Loan for Home Renovation. What Solution to Choose?
Property renovation is always a huge burden for our pockets. Those who are unable to carry out the undertaking themselves can use the help of banks. Let’s check what solutions have been prepared for people planning this type of work.
Choosing the right financial solution really depends on the size of the planned renovation. If you only want to refresh the interior, your financial needs will be much smaller than in the case of a complete renovation of the old house inherited from grandparents. So before you ask the bank for help, you should evaluate the scope and the approximate cost of the planned work. The more accurately you make a cost estimate, the greater the chance that you will choose the credit solution you need well and you will not have enough funds to carry out all the necessary activities.
For a small renovation: credit card or account limit
Let’s assume for the beginning that you are planning a minor renovation – painting the walls, exchanging some small things in the apartment, etc. You estimated that the cost of such works should be close to PLN 3,000. In this case, a credit card may be a good solution.
The advantage of such a solution is first of all a long interest-free period (up to 60 days), which in practice means that you will be able to enjoy a completely interest-free loan by repaying the contracted debt at the indicated time .
Financing refurbishment with funds from a credit card is also a good way out when you care about time. It happens that the need for renovation appears unexpectedly, and we must act quickly. Instead of wondering where to get the money, just reach for the credit card, which provides permanent access to the funds within the limit.
For bigger changes: a credit limit or a cash loan
Each flat or house requires large investments from time to time, such as the replacement of used equipment. In such cases, the financial needs of the owners will be much greater – it is usually referred to in the amount of several thousand zlotys. If you are wondering how to finance such a renovation, we recommend reaching for the account limit or a cash loan.
If you have a personal bank account, in many cases you will be able to use the account limit service. The amount of the granted limit usually depends on the receipts on the account, nevertheless, the amounts of PLN 20,000 are nothing special here.
An alternative to the limit may be a cash loan for any purpose.
Reaching for this product, it is worth having the cost estimate at hand. All this to properly match the amount of commitment to your needs. Experts also recommend that the expected amount increase by some 15% . During the renovation it is very easy to have additional costs that we have not anticipated before. With a slightly larger financial reserve, such situations will not be a problem for you.
For complete changes: a mortgage
If, on the other hand, the renovation planned by you is an investment consisting in the total renovation of your property and you need a cash injection of several dozen or even several hundred thousand zlotys, it is worth considering a mortgage loan.
Although this solution is usually used by people planning to buy a house or flat, nothing prevents the funds from this product from being used for renovation works. Of course, in this case, the loan will be secured by the real estate you are planning to renovate .
As you probably guessed, taking out a mortgage will involve more formalities to meet. We are talking here about big money, which is why the tight procedures used by the bank should not surprise anyone.
Once you’ve assessed which loan product suits your needs, it’s worth comparing the bank’s offerings for a particular solution. The banks’ loan proposals are a bit different, for example in the case of commissions. In one bank, you can pay less for a cash loan than in another. Comparing offers, you will quickly choose the solution that will be the most profitable for you (kg)