Renovation loan – which one to choose?

Are you planning a holiday renovation? Painting, new furniture, kitchen tiles, or a renovated bathroom? This can take up several or even several thousand zlotys. What loan is worth taking for a renovation so as not to pay it back for the next renovation?

Renovation loan in two cases

Renovation loan in two cases

Renovation of an apartment or house can be financed in at least two ways. The first is a cash loan without any formalities or additional collateral. At the moment, such loans can have a value of up to PLN 200,000, which should satisfy the renovation aspirations of even the more demanding ones. Another solution is a mortgage, i.e. one that is secured by a house or flat. Such a loan may have a smaller installment than a cash loan, but granting a mortgage requires many additional formalities.

You know best what you want to change in your home. Try to pre-determine which order you can finance yourself and what you will buy for the loan. Perhaps the amount of credit can be estimated in such a way so that it does not constitute too much burden.

Cheap loan for small renovation

Cheap loan for small renovation

In the event that we are planning a small renovation, which will consume from several to several thousand zlotys, in this situation the ideal solution will be a cash loan. A cash loan is the “fastest loan” because we often get the decision on obtaining it within a few hours. Banks usually require a minimum of formalities, because proof and confirmation of income – salary or retirement often suffice.

Current cash loan promotions give us the opportunity to take out a cheaper loan if we meet the additional conditions. These are not extremely difficult requirements to fulfill, so it is worth taking advantage of such an opportunity. By creating an account in the bank in which we are interested in credit, we can often receive the lowest interest rate in thanks, and by inviting a close person to a loan, we can also take advantage of the interest rate promotion and we will obtain a higher loan amount.

What to look for when choosing such a loan?

  • For promotions for new / regular customers
  • On the interest rate (also promotional)
  • On the speed of your credit decision
  • On the possibility of taking advantage of credit holidays

A major renovation is a bigger loan

A major renovation is a bigger loan

Renovation of a house or apartment, which requires a significant amount of money, can also be financed with a mortgage. The bank establishes collateral for such a loan on our property, which means that this loan may have a higher amount than a traditional cash loan. The amount borrowed is determined by the amount borrowed and the value of the collateral.

However, the mortgage loan is more complicated. In her case, we do not have to prepare an estimate or settle the work performed, as is the case with a mortgage, but because the collateral is also a mortgage, the bank will require a real estate appraisal.

The mortgage loan, unlike the mortgage loan, is granted for any purpose, so we will finance refurbishment safely from these funds. In the case of a loan secured by a mortgage, a longer repayment period is tempting – we can pay back such a loan for up to 25-30 years.