Do you want to realize an extension, but have you not saved enough money? A loan may offer a solution. We advise you to opt for a personal payday loan or a revolving credit. Whichever loan type you choose, always compare in advance on interest and conditions. In this way you know for sure that you do not pay unnecessarily much for financing your development!
Financing expansion – Choose the right loan form
Nobody likes to pay a lot of money for their loan. To keep the costs of a loan for an extension as low as possible, it is first of all important that you choose the right loan form:
Financing construction with personal payday loan
Financing an extension with a personal payday loan is especially smart if you know exactly in advance what the extension will cost. You then borrow a fixed amount at a fixed interest rate. You then repay this amount in installments until the entire amount including interest is repaid. It is a clear and secure way of borrowing money for expansion.
Tip! Do you borrow money to expand your home? Then the interest on a personal payday loan is deductible.
Financing development with revolving credit
A revolving credit, on the other hand, is very suitable if you do not know in advance exactly how much the expansion will cost. With a revolving credit, you can withdraw and repay unlimited amounts up to a pre-agreed amount. You only pay interest on the amount actually withdrawn. This is favorable when the expansion works out more favorably.
Pay attention! With a revolving credit, there is a risk that you will withdraw money and use it for other purposes! You then borrow more than you originally intended. Some form of self-control is therefore necessary.
Borrow money for expansion, what else should you pay attention to?
Now that you know which loan type best suits your situation, it is important to find the most suitable loan. You do this by paying attention to the conditions and duration:
- Conditions – Every lender has different conditions. Make sure you read this carefully. For example, pay attention to whether you can repay the loan in the meantime and whether the remaining debt will be canceled in the event of death. These conditions prevent the loan for your extension from unexpectedly becoming more expensive.
- Duration – Always select the shortest possible duration. The monthly costs are therefore slightly higher, but you have repaid the loan earlier. This ultimately saves you a lot of interest costs.
Pay attention! There are lenders who give a discount on the interest if you borrow money for an extension. However, these loans have restrictive conditions. For example, you must first request permission from the lender before you can sell the property!
Loan for construction, how much should I borrow?
Exactly how much an extension costs depends on the number of square meters, the finish level and the materials to be used. However, you can assume that an average construction costs between 1,200 euros and 2,600 euros per square meter. An extension of six meters wide and two meters deep therefore costs you around 25,000 euros on average.
Tip! Do not automatically borrow from your regular bank. Online lenders are probably a lot cheaper. It sometimes differs up to 4%
Alternative lending money development
In addition to a loan, there is another way to finance an extension, namely through your mortgage. The advantage of this is that the interest is probably lower and deductible. On the other hand, raising your mortgage entails costs and you may not repay extra in the meantime.