Loan for home improvement

[FussyEater]

Hi
How much is enough for improvement of an old home?
I need an approximate sum of money that I should borrow

[ShortShot]

Which bank can you recommend me?

[IsaacBrown]

Hi, pal. Frankly speaking, it's a difficult question. I mean, that there are different situations, where it would be better to take a common loan in one situation, and where it would be better to take home loan in the other one. Generally, home loans are pretty cheap, so are more profitable (nobody wants to spend money, when there is a possibility to save them), but even I have seen the common loans, which was better, than the home one. I can recommend you one site, where I took the loan in 2019 year for repairing the house - https://www.moneyexpert.com/loans/home- ... ent-loans/. Of course, I compared all the variants with their lending rates before, so I had clear imagine and the plan what to do. I will try to answer all your questions, if you give more information.

[Trevohis]

Any more information ?

[VictoriaSanderson]

Well, it really depends on how big is your house and what you want to do with it. If you want to totally change the look of your house, it is going to cost you a ton of money. If you want just to paint and repair somethings it can cost just a couple hundred bucks! For example, my neighbor renovated and improved his house only for 1000$. He took a loan and he renovated it in just half a year. About how big the loan should be, well, it matters if a bank is going to accept how big is the loan. I suggest you use http://friendlyfinance.co.za/, there you can read information about loans for renovating and how big these loans can be.

[JoanneCameron]

Well, it really depends on how big is your house and what you want to do with it. If you want to totally change the look of your house, it is going to cost you a ton of money. If you want just to paint and repair somethings it can cost just a couple hundred bucks! For example, my neighbor renovated and improved his house only for 1000$. He took a loan and he renovated it in just half a year. About how big the loan should be, well, it matters if a bank is going to accept how big is the loan. I suggest you use http://friendlyfinance.co.za/, there you can read information about loans for renovating and how big these loans can be.

Where can I find some more feedback?

[endy7]

Any more information ?

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[nickyjames]

informative

[ShortShot]

Before understanding how loans work, let us see how Banks manufacture the loans or how banks get money to give out loans.
Banks get money from four major sources

Capital: At formation as well as later, Banks raise money in the form capital from shareholders.
Loans: Bank take loans from other banks, multilateral organisations like IFC or Individuals . They can be in the form of normal loans or debentures and bonds.
Deposits: This is the major source of funds for the banks. Banks get retail deposits from individuals and companies.
Retained profits: Profits also forms part of cash formation.


Banks cannot use entire money in giving out loans. Part of the money has to be invested Government securities and deposits with Central Bank (RBI in India) as per local rules. Part of remaining money is deployed in giving out
loans.

Interest: To use the money of the banks , bank charge interest to the borrowers. Rate of this interest varies from borrower to borrower. Banks have something called Base Rate below which they do not lend to anyone. Rates are decided depending on quality of borrower, purpose of loan, Underlying asset of loan, tenure , government guidelines etc.

For instance if base rate is 10 % and if banks think home loans are safe then they may charge only 10.25% from home loan borrowers but 12 % from Gold loan borrowers. Similar philosophy works for corporate borrowers too. AAA+ borrower in Tata Group may be charged 9 % interest rate but shaky real estate company may be charged 18 % interest rate.

Repayment: Loans have to be repaid by the borrowers within given term called tenure of the loan. Repayment can work in various ways which is decided at the time of loan.

EMI : Home Loan, Vehicle loan and personal loans are returned in the form of EMI, where all instalments are equal and each instalment has part principle repayment.
Corporate Loans: Typically corporate loans have moratorium period ranging from 6 months to 2 years or more. This period is to allow the underlying asset to be operational. In this period interest is payable but not principle. After moratorium period is over, principle payment also starts. Typically principle repayment keeps on increasing every year ending at the tenure.
Bullet Payment: In this Money is returned in one or more, equal or unequal instalments at the end of tenure. E.g. A ten year loan is repaid in three instalments at end of 8th, 9th and 10th year.


Defaults: Not all borrowers are able to pay back the loan and a few borrowers default after some time. Depending on case to case banks try to recover the money by different means.

I hope this was useful.

[runningman]

As mentioned above, situations are different, which is why I would recommend you not to rush to a decision because in this business there are always a lot of details that need to be taken into account. I am fully confident that the Mortgage Broker Cardiff will help you with this case, which was useful for me last year when I took out a loan for my business. I know that the situations are different, but this specialist is aware of the knowledge in both areas, so be sure that it will be useful to you