Most people who do renovations to their homes finance this through a second mortgage or by increasing the current mortgage. This seems the most logical way, but it is usually cheaper to finance a renovation with a personal payday loan.
In addition, a personal payday loan is also more sensitive because the term of a mortgage is relatively long compared to the lifetime of a renovation. If you take out a personal payday loan, the loan is repaid by the time you are ready for a new bathroom or kitchen.
The differences in a row
Although the interest on a mortgage is often lower than on a personal payday loan, you still pay more interest when you finance your renovation through a mortgage. This is because the term of a mortgage is much longer, usually 30 years, and you, therefore, pay interest for longer.
Another difference between taking out or increasing a mortgage and a personal payday loan are the costs that you, as a homeowner, must incur for taking out a mortgage. The appraisal of your house by the broker, the settlement at the notary and the mortgage advice also entail extra costs.
A personal payday loan does not include these costs
This means that a personal payday loan, despite the fact that the interest rate is usually a fraction higher than the interest rate on a mortgage, is in most cases a cheaper option for financing your renovation.
The current interest rate for a personal payday loan is fixed at 4.1%, 10 years.
Are you wondering if a personal payday loan is also cheaper in your situation? Calculate what is possible for you in our online calculation tool or request your free quote directly.
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