Green loan or home loan for a renovation?
Those who intend to carry out renovation work on his home will undoubtedly also pay attention to the loan that is needed to finance this.
There is a difference between the renovation loan, the home loan and the green loan. The interest rate of a green loan (or energy loan ) often looks pretty attractive. How is this correct and can the green loan be used for all renovation work?
Borrow for your renovations
Who wants to borrow money for the renovation of his home has several options. It is striking that during large construction fairs such as Batibouw interest rates fall sharply for renovation loans and green loans. This trend also occurs with car loans during the Motor Show.
Anno 2017 renovation loans and green loans have never been so cheap. The possibilities have also been extended with regard to the limit of the loan amount. Some lenders have raised the amount that you can borrow as much as possible. Comparing loans has never been more important than now. But in what way is it best to finance your renovation now?
Rebuild with a renovation loan
A renovation loan is specifically intended for the renovation of a house. It is a personal loan (= installment loan) in which all modalities are determined in advance. Both the loan amount and the APR (Annual percentage rate) are known in advance.
The rates of renovation loans can fluctuate considerably between the various providers. A renovation loan may be cheaper than a conventional loan on payment, but it is important to compare renovation loans.
To request a renovation loan, you must provide proof of the renovation works. In other words, it is mandatory to show what the money will be used for. This can be done on the basis of a quotation or invoice from the contractor or seller.
Rebuilding with a green loan (energy loan)
Energy-efficient renovations can be financed with a green loan . Examples of eligible investments are the placement of solar panels, a solar water heater or a heat pump.
The energy loan is a variant of the renovation loan. They are rebuilding loans with an extra discount. It is a type of loan that is still very popular in Belgium. Banks and other creditors are only too happy to respond to this, almost every institution offers a green loan.
Just as with a renovation loan, it is mandatory to prove for which investment the borrowed money will serve. The conditions can differ for each lender.
In addition to comparing interest rates on green loans, it is also important to review all the conditions stated in the contract. For example, it is possible that the list of works that qualify for a green loan differs from lender to lender.
Rebuild with a mortgage loan
A mortgage loan can also be used to finance a renovation. This means that the lender gets a privilege on the building that you want to renovate. If one is unable to repay this credit, the lender can exercise this privilege and can sell the property to pay all debts as a priority.
Keeping well informed is important. Although the repayment can be spread over a longer period, can often enjoy cheaper interest rates and in some cases also obtain a tax benefit, the consequences in case of non-payment are also not minus. A possible alternative is to revise an existing mortgage loan at the moment the interest rates are low.
In addition to the loan, you may also be able to use premiums from the municipality or the government to save money. Never forget to check in advance which subsidies you can enjoy. But did you also know that you can save money by comparing contractors?