Renovation work, especially in a large property, is usually associated with high expenses. If there is not enough cash to carry them out, you do not have to give up the project right away. In this case, the necessary funds will allow you to obtain a loan for home renovation.The banks offer a number of products, thanks to which you can borrow money for any or a specific purpose. If the latter is a home renovation, there are at least several solutions at your disposal: a cash loan, a mortgage, a mortgage loan, but also a credit card, a revolving loan or an account overdraft.
How to finance the renovation costs?
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The problem is thatindividual options differ in terms of cost , specificity of the action, or available amounts and financing periods. Therefore, before the renovation, you need to specify the approximate cost of the planned works, and then consider which product will cover it in the best way. So the question is,which loan for home renovation is worth using ?
For small investments: overdraft or a small cash loan
People who only want to refresh the interior of the house or make a small purchase for the garden, for example benches or lighting, havesmall financial needsIf they do not exceed several hundred or several thousand PLN, a good choice for them will be a personal account limit or a classic cash loan.
The account limit, otherwise known as the debit, usuallyallows you to borrow a maximum of about 1.000 PLN , which must be returned within 30 days. These parameters are not impressive, but it is worth bearing in mind that such a product does not require a credit agreement and can be free or generate costs of only a few zlotys. If the financing amount is too low, or a short repayment period is a problem, you can opt for a cash loan.
A cash loan gives you the option to borrow from 500 to even over 100,000. PLN , with a loan period ranging from several to several dozen months. Although, unlike an overdraft facility, it already involves a creditworthiness test and requires a contract with a bank, it offers in returngreater convenience and financial opportunitiesIn the end it is more expensive, but for most people and this is the most advantageous way to borrow several thousand zlotys.
For larger projects: cash loan
Renovation of a house or garden investments, such as building a gazebo or a pond, usually consume a minimum of several or several thousand zlotys.A traditional cash loan will also work for this type of project. Thanks to it, you can borrow the amount you need and pay back installments, the amount of which will be adjusted to the possibilities of your home budget. However, it must be remembered thatthe greater the amount and the longer the loan period, the higher the cost of the obligationFor this reason, a several-year cash loan for several dozen thousand zlotys is already an expensive, not very profitable solution.
Loan for renovation of the house and garden
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For major home renovation: mortgage loan
If the renovation is to involve a thorough renovation of the property, which will cost several dozen or even several hundred thousand zlotys, thenthe best choice will be a mortgageThis solution is mainly used by people buying a house or an apartment, but it can also be used to finance renovation works.For the amount obtained, you can, for example, finish walls and floors, make a facade, replace doors and windows, or install other permanent equipment (bathtub, washbasin, heaters or a fireplace). Usually, it does not allow to finance movable elements of equipment, such as furniture or household appliances and audio / video devices. However, there are mortgage offers wherefunds can be used for virtually any expenditure related to the property
A mortgage home renovation loan is the cheapest source of financing on the market , but it must be remembered that it involves the establishment of collateral on the property and a lot of formalities to fulfill. What's more, it also requires, among other things, a home appraisal and its insurance, as well as the purchase of a life policy. These additional fees occur regardless of the loan amount, so it is unprofitable when a relatively small amount of cash is missing.
It must be borne in mind thatthe differences in costs between the best and the least attractive mortgage offercan reach up to several dozen thousand zlotys.That is why it is worth visiting the website: https://finanse.rankomat.pl/kredyty/hipoteczne/ and carefully analyze which bank is able to offer the most favorable financing conditions.
For various purposes related to real estate: mortgage loan
It happens that additional funds are needed not only for the renovation of the house, but also for other investments related to the property. People who would like to refresh their interiors, and additionally, for example, build a garden gazebo and plant a hedge, can support themselves with a mortgage loan. Such a product, like a mortgage, involves establishing a mortgage on real estate and additional formalities, but it allowsto allocate funds for completely any purposesIt is more expensive than it, but at the same time cheaper than a cash loan, which makes it the most cost effective way to finance several different real estate goals.
Or maybe a home renovation loan in the form of a credit card or a renewable limit?
The banks' offer includes two more products thatcan work as a home renovation loan : credit card and a revolving (credit) limit, also known as a revolving loan. They differ from classic solutions, such as a cash loan or a mortgage loan, in that the clientdoes not have to declare what amount and for what period up to over PLN 100,000), which can be used freely and repeatedly as needed. What's more, the debt is not repaid in installments, but in virtually any parts and dates, and each repayment leads to a proportional rebuilding of the available pool of funds.
"A credit card or a revolving limit should be considered whenhome renovation is carried out in stages or involves costs that are difficult to estimateThanks to them, you can systematically raise funds as the renovation work progresses and pay off the resulting debt on an ongoing basis ; because interest is only charged here on the amount actually used.The card and the limit are especially profitable for those who have a low or even zero debt balance for a long time. "
The credit card has the advantage over the limitthat it offers a 50-day interest-free period, but on the other hand, it may involve small, fixed fees for use. Therefore, practice shows that it turns out to be a better choice, but only on the condition that it is systematically used. In the case of a limit, the borrowed funds are immediately interest-bearing, but no other fixed costs are incurred.
Summary
If you need asmall home renovation loan , choosing the right financing option shouldn't be too much of a problem. A cash loan will work here, as well as, if the work will be carried out gradually over a longer period of time, a credit card or a revolving limit.
When a larger investment is planned, you need to carefully analyze and compareprofitability of cash loan and mortgage products Regardless of the chosen solution, it is worth applying for an amount of at least 10-15 percent. higher than that resulting from the estimated costs of renovation works. During the renovation, it is easy to find additional costs that were not provided for at the planning stage. A larger reserve of cash is a guarantee that in such a situation it will be possible to finish the investment without downtime.
