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All about credit for work and loan to renovate your home
Many individuals are confronted each year with the need to carry out renovations or improvements to their homes. These works are variable, from the insulation to the construction of an extension, through the renewal of the decoration. More or less expensive, this type of work can quickly seem impossible because of the large sums required and sometimes low household income. Yet living in comfort should not be an option or lead to sacrifices. Fortunately, there are solutions to support you in your needs.
Our experts tell you everything about building credit and renovating your home. What are the formulas available on the market? Where to turn to benefit? What can you claim? What are the interests you can expect? We guide you step by step to the completion of your project!
What are the different types of work credits?
To carry out the work of improvement or renovation of your home, you can have several forms of credits.
Classical work credit
To obtain a loan to carry out your work , you have the following traditional credits:
Personal credit to carry out its work
This consumer credit is suitable for small jobs of type insulation or renovation whose cost is reasonable. The borrower is free to carry out the work that he wishes, by himself or by the care of a professional, without proof or estimate. All banks and specialized credit organizations can offer it for variable rates.
Depending on your needs and your project, some financial service providers may even offer you specific credits for the financing of pool works, garage construction, insulation, etc. Interest rates are generally more attractive in this case and all project needs can be included. For a personal loan, the amount allocated can not exceed 75,000 euros and the repayment period can not exceed 10 years. Be aware that the interest rate of personal credit is on the other hand higher on average than for other specialized credits. Compare before you commit!
The mortgage loan to carry out important work
The main purpose of the mortgage loan is to finance the acquisition or construction of a property, but it can also finance the work that is necessary there. The interest rates of this type of credit are lower than those of a personal loan and it can cover very significant costs of renovation. Indeed, the amount allocated can exceed 75 000 euros for a refund over a period ranging from 10 to 30 years, a significant advantage for a big project!
Loan by aid organization
This type of social housing loan enables low-income households to benefit from assistance to finance their work (for a minimum of 4,000 euros), but also the construction of a new home.
The loan works at zero rates for works
The zero-rated work loan, dubbed PTZ or zero-rate eco-loan, is a special loan whose interest is non-existent, as stipulated in its title. Created in January 2011 and revised in January 2016, this loan has the principle of entrusting the State with the interest rates for work done in a dwelling, a social directive that is part of the measures of the Grenelle of the environment.
The interest-free loan is not intended to finance works only, but can be subscribed as part of an acquisition of real estate accompanied by work. The borrower has a sum that can not exceed 30 000 euros and he must repay his loan over a period ranging from 3 to 15 years. The borrower has a period of 3 years to carry out his work after the subscription of his credit. On the other hand, the borrower who uses this type of credit can not dispose of his dwelling other than as principal residence before the total repayment of the work. In other words, he can not rent it, use it as a second home or make it a local professional or commercial before maturity.
In order to be granted a zero rate loan, the acquired home must be the borrower’s principal residence and must have been constructed before January 1, 1990. The work must also be carried out by an RGE undertaking. that is to say Recognized guarantor of the environment. To subscribe, the borrower must turn to a bank that has signed an agreement agreement with the state.
Home Improvement Loan
The Habitat Improvement Loan, also known as PAH, is for some eligible people. Linked to the CAF (Family Allowance Fund), it is intended to finance the costs of development and repair of the principal residence of the borrower, whether the owner or the tenant. This includes the services of sanitation, sanitary, thermal insulation, expansion or heating.
To benefit from the housing improvement loan, the borrower must be a recipient of the CAF, he must collect at least one of the various family benefits insured by the CAF, and he must reside in France. On the other hand, individuals benefiting from the PLA, the allowance for adults with disabilities or the child-only housing allowance can not benefit from the habitat improvement loan; another family benefit is needed to qualify. In summary, to benefit from the habitat improvement loan, you must be the beneficiary of at least one of the following services:
- The birth bonus
- Recovery of support
- Old-age allowance for stay-at-home parents
- Basic allowance
- The back to school allowance
- The parental attendance allowance
- The family support allowance
- Family complements
The borrower must turn to his Family Allowance Fund to apply for a home improvement loan. Several personal documents and vouchers will be required. The amount granted is variable and generally covers nearly 80% of the amount of work; however, it can not exceed 1067.14 euros. The reimbursement is for 36 monthly installments, ie a period of 3 years. The interest rate of this type of loan is fixed and of the order of 1%. The borrower receives half of the amount allocated on the same account as the family allowance received at the signing of the contract, provided that he provides a clear and precise estimate. The other half of the sum will be paid at the end of the work, upon presentation of the invoice (s), maximum 6 months after the completion of the work. In the opposite case, the borrower may be obliged to repay the entire balance.
The home improvement work may be carried out by the beneficiary borrower directly or by the services of a specialized and recognized company in the field of its intervention. Only home improvement is covered by this loan, and not traditional beautification or maintenance work.
A borrower can fully apply for several applications to carry out several separate jobs in his home, even if he already has a home improvement loan. However, there is no guarantee of acceptance of the credit or the constancy of the amount lent.
What are the rates for the credit works?
Depending on the financing method chosen by the borrower, there are two types of rates for work and renovation loans:
- The fixed rate loan: the rate is decided when the contract is signed, depending on the market in force. It remains the same throughout the term.
- The variable rate loan: the rate changes each year according to market variations and the index.
To find the credit formula for work that suits you, do not hesitate to compare the offers of different providers in credit and negotiate! Make sure you sign a contract that suits you and meets your needs without getting into debt. It’s your turn !