Construction loans, like home loans, are currently low. It is therefore the moment to invest to enlarge, renovate or rehabilitate in order to feel good at home and give value to its real estate heritage.
With attractive rates starting from 1%, or even zero-rate work loans with the eco-loan, there are many financing solutions to renovate your home. So how do you find the best rate for your loan?
First of all, what is a work loan?
The work loan does not fall into the category of real estate loans, even if this type of loan can be backed by your principal or secondary residence loan, for example.
The work loan is consumer credit, just like a car loan. We often speak of an “assigned loan”, since it can only be used within the framework of the work project that you have defined, such as renovating, expanding, installing a kitchen, etc.
It is therefore a personal loan, but you must justify the use of the funds obtained and can neither pay a debt thanks to it, nor use the loan to go on a trip or buy yourself a computer for example.
In return, the work loan benefits from a more attractive rate than an unallocated personal loan, to help you realize all your development projects !
Know the different work loans available on the market
The so-called “assisted” work loans
These are work loans set up by the State and available from banking partners. They benefit from a reduced or zero rate depending on whether they are intended for low-income households, spending in favor of energy renovation, embellishment, expansion of the main or secondary residence, etc.
In practice, you therefore have no need to compare and can go to your usual bank to take out this type of loan. A PTZ, or an eco-loan for example, are framed by law and are therefore the same for everyone, strict allocation criteria are used to subscribe to it.
If you are looking for a work loan, it is because you are probably not eligible for subsidized loans, either because they do not correspond to your level of resources, or because your development projects do not enter ” in the boxes ”.
The solution ? Move towards a classic work loan, more advantageous than an affected personal loan, and compare the loans offered according to their duration, their rate and their overall cost.
Classic work loans
The classic work loan lends itself readily to many projects. With it, you can finance the following operations:
- Home planning, decoration and equipment
- Expansion or creation of an additional room
- Renovation and repair
- Maintenance works
It therefore responds to all your projects, but it is advisable to be vigilant before subscribing to find the best work loan offer.
Pay attention to the proposed rate
Most often, financial institutions offer appeal advertising offers at attractive rates. However, the rate put forward does not cover all the costs relating to the loan. As a result, the benchmark rate you should be aware of is the APR.
Understand the APR (annual percentage rate of charge)
The APR is the essential criterion to remember to find the best work loan offer. Indeed, it includes all the costs inherent in the credit, in particular the administration fees, the interest due to the bank, the costs due to possible intermediaries such as a broker, death and possible disability insurance …
Favor short durations
Of course, the shorter the term of your loan, the lower the overall effective rate offered. However, be sure to keep enough left over to live. Sometimes it is better to extend the loan term by one or two years for a hundred dollars more in total. This “reduction” of monthly payments allowing you to cope with hard times …
Perform a work loan simulation before committing
There is no one-size-fits-all answer as to which financial institution is best to choose for your work loan at the best rate. Indeed, each establishment will calculate the APR according to multiple criteria. Among these will be taken into account your family situation, your debt ratio, your income and their origins, your age, or the amount and duration of the desired loan.
To find the best work loan on the market that meets your personal needs, it is necessary to compare the offers that are intended for you. Thus, carrying out an online simulation to compare the rates is the best option to find the work loan that meets your expectations.
It’s simple, fast, free and without obligation. You enter your data with precision, you click and then receive fully personalized loan offers. All you have to do is subscribe to the best of them, remotely or by making an appointment!