A home renovation loan creates quality of life. To what extent do you want to renovate? Some color on the wall and furniture rearranged? Or do you get the loose plaster off the walls, insulate and renew the supply and disposal lines?

We will provide you with suitable credit options for your renovation project below. It starts with publicly funded loans if you want to renovate the living space. Loan offers for the renovation of the rented apartment with weaker creditworthiness put up last.

Home renovation loan – why not renovate right away?

Home renovation loan - why not renovate right away?

A home renovation loan can be the prelude to converting the living space into a major construction site for months. The loose plaster is knocked off room by room, power cables are pulled, the masonry is insulated and much more. To call such a project a renovation is an understatement, at least in terms of effort. People who bring their old building up to scratch usually refurbish.

The step towards energetic renovation would no longer be large. Taking the small step further appreciates the entire project. It may be a few USD more expensive to refurbish energetically and use higher quality materials. Perhaps, in addition to the originally planned measure, an old window has to give way and the heating concept of the residential unit has to be reconsidered.

In return for the comparatively small additional effort, the federal government rewards energetic renovation with promotional loan offers. Applying for a loan for energy-related refurbishment through a bank is initially much cheaper than a comparable loan for home renovation. Bank provides up to USD 100,000 in credit, 0.75 percent effective interest rate, 10 years of fixed interest rates, and a maximum term of 30 years.

Public promotional loan – Bank loan 151 or 152

Public promotional loan - KfW loan 151 or 152

The energy renovation loan is applied for in the same way as any renovation loan. The borrower’s contact person is any commercial bank that also acts as a partner for Bank. In contrast to the self-initiated renovation, an energy consultant must accompany the action planning. He accompanies the planning, then the implementation and helps to comply with the formalities.

His performance is paid for by the client. However, the costs are included in the financing. The subsidy program also speaks for the renovation loan instead of credit for the apartment renovation. Private borrowers may apply for a repayment grant of up to USD 30,000 through the 430 grant program. Taking the bill 100,000 USD at 0.75 percent APR and repaying only 70,000 USD works without a calculator.

The weakness of the publicly funded renovation of the living space is divided into two problem areas. On the one hand, citizens feel overwhelmed by bureaucracy, just as when applying for other public services. The second “sticking point” results from the performance implementation. The meticulous obligation to provide evidence effectively prevents a high proportion of personal contribution from being contributed.

Even experienced DIY enthusiasts can leave the tool case closed. The problem is not the actual implementation of the requirements, but their proof. No master craftsman will sign for a service that he has not performed with his company. For many builders, the promotional loan is unattractive for the reasons mentioned.

Renovation loan without land register

Renovation loan without land register

The next cheapest alternative, for many renovation projects in old buildings, are loan offers for renovation or modernization without a land register. With renovation loans without a land register, commercial banks target long-term property owners. A paid or almost paid property is a guarantee for secure lending. Of course, this also applies if the claim is not secured in the land register.

The earmarking ensures that the property owner invests the money directly and indirectly in increasing the value of his property. The loan for the home renovation without a land register is granted for special interest rates. An interest rate, depending on the personal creditworthiness of the applicant, of less than 2.0 percent effective annual interest may currently be calculated.

Purpose limitation with this type of financing does not lead to pedantic proof that the money flows into the renovation exactly to the cent. Most credit institutions only show the material bills and craftsman bills. There is no invoice for DIY services, but a simple photo is enough. The highlight is that unused money can not only flow into renovation work, but mostly also into furniture or the fitted kitchen.

Home renovation loan – rental apartment

Home renovation loan - rental apartment

A renovation loan for the rental apartment is usually aimed at “cosmetic repairs”. Perhaps with the consent of the landlord, a wall should get new tiles, the majority is about the color of the apartment. Large amounts of credit are not required. A low-interest small loan is practically always sufficient as a loan for the home renovation.

Small loans between USD 1,000 and USD 3,000 with a term of 12-36 months are among the most low-interest consumer loans of today. Instead of overdrawing the expensive current account, it is worth comparing interest rates using a free credit comparison calculator. Regular small loans are currently being offered in the rough framework of around two percent effective annual interest, for example via the credit comparison of Best Lender.

If 1000 USD were financed at 2.0 percent effective interest rate over 12 months, the loan would cost a total of 10.77 USD in financing costs. In addition to the regular home renovation loan, Best Lender also offers access to loans with poor credit ratings. In the context of a small loan from private, even renovation loans would be realistic despite Credit bureau.