Modernization Loan to Rebuild and Renovate

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You would like to renovate your four walls or perhaps even carry out additional modernization? In this case, you will normally need capital to put this project into action. With a modernization loan it is very easy to quickly get the financial means for the modernization. Our credit comparison helps you to get a modernization loan that fully meets your needs while still delivering very low interest rates.

Cheap modernization loan – no problem with our credit comparison!

Cheap modernization loan - no problem with our credit comparison!

With a modernization loan you have an uncomplicated and cheap option to increase the value of your property. Our credit comparison can be a great help in finding a loan, because you can enter important parameters beforehand and receive a selection of suitable offers sorted by the APR. Thus, they can quickly recognize the cheapest modernization loans. All you need to do is:

  1. Enter the required loan amount
  2. Set the runtime
  3. Set the intended use to “Modernization”
  4. Click on “compare now”
  5. The different offers sift
  6. Select the appropriate modernization loan

What is a modernization loan?

What is a modernization loan?

A modernization loan is an earmarked installment loan that you can use to modernize your own property. At the same time, the loan has some differences to traditional home loan financing:

  • No security by mortgage: While you must secure real estate financing in the land register of your property by mortgage, banks do not expect this in a modernization loan. This reduces the cost of borrowing and also makes financing much easier.
  • Smaller loan amount: As a modernization loan is only intended for occasional construction measures, the maximum loan amount is lower than for mortgage lending. Normally, the banks limit the loan amount to 50,000 euros, although there are differences from provider to provider.
  • Faster Grant: A modernization loan is specifically designed for real estate owners. So you have to prove that you own a flat or a house. Otherwise, the bureaucracy is not noticeably higher than a conventional installment loan. Thus, you can receive a modernization loan much faster than a home loan.

Why does a modernization loan not require a land registration?

Even if a bank does not claim a mortgage, a property represents assets, which is in doubt for the loan repayment liable. With a modernization, you also ensure that the value of the object tends to increase and thus the hedging better.

Which modernization measures can be carried out with a modernization loan?

As long as the used credit of the property comes to good, there are hardly any limitations of use. Common measures include:

  • Attachments of smaller kind
  • Improve protection against burglars
  • Energetic renovations such as the replacement of the heating system or the thermal insulation
  • Embellishments on the facade
  • Accessibility measures
  • Improvements to the grounds

What should you look for in a modernization loan?

What should you look for in a modernization loan?

Before you decide on a specific modernization loan, you should take a closer look at the individual offers. The following aspects are especially important:

1. The annual percentage rate

The annual percentage rate represents a clear cost estimate, taking into account not only nominal interest but also agency fees and other costs associated with the loan. Since a modernization loan can often entail credit sums of up to 50,000 euros, a credit comparison is particularly important. Here, even with small differences in interest rates, there is a huge potential for savings:

Table 1: Savings potential of a credit comparison – the terms and conditions show a fictitious example and may differ in individual cases.

  Credit I (cheap) Credit II (expensive)
loan amount 50000,00 € 50000,00 €
Effective interest rate 2.99% pa 5.99% pa
running time 5 years 5 years
Repayment rate (per month) 897.32 euros 962.73 euros
Interest costs (term) 3839.16 euros 7763.76 euros
saving 3924.60 €

As the example impressively shows, you can save a lot of money especially with the modernization loan with a credit comparison.

2. The proof obligations

Depending on the provider, you must provide different proof of proof for your modernization loan. Some banks are already proof of the fact that you are the owner of a property, while other banks also want a clear proof of the modernization measures carried out. This may possibly entail further administrative work for you.

3. The funding opportunities

Some forms of modernization can be made particularly favorable by government subsidies. For this reason, you should always check before borrowing whether you can not combine your modernization loan with a government funded project. A good example of this is the Intrasavings bank program 151 (energy-efficient renovation):

Table 2: Presentation of the Intrasavings bank program 151/152, Source: Intrasavings bank.de (as of September 2018)

aspect statement
What is being funded?

The Intrasavings bank program supports all measures that lead to a Intrasavings bank Efficiency House standard. This includes:

  • Replacement of the heating system
  • Installation of ventilation systems
  • Renewal of windows and doors
  • thermal insulation
How is promotion?

The promotion is carried out by means of heavily discounted credit. The interest rate is well below the traditional market level.

Up to what amount will be funded?
  • Intrasavings bank Efficiency House Standard: up to 100,000 euros per dwelling unit
  • Individual measures: up to 50,000 euros per unit
Additional advantages

Depending on the efficiency house standard achieved, a repayment subsidy is granted. This ranges from 7.5 to 27.5% of the loan amount.

In addition, support programs exist for improving protection against burglary and regional support programs for various modernizations.

4. The other services

In addition to the interest rate and funding options, you should look out for a modernization loan on other services that might be of interest to you. This includes:

  • Free special repayments (very useful for additional income)
  • Free rate break (helpful in case of financial difficulties)
  • Digital complete application (very uncomplicated)
  • Also suitable for the self-employed (depending on personal situation helpful)

A residual debt insurance is also frequently offered for modernization loans. However, you should calculate exactly here, because the costs are often quite high. With a high loan amount of 50,000 euros and long terms, however, the effort can still be worthwhile.

Note: Since a residual debt insurance is not mandatory for a loan, the costs do not have to be priced in the APR.

Find your cheap modernization loan today!

Find your cheap modernization loan today!

If you are planning a modernization of your property in the near future, you can easily and conveniently realize the financing with a modernization loan. Just use our credit comparison and look forward to favorable conditions and corresponding services. In this way, you can save a lot of money and can customize the modernization loan exactly to your wishes and needs.