The smartest deal for a flat renovation in Hungary

Since more and more people are resorting to personal loans when it comes to renovation, Bankmonitor compiled a list of the most optimal credits, reports hvg.hu.

During the past couple years, the interest for personal loans has become half of what it used to be, thus it is worth to take on a loan for purposes that were too risky in the past. According to a survey conducted by a  merchant bank, more apartment renovations are carried out with the help of personal loans than before, and the interest rate is growing as well. The reason for this is that offering a margin is not necessary when it comes to personal loans, and that the money can be spent on anything. However, because of this, the interest is higher, so the initial sum for the regular payments is more as well. The question arises: is it worth the price to use personal loans for renovation purposes, or should housing loans be used instead?

How should the decision be made?

Housing loans are primarily taken when someone wants to buy a real estate, or build, extend, renovate, but in some cases they are used for loan conversion. You will have to present a margin, even if your goal is to renovate your home, and the margin will have to be acceptable for the bank. You can expect the bank to give you a loan that covers 60-70% of the estimated expenses.

The terms for the margin are the same with mortgage equity withdrawals, the difference is that you have more options to use them for, but you still have to be clear about your goals when you apply for them. The advantage is that you can spend it on renovation as well (or anything else). The advantage of the personal loan, however, is that with less paperwork, depending on the bank, you can acquire it in a couple hours. The sum of the loan can start at a couple hundred euros, but it can extend to over twenty thousand euros.