What is a work loan?
A renovation loan, as its name suggests, is a personal installment loan that allows you to finance the renovation of your apartment, your house or any other type of home. With this credit works, for example, you can use borrowed money to change kitchen or bathroom. Renovating a house can be very expensive. If you prefer not to spend a large part of your savings on renovations, then the renovation loan is something for you. Thus, you have directly the necessary amount for your investment and you spread in time the repayments with your bank.
What kind of loan is the loan work?
There are two types ready jobs. The first is a personal installment loan and the second is a mortgage loan.
The personal loan
With a personal installment loan, everything is agreed in advance. This means that before closing the renovation loan application, the amount borrowed, the duration as well as the interest are fixed. Thus, the interest rate is fixed and does not change over time. Each month you will have to pay back part of the amount borrowed and interest. You start paying off your renovation credit a month after receiving the money from the bank.
The mortgage is similar to the personal loan versus the repayment but it is different on many other points. Thus, with a mortgage, you must go to a notary, which generates notarial fees. In addition, your home will serve as collateral with the bank and will be put in mortgage. This means that the bank has the right to sell your property if you are in default. The bank may also charge you a processing fee at the end of a mortgage.
What type of loan work should I choose?
Tenant or owner, are you considering minimal work?
A personal loan works is great if you want to borrow smaller amounts. The advantage of the personal loan over the housing loan, is that it does not generate a mortgage. In addition, there is no notary fees or registration. The personal loan is therefore very flexible.
With a renovation loan, you must comply with the conditions of consumer credit. The terms on the repayment term limit the repayment time in relation to the amount borrowed since you do not repay on a shorter period. The advantage of this quick repayment is again that you are quickly debt free.
You are, or will you become, an owner?
A home loan is recommended if you intend to borrow a large amount of money. A mortgage loan is associated with notary fees and fees. In addition, you must take out outstanding balance insurance. This is offset by a lower interest rate than a personal loan. Indeed, if you want to borrow a larger amount over a longer period then the mortgage is more interesting than a personal loan renovation.
To find out which loan is most suited to your needs and development projects, perform a job-ready simulation in 30 seconds by comparing the two options mentioned above. This will give you a better idea of the different conditions and fees associated with these two work credit variances.
What can I finance with a work loan?
Generally, you can finance all types of work for your home. One of the conditions of loan work is that you must submit to the bank a voucher such as a quote or an invoice. A bank will not be able to give you credit if you are unable to provide these documents because it will not be able to verify that the purpose of the credit being borrowed is used to finance renovations to your home, which is a condition specific obtaining of this credit works.
A renovation loan is suitable for example for the purchase of a new kitchen or a bathroom. You can also apply for a renovation loan to build a veranda or to install a pool. The installation of an alarm system is also a possibility and there are many other possibilities.
What are the conditions to be able to apply for a work loan?
The conditions for getting a home improvement loan are a little stricter than the conditions for getting most other personal loans. Indeed, the interest rate of a personal loan works is usually less than a personal loan for all purposes. Since the renovation of your home generally generates an increase in value of your property, banks are more willing to offer lower rates.
In addition to the conditions for applying for a personal loan, which you can consult on our loan guide, there are two additional conditions for applying for a loan. The first is that you must own the property you want to renovate. The second condition is that the amount borrowed must be actually used for work. Thus, the bank will ask you to provide either a quote or an invoice as a voucher. So you can use a work loan only to carry out renovations of a property you own and not to buy a car or to pay for a vacation.
Can I deduct my loan work from my taxes?
In order to promote the renovation of homes, the Belgian government allows the deduction of taxes for a work loan. However, the interest rate is only deductible if your loan works is used entirely for renovations. As the legislation may vary from year to year, we advise you to contact SPF Finance directly for more information on the taxation of renovation loans.
Can I receive some bonuses?
In order to promote the renovation of buildings, the State offers many bonuses for the renovation of a home. These aids vary considerably from one region to another and various interventions also exist at the level of the provinces and communes. For example, you can benefit from an improvement bonus, a renovation bonus, a premium for renovations of protected monuments or a premium for energy savings, etc. However, you must meet certain conditions to qualify for a bonus such as the nature of the work, your taxable income, your cadastral income, etc. For more information on premiums and the application process, it is best to contact your region directly.
Is a work loan valid for energy reduction work?
For energy work such as buying and installing solar panels, buying a solar water heater or a heat pump, it is better to choose an energy loan. Indeed, the interest rate for an energy loan is generally lower than that for a work loan. You can also benefit from a renovation bonus depending on the region where you live.
Can I save on a renovation loan?
To save on work-related costs it is important to compare different contractors. Namely, that there are great differences in price depending on one entrepreneur to another. You can easily compare the prices based on the quotes that will be given to you. Most entrepreneurs are ready to give you a free quote. In this way you can compare different entrepreneurs and you do not have to make a decision directly. Before applying for credit you can directly know how much money you will need through our loan simulation tool. Therefore, there is less risk that you borrow too much money.
In addition, we advise you during your loan simulation work to compare loans using different amounts and durations. Indeed, by choosing a different amount (but obviously realistic compared to the work to be undertaken), you will find different interest rates. So, perhaps by borrowing $ 1,000 more, you could add a fence or a brand new kitchen to your renovations. The opposite is also true: it may be more judicious to make certain adjustments only later.
How to find the best loan works?
In order to apply for a loan that suits you best, it is important to compare loan offers. To find the best offer, then do a loan simulation work. However, it is necessary to compare all banks to obtain the cheapest renovation loan.