Measures for modernization
A modernization loan is characterized by the fact that it is earmarked. It can therefore only be used for measures that are carried out as part of a modernization and is only awarded to property owners.
The modernization loan does not differ from conventional loans in terms of repayment modalities. An advantage with this type of loan is that the interest charged by the bank is usually significantly lower than with a normal installment loan.
In Section 555b of the German Civil Code, the legislature has laid down which construction measures are to be regarded as modernization measures.
Conditions the individual banks sometimes offer better or worse conditions. Above all, these include:
- possible amount of the loan
- different terms
- any necessary equity capital (for very high loan amounts)
Loan comparison offers
A comparison of different offers is advisable because, as a borrower, you naturally want to get the best possible contract terms for your loan.
If you need money to modernize a property, you can use the online loan calculator to find out about the costs of a modernization loan. You only have to enter the following information in the form of such a calculator:
- Amount of the loan
- Duration of the term
In order to get the right results, it is imperative to tick “Renovation” or “Modernization” or click the corresponding button.
This is necessary if the measures in accordance with the legal requirements serve to create completely new living space, reduce energy consumption, increase the value in use or sustainably improve the quality of living.
- The credit calculator only uses the correct interest rates and indicates the corresponding offers from the various banks in the results list, only when it is stated that modernization is at stake. If you forget this information, you get wrong conditions because the interest rates are used for conventional loans.
Building finance no entry made in the land register. A mortgage is not a requirement for such a loan. This is advantageous because the borrower saves money because a land register entry is also subject to a fee.