the house are the following :
Reform Loan of Apobank
This Caja offers a loan with a fixed interest rate of around 4.75% to be repaid within a maximum period of 5 years. The amount of money that can be financed to do home works is between 4000 euros and 60000 euros. The great advantage of the loan for housing reforms of Apobank is that, in addition to a low interest rate, it has no commissions neither for study nor for opening. And also without having to hire other products of Apobank, neither insurance nor payroll, that is to say, without the need of linking in this loan home reform.
Loan Reform Hogar de Catalogue Apobank
Catalogue Apobank also has one of the best loans for housing reforms with a fixed interest rate somewhat higher, since part of 7% and whose repayment term is up to 10 years. The loan to reform the house granted by Catalunay Apobank is up to 75,000 euros, which allows for major construction works. In this case, the Home Reform Loan has no commissions, if there is linkage by the client, neither opening nor study, but there is linkage to get funding for reforms at a lower interest rate. In this case it is required to have the payroll domiciled, and to hire insurance (both from home and from life). But the Home Reform Loan of Catalogue Apobank can be contracted without a link, but in that case the fixed interest rate would be 9%, in addition to having an opening fee of 2.30%.
Home Loan DB of Alibank
The German bank also offers financing for housing reforms. In this case, the loan for housing reforms comes from the highest fixed interest rate, of 7.75% in the first year and of 7.25% in the second year. The amount of the construction works is quite high when financing reforms up to 60000 euros. And the opening fee is at least 60 euros, being 1% on the amount of money granted on the home loan. The maximum repayment term for this home reform loan is 8 years. As with other entities, this type of home improvement loan requires a certain relationship between the client and the entity. In particular, after obtaining the Home Loan db, it means directing the payroll and having to contract two insurance policies, one for the beneficiary’s life and another for the protection of payments in case of unemployment.
One of the most important banks in Spain, the BBVA, also has a home loan reform under very advantageous conditions. Starting with a financing of up to 75,000 euros to carry out works and reforms in the homes, it can be returned within a maximum period of up to 10 years. With an interest rate, which starts at 9.75%, but can be reduced depending on the link of the borrower with the BBVA, up to 7% if there is direct debit or pension, in addition to taking out insurance to protect the payments of monthly installments of the Home Reform Credit of BBVA.