Your modernisation loan must meet your personal needs

house building

There are many different types of modernisation loans: classic annuity loan, home loan or personal loan (instalment loan).

Whatever you do to modernize your property, it is important that the loan suits you. We hope by reading this article you can gain some useful knowledge.

Which modernization loans are there?

The most suitable loan for your modernization depends above all on the scope and type of modernization measure. Thus, the required loan amounts vary depending on the project: cosmetic repairs such as painting and wallpapering cause costs other than the renovation of bathroom or kitchen. Small work can usually be done without the need for a loan. For larger measures, however, a modernization loan is often necessary. Below is an overview of the most common types of credit.

Mortgage / annuity loan

Annuity loans are referred to as classics of mortgage lending and are also suitable for modernization. During the term of the contract, the borrower always pays the same monthly installment (annuity), which consists of his interest and a repayment installment. During redemption, the interest portion decreases, while the repayment portion continuously increases. In this way, the debt burden decreases over the years. Annuity loans are completed with a specific debit interest commitment. This determines how long the agreed borrowing rate applies or how long the monthly installment must be paid. After expiry of the interest rate commitment of follow-on financing, no residual debt should be left over; otherwise further financing will be necessary.

Mortgage loans secured by mortgages are cheaper than private loans, which are also frequently used, since the bank is secured in the event of an emergency. However, the cheaper financing is then associated with costs, such as for notary and land register, if there are no free (already repaid) parts of the existing mortgage exists (revaluation).

Private loan / personal loan

A private or personal loan is recommended for smaller financing needs. Since this loan does not have to be secured in the land register, it is recommended for amounts below 25,000 dollars. This not only saves notary and land register costs, but is much faster in the application. In addition, long-term terms of up to 120 months are possible and installment loans can be repaid in full or in part at any time after only 6 months. Today you have tons of personal loan choices but based on our experience, there are only a few trusted borrowers. One of them is Asteria Lending. You can visit Asteria Lending here!

Building loans

A home savings loan is a non-cancellable, usually subordinated, low-interest loan, which may only be used for housing purposes. As with a classic annuity loan, the home savings loan is repaid in constant monthly installments. Depending on the loan amount, the lender may also waive the entry in the land register.

Whatever loan you take, make sure it’s really needed and in accordance with your expectations. Hopefully this article is useful to increase your knowledge about various modern loan formats.