If you want to know which are the best loans for renovation , don’t leave here. In this guide, we have indeed answered the most common questions and doubts that arise when you have to apply for a home renovation loan.
Restructuring loan: what is it?
The loan for restructuring is a specific loan, that is, granted only for a specific purpose: the renovation of a building. It does not matter whether it is a residential property or a first or second home . This loan, or loan, as the case may be, is granted to carry out construction work in buildings that need renovation. He generally wonders when you don’t have the cash to pay for the costs of the work. And today, who can afford to have fifty, one hundred thousand euros to renovate a house? No one, probably. Especially with the times they run. Crisis times, for instance.
Precisely for this reason, restructuring loans are widely advertised and requested. Some offers are really tempting, but will they really be so profitable? Read the answer in the following paragraphs.
Types of loan for restructuring
In reality, there are no real types of restructuring loans . We could say that there are loans for the renovation of the first or second house, but in reality, this distinction is not so clear. In general, banks and financial institutions simply offer loans to renovate a house and only in some cases specify whether the offer refers to the main house or not. Usually, the offer only covers the maximum amount that can be financed, not the first or second home. Another form of financing for building renovations is the mortgage. This is very different from the loan, both for the maximum financeable amount and for required guarantees and interest rate.
Restructuring: better loan or mortgage?
As mentioned in the previous paragraph, a loan or a mortgage can be requested for the building renovation. However, these are two completely different loans.
The restructuring loan is usually a fixed rate personal loan with an APR of seven, eight percent. It does not require the intervention of a notary and the guarantee of a mortgage on the building, but only a demonstrable income. The personal loan for the restructuring is ideal in case of construction works that do not exceed 30,000 euros .
The mortgage, on the other hand, can be at a fixed or variable rate. The variable rate is generally very convenient, but you must be prepared to suffer an increase in the monthly payment in the event of an increase in the interest rate. The fixed-rate loan almost never exceeds the APR of the personal loan and is useful for more expensive restructuring , between 50,000 and 100,000 euros. Furthermore, for mortgages relating to the first home, there is the possibility of deducting, from the tax return, the interest paid, a possibility not provided for personal loans.
Some mortgages for the renovation of the first (or second) house, refer to energy redevelopment works. These loans can be very convenient in terms of interest rate and monthly installment, because they are offered as a subsidy for the energy improvement of buildings.
Loans for home improvement loans
There are no real subsidized loans for building renovations, but non-repayable loans for home renovation. These are funds offered by regions and municipalities for the renovation of buildings for low-income families or young people. The amount of the loan can even reach 100% of the cost of construction works. The rules for accessing these subsidized loans for home renovation are very stringent and concern income and age limits. To learn about new calls for non-repayable loans for home renovation, you need to inform yourself or periodically visit the site of your Municipality or your Region. And for small renovations on a second home? In this case, and we apologize for the repetition, no one will ever grant you a non-repayable grant, but you will be able to access a personal loan on very advantageous terms. Now let’s find out which one is the best.
Best personal home renovation loans
As already mentioned, in the case of minor interventions to renovate a second home, personal loans are the ideal solution. The most popular of the moment are the ABC loans and Italian Bank restructuring loans .
The Agos offer to renovate the house provides a maximum financeable amount of 10,000 euros, repayable in 72 monthly installments. The installment is relatively low, 169 euros, with an APR of 6.90%. To check these favorable conditions, the loan must be requested by 30 June this year.
The amount of the Italian Bank loan is higher, which is a real financing for building renovation. Italian Bank’s home restructuring loan, reserved for Uni Bank account holders, offers two different lines of credit: from 15 thousand to 30 thousand euros and from 30 to 60 thousand euros. The lower loan has a fixed APR of 8.41%, with a duration from 36 to 96 months, while the highest one, of 7.50%, with a duration of 36 to 120 months.
If instead you have just purchased a first home that needs renovation, perhaps the mortgage is the most suitable solution. Let’s see together which is the best.
Best home renovation mortgage
To date, the best home renovation mortgages are variable rate mortgages. They usually have an initial APR of less than 1% and represent the best offers in the field of restructuring loans. At the moment, the best are two: the Uni Bank mortgage and the Uni Lend mortgage.
With Uni Bank you can get a mortgage loan with a variable APR of 0.87%, with a monthly payment of just over 220 euros. With Uni Lend, however, you will have a variable APR of 0.94%, with a monthly payment of just over 220 euros.
The banks also offer mortgages for the purchase and renovation of the house (especially the first one). These are fixed-rate mortgages, in which the amount financed includes not only part of the value of the property, but also the cost of the restructuring. They offer them, among others: