Why take out a loan for renovation?
Taking out a loan for renovations is often a sensible option because the costs for materials can be very high in many cases and cannot be paid at once, and long-term saving is not always an option. Therefore, a renovation loan or modernization loan is a practical solution to repair damage in an apartment or to bring a property up to current standards.
It is a fact that living space of any kind wears down over time. It is therefore sensible to carry out renovations at regular intervals. If no savings are available, a loan in the form of an installment loan can be an appropriate solution.
This measure preserves the value of the house or apartment and contributes significantly to a better quality of life. Depending on the type and extent of signs of wear, cosmetic repairs such as wallpapering and painting may not be sufficient. For floors such as laminate, parquet or carpet, often only a complete replacement helps. Renovating sanitary facilities can be associated with considerable costs, as here too only a thorough renewal helps. Depending on the condition of the interior doors, these can possibly be painted. However, if it is necessary to replace fittings and handles, the effort can be much greater. These costly repairs usually require taking out a renovation loan.
Experienced homeowners and flat owners know these problems. Once renovation work begins, one always discovers new, small problem areas that should also be addressed. Instead of carrying out the required work in small steps as money is gradually saved, a loan provides the necessary funds in one sum. In this way, all work can be planned and carried out efficiently, which can even lead to cost savings in some cases.
Types of renovation loans
For smaller cosmetic repairs, such as those that occur in a newly rented apartment, an overdraft facility as a renovation loan can be sufficient. This is a special form of a cash loan. The overdraft limit on your salary account is increased by the bank for an agreed period. At the end of this term, the account must be back to its previous balance, i.e. the loan (the negative balance) must be fully repaid. Specific repayment installments are not fixed in this case. The advantage of this credit form lies in its flexibility. The drawback is usually the level of interest rates, which generally range between 5% and 12%.
However, this type of credit is not suitable if you are planning a more extensive renovation or modernization. In this case, an installment loan in the form of an all-purpose loan is recommended. Such a loan can be used for any expenses and is therefore not tied to a specific purpose. The term is usually 5 to 6 years. The loan agreement stipulates a fixed monthly installment for interest and principal, which gives you planning security. If this loan is then repaid and the capital service ran smoothly, you have good chances of getting another loan approved to further improve your home.
If it is a modernization of your own property, a purpose-bound modernization loan or renovation loan can also be taken out. The advantage is that the property can serve as collateral for the bank. This security is then implemented in the form of a registered land charge. This reduces the bank's risk, which also has a positive effect on the level of interest rates. Relevant for the approved loan amount is the increase in value expected as a result of the renovation.
At the same time, for some modernizations or renovations subsidies from KfW-Bank can be applied for.
For very large interventions in the building fabric, mortgage financing may also be the right way.
Value-adding renovation measures bring more benefits
Once you have found a suitable loan, careful planning is indispensable. Do not just start working, because that can be expensive. It is therefore advisable to acquire expert knowledge first so that the renovation loan is used as efficiently as possible.
Also research whether, in addition to cosmetic repairs, value-adding renovation measures might be sensible. These include, for example, converting the attic to create additional living space, installing new windows, or fitting a new heating system. If the roof needs repair, installing a photovoltaic system may also be an option.
Financing renovation measures is usually easier for a lender if the work not only maintains value but also increases it. If the renovation loan also includes work to improve energy efficiency, subsidies may be available. An on-site energy savings consultation is sometimes subsidized with about €300 by the Bundesamt für Wirtschaft und Ausfuhrkontrolle. Careful planning is therefore essential.
Compare renovation loans
When comparing loans, you should first consider which type of loan is right for you. This largely depends on how high the required loan amount is. For amounts up to €7,500 a loan without a Schufa entry can also be a good choice, as this does not affect your creditworthiness for further loans.
Once you have decided on a form of borrowing, you should obtain different offers. Also make sure that the request for an offer is not reported to Schufa. This can also affect your creditworthiness!
Furthermore, it should be noted that comparison portals do not replace a real offer. These portals do not show which interest rates a bank or lender will offer in your individual case.
If you want to save yourself the comparison and obtaining many offers, use the MAXDA service: One request from you and we search from many offers from European banks the best one for you. You simply provide the amount you want to borrow, the term in months or the desired installment. It's that simple!
More quality of life with a renovation loan from MAXDA
You should then entrust the brokering of this renovation loan to a trusted and experienced financial service provider like MAXDA. Here you will meet a competent team of financing experts who, thanks to numerous contacts with recognized credit institutions at home and abroad, will arrange financing for you at premium conditions within a short time.
Planning and preparing a renovation requires a lot of time and effort. MAXDA, however, can arrange the necessary funds within a few days. The requirements for a renovation loan are very simple.
If you have a monthly net income of more than €850 and are at least 18 years old, we can arrange a loan for you. If you do not meet these conditions, you still have good chances if you can name an additional solvent guarantor. Depending on your creditworthiness, we can arrange an all-purpose loan in the amount of €1,500 to €250,000. Our favorable conditions for all terms start at an interest rate from 3.99%. The first installment is due only 4 weeks after receipt of the money. You can repay the loan we arranged for you at any time with a special repayment. If a negative entry in Schufa seems to stand in your way, do not hesitate to contact us.
One of our specialties is arranging a loan without a Schufa entry. This amounts to €5,000 and requires as a prerequisite that you have an income of at least €1,130 and are between 18 and 60 years old. A loan without a Schufa entry is granted by credit institutions in other European countries that do not cooperate with Schufa and therefore do not make an inquiry there. A negative Schufa entry is therefore not an obstacle to a loan. Whatever form of loan you choose, the formalities are completed by us in no time.
To start the approval process, fill out the uncomplicated Online form and send it to us. You will then receive your loan application by e-mail and by post. Fill it out truthfully and send it back to us along with the required documents. As soon as we have these, we will contact you to discuss all further details so that you can have your money as quickly as possible.
It is helpful in this context if you provide us with your telephone number and your e-mail address so that there can be no time delays. Of course, our friendly and competent staff are happy to assist you with advice and support. So do not hesitate to call us if you have any questions.
