Refurbishment loan comparison: Cheap finance the refurbishment

Important to the restructuring loan

  • Suitable for small renovations
    The reorganization loan is ideally suited for smaller measures, but you should complete a mortgage on major renovations.
  • Pay attention to earmarking
    If you conclude a reorganization loan with earmarking, you can often benefit from more favorable conditions. The loan can then be used only for this purpose.
  • Direct bank or branch bank
    With direct banks you often get a cheaper credit than with branch banks, since the personnel and processing costs are lower.

Whether a high-quality insulation, new windows or the modernization of the bathroom – if a property needs to be renovated, this can be extremely expensive. Restoration measures are necessary, however, in order to be able to maintain a certain level of comfort in one’s own home.

How to find a cheap reorganization loan

How to find a cheap reorganization loan

With the aid of a so-called restructuring loan, you can finance refurbishment work that you need to carry out on your house or apartment. Basically, this type of financing is similar to other conventional installment loans. However, this loan is earmarked – so you can only use it for the agreed purpose.

Usually, the loan is used to carry out energy recovery measures. These include:

  • The thermal insulation of the property
  • Replacing doors and windows for more sustainable energy consumption
  • Replacement of the heating system for more sustainable energy consumption
  • Renovation of ventilation systems for more sustainable energy consumption
  • Extensive renovations to achieve an efficiency house standard

The reorganization loan for your house you usually receive only if it concerns the above-mentioned work. However, if you would like to modernize your living space or purchase new furniture, you should apply for a residential or modernization loan. The easiest way to find the right loan is to use a loan comparison.

For some banks, you also have the option of combining different loans – for example, if you want to take several actions at the same time. If, for example, you want to renovate your bathroom and also replace your heating systems, you can take out a reorganization loan and supplement it with a modernization loan or a classic installment loan.

What to look for in the restructuring loan?

Before you take the reorganization loan, you should first make some considerations, so you finally get the appropriate loan.

  1. Are you a tenant or owner?
    Most reorganization loans are only given to real estate owners, as only they are authorized to make changes to your property. However, if you live in an apartment for rent, you should contact your landlord and ask him to do the necessary work.
  2. What measures do you want to take?
    Make sure that the work that you want to do on your property is really remedial – otherwise your loan application may be rejected. So, make a list of all the work you need to do and decide which one is best for you.
  3. Can a state subsidy be used?
    State subsidies are possible, for example, through the (Intrasavings bank). However, whether this is suitable for you depends on your planned remedial measures. If you would like to meet the Intrasavings bank standard of an efficiency house, you can apply for this loan from your bank – but this involves minimum requirements that your property has to fulfill after the measures have been implemented.
  4. What costs are associated with the renovation work?
    If you want to provide the entire property with a new heating system and a modern thermal insulation, this can be extremely expensive. If the costs exceed 50,000 euros, it makes more sense to complete mortgage lending. The reorganization loan is more suitable for small measures.
  5. Which runtime is suitable?
    Set the term so that you can pay off the loan as quickly as possible, but without any problems. If it is a sum of a maximum of 10,000 euros, usually a duration of three to five years is sufficient. It makes sense to carry out a household bill in advance. To find out how much money you can use monthly to repay the loan. Please note that you have to repay not only the loan amount but also the interest.

Do not start rehabilitation too soon

Begin the renovation only after your loan application has been approved and you have received the loan amount. Start with the measures beforehand and then your loan application will be rejected, you will stay on top of the costs and in the worst case, you will have to take care of them yourself.

Whether the desired loan is really cheap can be recognized by the following criteria:

  • The APR: Always keep in mind the annual percentage rate of charge for a credit comparison. This contains both the debit interest and all ancillary costs such as processing fees.
  • Additional fees: Check if the provider has additional fees. These may be, for example, account maintenance fees or costs for a special repayment.
  • Special Lending Right: Cheap and reputable loans often include a free special repayment right. As a result, you can meanwhile repay a higher amount than agreed in order to pay off the loan more quickly.
  • Rate adjustments: Depending on the term, it is worthwhile to include this condition in the loan application. For example, the rates can be adjusted if your job situation changes.
  • Direct bank or branch bank: Since the entire process of applying for a loan with a direct bank can be processed online, these loans are often cheaper – because this simplified transaction incurs less processing and personnel costs. But make sure that it is a reputable direct bank, where you have no hidden costs to fear.

Purpose binding at the bank request

The earmarking of the reorganization loan has a decisive advantage: Since the loan is hedged by the purpose and so the risk for the bank is lower, this is rewarded with lower interest rates. Therefore, in this case, the reorganization loan is better than a conventional installment loan.

Step by step to your reorganization loan

Step by step to your reorganization loan

In order for you to conclude a suitable loan, you can use our calculator for the restructuring loan. This offers you the opportunity to compare different providers of credit and to find the right offer.

However, to use the calculator, you first need to calculate your loan volume: not only is it important how much credit you need, but also how much credit you can afford. For this purpose, it makes the most sense to carry out a household bill:

  1. Analyze your bank statements for the past six months. Use these excerpts to list all regular income and expenses. These include rent, monthly insurance contributions and purchases.
  2. Also, list those expenses that you must pay on a quarterly, half-yearly, or yearly basis. These payments may be included in the term of the loan and must therefore be taken into account. These include other loans, insurance and similar liabilities.
  3. Plan for extraordinary costs that may occur during the term. These include, for example, the repair of the vehicle, the purchase of a new household appliance or an upcoming holiday.

Once you have completed the budget, there will be an amount left over – you can use it for monthly restructuring financing. Upgrade this amount to a desired term to get the loan amount you can afford.

example calculation

If you can put 200 euros into the repayment of the loan every month, that amounts to 2,400 euros per year. With a term of three years, you could afford a loan of 7,200 euros. Keep in mind, however, that when repaying the interest costs will be added to the loan amount. In this example, it makes sense to conclude a loan with a total of around 6,500 euros.

Use this amount to begin credit comparison on our loan calculator and find an online loan :

  1. Enter the loan amount, the desired term and the purpose. Then click on “Compare restructuring loans”.
  2. You will get an overview of all providers who are eligible for your loan. In addition to the logo of the respective bank, the monthly installment, the annual borrowing rate and the annual percentage rate are listed.
  3. Once you have decided on a provider, click on the “Next” button next to the corresponding bank.
  4. You can now send a free and non-binding loan request to the respective provider. Enter the number of borrowers in the form and click “Next”.
  5. Fill in the form with your personal details. Then click on “Continue” to provide further information about yourself and your profession.
  6. If you have clicked on “Next”, fill out a form that deals with your income and expenses. Then click on the “Next” button again.
  7. You can now specify when you want to withdraw the loan and to which account the loan should be paid. Finally click on “Request offer”.

Your request will be submitted to the selected cooperation partner – your contact person will contact you as soon as possible as soon as your request has been processed. You will then receive an offer including all necessary documents, which you can calmly review and accept or reject.

If you accept the offer, you must complete and sign the documents of the bank. Then, locate a post office near you and follow the Postident procedure : You complete the Postident coupon and have it inspected by a member of staff, as well as your ID card. This confirms your identity and send all documents including coupon and if necessary photocopy of the card to the bank.

Only after the signed application has been sent to the relevant provider and checked there again, the renovation loan will be paid to you. You usually receive this within a few working days.

Intrasavings bank loan is paid by bank

If you receive a loan from Intrasavings bank for reorganization, the money will nevertheless be transferred from your bank. The Kreditanstalt does not lend your loans itself, but has them carried out by the banks of the Intrasavings bank banking group.

questions and answers

For whom is the reorganization loan suitable?

The reorganization loan is suitable if only small or relatively cheap measures are to be carried out – these can be easily financed by this loan. On the other hand, if you would like to extensively renovate your property and, if necessary, modernize it, a home loan financing is more appropriate: it offers relatively favorable conditions and is secured by a mortgage.

What financing options for remedial measures are there?

You have the following financing options to carry out renovations:

Reorganization loan from Intrasavings bank Used for energy efficiency measures that transform the property into a Intrasavings bank Efficiency House
Modernization / Home Loan Is suitable for modernization measures, such as the improved sustainability of energy or water consumption
Classic installment credit Is not earmarked and can be used for refurbishments, which are supplemented by renovations or the purchase of new furniture
Construction Financing Used for large-scale refurbishment requiring a high loan amount

What should be considered in the restructuring loan?

It is important to note that the reorganization loan is earmarked: you can only use it for measures that you have agreed in advance with your bank. Also, remember that you can cover certain remedial work, such as energy efficiency measures, through government subsidies.

In addition, keep in mind that the duration and the loan amount depend on the particular measure you wish to carry out. Here it is worthwhile to consult a neutral energy consultant who can help you with the assessment.

What requirements does Intrasavings bank set for a reorganization loan?

Since 2014, Intrasavings bank only lends its loans if the borrower includes an expert in its renovation work. This should ensure that the money is really used for the agreed measures and the quality of the property is secured. For this, the energy consultant must be included in the “Quality-assured energy efficiency expert list for federal funding programs”.

In addition, you must set up a precise cost and action plan and send it to Intrasavings bank. It is important that this plan shows that you want to extensively renovate your home and thus achieve the standard of the Intrasavings bank Efficiency House.

What is the restructuring loan without a land register entry?

For this type of loan, the cost of the land registry and the notary need not be paid. However, interest rates are often higher here than with mortgage lending. This is particularly suitable for measures that do not have a high financing requirement.