There are different types of credit. These also have different conditions. The conventional loans are the installment loans. With them, almost all wishes can be fulfilled. The usual term is usually between 72 and 96 months. However, there are also loans that are only approved for a specific purpose.
The difference here is in the term, because it can last a total of over 30 years. In this context, one speaks of a real estate loan. The purpose is clearly defined. This may only be used for the purchase, construction or renovation of a property.
Home renovation loan
You don’t have to build one to make your dream of your own home come true. The real estate sector also offers houses where someone has already lived. Under certain circumstances, these can be obtained very cheaply. This is the case when there is a need for renovation.
But even existing home ownership needs a new coat of paint every now and then. The renovation measures are of course much more expensive for a house than is the case for an apartment. A loan for the house renovation can then be taken out for this.
So that the homeowner does not fall out of all clouds after the renovation, a quote must be obtained from the responsible craftsmen. This is not only important for your own financial planning, but is also needed when talking to the bank advisor, because this also serves as proof that the property is actually a property. The borrower benefits from this because real estate loans have cheaper interest rates than a normal installment loan. In addition, the terms are much longer.
In times of low interest rates, it is even worth choosing a long term. Interest rates cannot change during this time. The bottom line is a lot of money. Nevertheless, you should compare the offers of the banks with each other even with a loan for the house renovation. Here too there are clear differences in terms and conditions or interest rates. After all, this is a lot of money and everyone wants to save.