After a new move, we may want to do some work to make the framework more user-friendly. It is also possible that renovations are needed in a house that is getting older. To finance these works, one can decide to draw on one’s savings or to resort to a credit. In the latter case, the most requested credit is the work loan. Many households do not hesitate to turn to specialized organizations to obtain it. However, it is important not to launch yourself blindly. Understanding the credit works is essential to choose the one that is adapted to the project to realize. The steps taken by the borrower to obtain it must also allow him to get a loan with the best conditions and at the best rate. Follow this guide that goes through all aspects of credit work to find out what you stand for.
The credit works: Munico?
Do you want to renovate or develop your home or apartment? The dwelling concerned may be a principal residence or a secondary residence. Rental housing is also not excluded. Whether it’s the kitchen, the bathroom or any other part of your home, the credit works is the ideal loan to finance your work. This is a loan typology that belongs to the big consumer credit family. The term “loan work” is a trade name that includes in fact all the consumer credit that you can contract to finance your various work at home.
What are the eligible works?
The credit works is also suitable for a simple renovation in your home that for large works. Whether you own or rent, you can use it for essential work or comfort. In practice, here is a list of eligible jobs for this type of credit:
- Extension work;
- Development work (dig a pool, install a roof window, install a wooden deck, convert the attic into living space …);
- Maintenance work (plumbing, masonry, electricity, carpentry …);
- Renovation work (repairing the roof, repairing a broken glass, replacing the insulation of walls and attics, laying new tiles, etc.);
- Decoration work …
What does the law on credit work?
As a consumer credit, the loan works complies with the various provisions in force for this category of credit. Thus, the conventional limits and ceilings remain in force. The amount you can apply for is therefore limited to 75,000 USD. Moreover, its grant is fundamentally conditioned by the solvency of the applicant. When the conditions are met, the signature of the contract must be preceded by an offer. It is this offer which presents to the borrower all the exact characteristics of the credit he wants to subscribe. In practice, you must find the following information:
- The amount of the credit;
- The interest rate ;
- The amount of monthly payments;
- The duration and periodicity of repayment …
The suspensive clauses and the terms of the advance settlement must also appear on this prior offer. According to the law, the borrower is also entitled to a withdrawal period. During this period of 14 calendar days, he can give up the loan without having to pay any penalty. He is also not obliged to inform the credit institution of the reasons for his withdrawal. In addition, the early repayment of the work credit of up to $ 10,000 over one year is not subject to any penalty. But, beyond this amount, the credit institution can claim compensation.
It is good to know the legal limits of the loan works. However, the most important factor is determining the amount you can safely borrow. Indeed, the amount requested should not tip your financial situation in the red. To do this, the credit institution will have to check your debt capacity before granting you the loan. The maximum debt ratio generally considered is 33%. In other words, the sum of all monthly payments of your current credits, plus the new monthly payment, must not exceed 33% of your income. However, lenders do not only consider this ratio. Some use in addition to other efficient indicators that make it easier to study the borrower’s file. The rest to live is the most used indicator.
What are the different types of loans work?
Before going around the subject, it is good to know that there are two major categories of credit work. On the one hand, there are classic work credits. These are loans offered by the various credit institutions. On the other hand, there is a distinction between loans and assisted work. These can also be contracted with credit agencies. However, these assisted loans are set up by the state that has signed an agreement with these organizations.
Classical work credits
Classical work loans are highly diversified. There is a multitude on the market, and each corresponds to a specific need. You will choose according to your expectations and the amount of operations.
The unallocated personal loan
Appreciated by consumers, the unassigned personal loan consists of a freely usable sum. The flexibility of this formula is the factor that justifies its popularity with individuals. No justification for the allocation of funds is requested from the borrower. You can contract and use it to finance work in your home.
This type of loan is suitable for those who wish to carry out the work themselves. In fact, to subscribe to the unallocated personal loan, no invoice for the materials purchased is claimed. It’s the same for the workforce. Many people also opt for this loan because of the quick release of funds. As soon as the loan is signed, the money is immediately made available to you. However, it should be noted that the interest rate of the unsupported personal loan is higher than that of the affected loan. In fact, the risk taken by the lending institution is higher since no document justifying the work is presented to it.
The assigned loan
The assigned loan is the credit reference works. Formally, we are talking about credit allocated to the realization of work. For this loan, the amount granted depends strictly on the amount of the works. Indeed, credit must be used specifically for a specific project. No other destination is possible for the sum received. To do this, the lender claims you the supporting documents of the work to be done. In practice, you must submit quotes and invoices from the company, the professional or the craftsman chosen to carry out the work.
In addition, the assigned loan is a tailor-made solution that protects the borrower. Unlike personal loan without proof, it is possible to cancel the contract of an assigned loan when the provider does not respect its commitments. For this type of loan, the funds are paid at once, and the rate applied is generally lower than that of the unallocated personal loan. However, for any of these loans, the repayment term must be greater than 3 months. It can however reach 5 years, even 10 years.
The revolving credit
The revolving credit is in the form of a cash reserve . It is always available after subscription, so that the borrower can draw at any time. Its particularity is that it is reconstituted after each reimbursement of the amounts consumed. It is often associated with a loyalty card, payment or withdrawal. If this credit is obtained very quickly, it should be noted that financial institutions apply it very high rates.
The revolving credit, also called revolving credit, is a loan without proof . So, the subscriber can use the money obtained to finance work. Nevertheless, it is not advisable to take out a revolving loan as credit works because of its unfavorable characteristics.
Another solution to finance works is the grouping of credit. Borrowers who think of it are scarcely numerous. Yet, you can take advantage of the redemption of your current credits to finance work in your home. The credit redemption allows the individual to end up with a single credit that includes all others. Now, the latter will only have to repay reduced monthly payments for this credit only, but over a longer period. This strategy allows the borrower to readjust the monthly payments to his financial capabilities.
During the transaction, the borrower may apply for additional financing from the redemption institution. This funding will correspond to the amount of work to be done. However, the institution may refuse to grant funding if the financial situation of the applicant does not lend itself to it. In any case, you will not lose anything to try this option if you have different loans in progress.
The mortgage can only be used to finance two types of projects. This is the acquisition of real estate and the completion of the work. That said, the condition required to qualify this loan financing is that the amount is greater than 75,000 USD. Thus, the credit work adapted for projects whose amount exceeds 75 000 USD is the mortgage. The latter has several advantages, including:
- The application of a low rate;
- A repayment period of up to 30 years.
However, this type of credit often requires a guarantee. Generally, the lender claims one of the following guarantees:
- A bank guarantee;
- Mutual guarantee;
- A mortgage on the real estate concerned by the works;
- A pledge.
Loans supported to finance various works
Before addressing the details of the loans assisted work, it should be noted that they are all tunable under conditions. These requirements generally relate to:
- Capping of resources;
- The nature of the accommodation;
- The financial capacity of households;
- The energy performance of the building …
For these reasons, their rates are usually lower than those of conventional work loans. It is also possible to take out subsidized loans with zero rates.
The loan works at zero rates (PTZ)
As its name indicates, the zero interest loan allows you to have financing whose repayment is perceived without interest. You repay only the capital obtained. It is a loan that promotes access to housing for many French. It is used to finance:
- The acquisition of housing;
- Work on new housing or existing social housing;
- Carrying out work on commercial premises to be converted into housing;
- The completion of work on old properties that need to be renovated.
Eco-loan at zero rate (eco-PTZ)
The eco-PTZ is also an interest-free loan granted to owners and co-owners. Only dwellings completed before 1990 are eligible for the zero interest eco-loan. It is especially granted for energy renovation works. There is an official list that traces the specific work for which this loan is intended. In addition, the work must be done by professionals. The amounts granted vary from 10,000 to 30,000 USD, and no income requirement is required. The amount obtained can be repaid over a period of 3 to 10 years. However, this period may be extended to 15 years in some cases.
The Social Accession Loan (PAS)
The Social Accession Loan is a subsidized credit reserved for the financing of energy saving works. It is in the amount of 4,000 USD and is valid for work in a main residence. Targeted at low-income households, this credit can be used to buy or build a new home. However, it is not forbidden to use it to acquire an old property that requires work.
CITE, a credit granted for the energy transition
Capped at 8,000 USD per year for one person, the Tax Credit for Energy Transition (CITE) allows households to improve the energy performance of their homes. It is 16 000 USD for a couple. Its application possibilities are diversified, and it is accessible to both owners and tenants. However, there is a list of equipment that will have to comply to have this credit.
The loan agreement
This loan is generally in the same context as the SAP. It can thus be used to finance works aimed at reducing the energy consumption of housing. However, you can also use it to buy real estate or renovate. Granted without means test, it is possible to repay it over 5 to 35 years depending on the situation.
In addition, the loan agreement does not require any personal contribution. You can use it to finance all the works. It is also easy to access, and applied rates are generally interesting. In practice, the interest rate of an agreed loan, contracted for a duration of less than or equal to 12 years, can not exceed 3.25%. In addition, administrative fees and notarial fees are reduced for this type of credit.
Home Improvement Loan
This loan can be requested by any household that receives a family allowance. However, those receiving the following aid are not concerned:
- Allowance for disabled adults;
- Housing allowance for people without children;
- Personalized housing assistance.
At a rate of 1%, the home improvement loan can only be used to finance the work in your principal residence. It is obtained without condition of resources. However, the loans are limited, so that sometimes these conditions are taken into account in granting credit to the applicants. Depending on the cost of the work, it can reach 80% of the projected expenses. Nevertheless, the amount granted can not exceed 1,067.14 USD. You receive half of the loan for the signature of the contract by presenting the estimate of the works. The other half is assigned to you on presentation of invoices that justify the execution of the said work.
The housing savings plan (PEL)
The home savings plan can be used to apply for a loan with a preferred rate. In addition, you can get a state bonus. That said, to qualify for these benefits, you must meet certain conditions such as having opened your ELP before 2018. In addition, obtaining the loan is necessarily preceded by a minimum savings period of 4 years. With the ELP, a member of your family can assign you their rights to loan. Thus, you can apply for a higher loan amount by accumulating these rights to yours. But, the work to be done must concern your main residence.
The loan from the National Housing Agency (ANAH)
The loan granted by the ANAH is part of a program entitled “Living Better”. This is a financial assistance that applies for certain works whose purpose is:
- Improving the energy gain of the habitat;
- Improving the safety or health of housing;
- Adapting housing to people with disabilities
This credit is capped at 20,000 USD or 30,000 USD depending on the work. You must justify that the energy reduction sought is at least 25% before obtaining it. This loan is intended for low-income households and applies to work in a principal residence that is at least 15 years old.
The loan of energy suppliers
Electricity and gas suppliers also offer green loans to individuals to encourage energy performance in homes. From a loan amount ranging from 10,000 to 30,000 USD, the rate applied is less than 3%.
The advantages and disadvantages of working loans
Since there is a multitude of credits work, its advantages as well as its disadvantages are the same as those of the chosen credit. However, it is possible to combine these strengths and disadvantages of credit work to get a better overview.
The benefits of credit work
Among the many advantages offered by the credit works to individuals, we can mention:
- The possibility of cumulating this loan with the PTZ and other work credits;
- The tax deductibility of credit works according to the type of loan;
- Adaptation to any type of work in a dwelling;
- The ease of obtaining a personal loan without proof to perform work in his home;
- The best rate applied to a credit allocated for works;
- Automatic cancellation of the assigned loan in case of non-completion of the planned work;
- The advantageous cost of the loans aided …
The disadvantages of the loan works
Despite the benefits, the work credits are not free of drawbacks. Here is a non-exhaustive list of the disadvantages often noted for this type of loan:
- The obligation to provide all supporting documents for the work to be done to obtain an assigned credit (the flexibility of the borrower is limited, although a renovation project is usually accompanied by unforeseen it will also be necessary to finance);
- The impossibility of applying for a personal loan of more than 75,000 USD to carry out work;
- The cumbersome administrative formalities related to the loans aided …
How to find organizations that offer credit work?
Thanks to the internet, the world of consumer credit has undergone a great revolution. Since then, specialized institutions have emerged on the web. Their numbers are increasing to the point where they almost supplant banks. Banks, however, were the traditional lenders to which all individuals resorted. Today, consumers are more comfortable searching the internet for certain types of credit. The loan works is one of these credits. Although this loan is much more solicited on the web, traditional institutions also have a significant market share. Concretely, to contract a credit works, you can address to the following institutions:
- Banking institutions;
- Specialized financial companies;
- Online companies;
- Loan brokers;
- The aid agencies.
As the number of applicants continues to grow, the market has become very competitive. Each organization therefore has policies in place to attract as many clients as possible. The borrower must then take advantage of this situation to get the best credit for his work. For example, loan brokers can help you find valuable work credits. They are usually responsible for submitting client files to multiple institutions. In this way, it is easy to bring out the most competitive proposition. When the credit applicant is satisfied with an offer from the broker, he will have to pay the broker a small commission. In addition, it is possible that the borrower has no brokerage fees to pay. This is the case if the broker is a business provider for the credit institution.
Instead of entrusting the search for your credit to a loan broker, you can choose to take the steps yourself. Simulators and online comparators will have to be your ally to get the best loan work. However, vigilance must be in order. In fact, some organizations do not hesitate to put forward offers with very attractive terms and rates. But, these offers that seem favorable hide many costs disadvantageous for the borrower. So be careful!
General conditions for obtaining a work credit
It is essential to have a fairly clear idea of the various rules that apply to your project. In addition to planning rules, it is also important to know the conditions for obtaining a work credit according to the types of owners. When the property concerned is a co-ownership, it will notify all other owners before engaging in any work. In reality, it is not possible to do some work in common or private areas.
In addition, it may be that your project aims to expand the home. In this case, be aware that the creation of a new living space must be submitted to a declaration of work at the town hall. In addition, the dimensions of this new construction must be such that the base area is less than 20 m2 (or 40 m2 in some cases) and the maximum height is 1.80 meters. Beyond these dimensions, you must obtain a building permit before carrying out the work. On the other hand, small jobs do not require prior authorization. These are projects such as:
- Decoration work;
- Work to bring electricity up to standard;
- The renovation work of the bathroom …
As for the completion of the work itself, who will do it? Is it a business, a craftsman, yourself or a mix of the three? The probability that the lender wants to have only one craftsman or master builder is very high. Therefore, you should check with the credit institution to find out what is happening. As for the credits helped work, know that they concern only the works carried out by a company. In all cases, to benefit from a credit assigned to the work, it is necessary that the companies or craftsmen solicited are recognized “RGE”. The RGE label stands for “Recognized Guarantor of the Environment”. It is a guarantee of quality that identifies artisans and other building professionals. On the official Rénovation Info Service website, a directory listing all the recognized RGE professionals is at your disposal. You can consult it to find a certified professional near you.
The steps needed to find the best loan works
The important thing is not to do everything to get a credit work. It will rather do everything to find the best credit work. When we talk about better credit, we refer to the low rate and other advantageous terms of the loan. There is however a plethora of credit offers works on the market. Just as it is difficult to find a needle in a haystack, so it is painful to find a credit work cheaper . However, using the right means, a few minutes are enough to succeed.
The online simulator, an effective tool to find the credit works best suited to your needs
Online prospecting for the best offer is the most popular solution nowadays. In fact, the simulation tools allow the person looking for a loan work to identify the most suitable credit for his profile. With an online credit calculator, you can determine the credit characteristics that best fit your financial situation. Better, this same simulation will take into account the type of work you want to achieve in order to highlight the most suitable credit.
In practice, with a personal loan simulator work for example, you have at your disposal many tools to calculate your debt ratio. In addition, you can use it to simulate the amount you can claim. To do this, you only need to vary the amount of the monthly payments or the duration of the credit until you obtain the values that suit you. Similarly, you can fill in the appropriate fields of the simulator to calculate the duration of your credit and the monthly payments that go with it. Once you have determined the ideal credit, it only remains to send your request to lenders who offer similar offers. Again, it is possible to use an online credit comparator so as not to take the short straw to find the right lender.
The credit comparison: an essential step to get the credit work the cheapest
Why do you have to go through the comparison of offers when choosing your credit works? It’s very simple: the conditions are very variable, and the supply is quite wide. Online credit comparators are tools that help you take advantage of market competition. In concrete terms, the variation in the rate of the same credit for different institutions can be 2%, 5% or even 8%. In addition, promotional offers are not lacking throughout the year. So you have to make the most of it by careful sorting. This is where the online credit comparator comes in .