Cheap work loan: Where to find the best deal?
What is the work loan?
Do you want to carry out work in your current home or in your future home but you do not have the necessary cash to carry out your projects? The work loan is there to help you finance these expenses, whether it is to redo your kitchen, expand your house, renovate a room or do insulation work to reduce your energy bill.
There are several types of cheap work loan:
- The work loan in the form of a personal loan
The work loan in the form of a personal loan, also called consumer credit, can be offered by all banks and credit organizations. It can be taken out for any type of work, whether done by a professional or by yourself. The amount of the work credit must be less than or equal to $ 75,000, with a duration equal to or greater than 3 months, without exceeding 10 years. The rate of the work loan will be a fixed rate, which will be around 4 to 5%, which will depend in particular on the amount borrowed and the duration of the loan. The repayment schedule is defined in advance, on the basis of fixed payments. This relatively simple option attracts a lot of borrowers. No contribution is necessary to apply for a work loan in the form of a personal loan.
If you wish to carry out specific work such as insulation or renovation work, there are also renovation work loans or insulation work loans, which can be granted with more advantageous interest rates than the work loan.
With a personal loan for work, it is possible to finance your work, even if you do it yourself, without having to provide supporting documents, such as invoices for the purchase of materials. If the work is done by professionals, you do not need to provide invoices either.
The funds requested will be released as soon as your work loan is accepted.
- The work loan in the form of a mortgage
The mortgage type work loan must be greater than 21,500 US dollars. It is preferred if you have to carry out major masonry, plumbing, electrical work or if you need to rearrange an attic, install a kitchen or a veranda. The terms authorized for this type of cheap work loan may be longer than for the personal loan type work loan, but you will have to justify the use of the funds. You will need to provide your bank or your credit organization with a minimum estimate of US $ 21,500 to be able to apply for a cheap work loan. The main advantage of this loan is that the interest rates are often lower than those of personal loans for work. The deadlines for obtaining funds are longer for this work loan because you have a cooling-off period of 10 days before making a commitment. You will also be asked to provide in addition to quotes, invoices to justify the use of funds.
- Assisted works credits
The 0% work loan is generally in addition to a real estate acquisition loan. It is possible to subscribe to a zero-rate work loan, for work to be carried out as part of the purchase of a home. Also called PTZ, this loan makes it possible to finance the purchase and possibly work during the acquisition of a new house, of an old housing whose work represents 25% of the total cost of the operation. You will have to justify your expenses and provide the invoices in order to release the necessary funds for the work.
The zero-rate eco-loan will be preferred if you want to carry out work to improve the energy performance of your home, for a home built before 1990. This loan will be granted to you under conditions of resources, for a maximum amount of 30,000 US dollars, over a period of up to 15 years.
Who is the work loan for?
The work loan is accessible to all, subject to the eligibility conditions of each bank or credit organization. Your guarantees must be solid to obtain your work loan, that is to say, you must have a stable job, good and regular income, have good savings capacity, and not be registered with the bank of United States .
In the event that your work loan application is accepted by the financial institution, you will receive a loan offer, in which all the characteristics of your credit will be set out. Take the time to read this loan offer, and ask any questions you want before committing.
How to find a cheap work loan?
In order to help you find the cheapest work loan, we advise you to compare the different loan offers via online comparators. You can also make a request at your bank, or at a bank where you are not a customer.
To compare the offers via a simulator, you will need to fill out a form with some information about your project:
- the amount of the desired work loan as well as the type of work to be carried out,
- the duration of the loan
- your profile: your family situation will be asked of you, as well as your date of birth, the date of birth of the co-borrower if you borrow from 2, the number of children you have in your care, the name of your bank as well as the year you opened your bank account, and the type of bank card you have. Your professional situation will also be asked of you, namely, your profession as well as your sector of activity, the type of your employment contract (CDI, CDD, interim ...), but also your income as well as the amount of your rent or your mortgage, if you are a tenant or owner.
Once all this information is entered, the simulator can offer you several cheap work loan offers, the most advantageous rates, the highest interest rates. Of course, the credit rate is not the only criterion to be taken into account, it is also necessary to compare the various costs of each bank or credit organization.
According to a barometer from January 2017, the average rate for small jobs, between 3,000 US dollars and 9,999 US dollars, varies between 4 and 10% for a period of between 12 and 72 months, and the average rate for large jobs, between 10,000 and 30,000 US dollars, varies between 2 and 5% for a loan term of between 36 and 96 months. (Rates observed between October 1, 2016 and January 1, 2017).
Regarding the rate, we must distinguish between the posted rate, which we can call the TNC (the Conventional Nominal Interest Rate), which can be attractive, and the APR, the Global Effective Annual Rate, which gives a precise indication of the total credit, including insurance. In fact, the lower the interest rate, the less money your work loan will cost you.
To be sure that you choose the best work loan offer, and therefore the cheapest work loan, the best indicator to take into account is the total cost of the credit. For two identical amounts and two identical loan durations, choose the organization that will offer you the lowest total cost of credit.
There are also criteria which may be important regarding the choice of the bank or the credit institution. Indeed, some financial institutions may offer you some flexibility regarding your monthly payments, such as the possibility of postponing a monthly payment in the event of a hard blow, or to revise your monthly payments downward or upward. It is important to note that the more you postpone your monthly payments, the longer the duration of your work loan will be, and the higher the total cost of the loan will be.
When you have chosen the most advantageous work loan offer, all you have to do is apply, which you can usually do online, or at the bank you have chosen. The bank or credit institution will ask you for documents to provide, such as a photocopy of your identity document, your latest pay slips, proof of address, your last tax notice, as well as your latest bank statements.
Once your application for a cheap work loan is sent to the chosen credit organization, it will be able to determine, depending on your financial situation, whether or not it grants you the loan. Banks and credit organizations will ask you to prove a stable job and sufficient income. They may refuse you for example the amount requested, or the desired duration, but offer you another personal credit offer, with a lower amount, and a longer credit duration.
The work loan remains a credit, so you agree to repay it. It is therefore necessary to check your repayment capacities before committing yourself.