Flat renovation loan – where to look for funds?
Sooner or later owners of apartments or houses face renovation. The scope of work may vary, but always involves costs. While a small renovation can often be financed from your own funds, a larger one often requires borrowing money. Poles usually start repairs in the spring. On the one hand, the weather is conducive to it, on the other – they want to finish work before the holiday trips.
As shown by the results of our last year’s research, 24% of Poles renovate when winter ends and they are mostly residents of towns of up to 50,000 Half of them are people over 36 years of age. Interestingly, renovation works are carried out in 75% of cases, and finishing works in others.
Mostly, the total area under renovation is 21-40 sq m
This is due to the fact that if Poles decide to renovate, they try to carry out work in the whole apartment or house. Of course, this is not always possible. Then they are often limited to renewing the room and hallway, and less often the kitchen and bathroom.
By the way, it is worth noting that in 45% of cases repairs are also accompanied by the replacement of the electrical installation, and in 30% – plumbing. We are not able to do all the work ourselves, which entails additional costs in the form of a professional fee. If Poles decide to hire a specialist, they usually order tiles (48%), plasterboard assembly (32%) and plastering (18%).
Such services are not cheap, for example, laying tiles on an area of 61 sq m. ranges from approx. 2.4 thousand up to 4.7 thousand USD and the replacement of the electrical installation at 49 points will cost 4.4-5.5 thousand. USD. 1 In this situation, often the person planning renovation needs to obtain additional funds to finance the work.
Is it worth borrowing at the bank?
A loan for refurbishing an apartment can be a good decision to implement your plans without jeopardizing your home budget. Looking for a way to raise money, many people will instinctively go to the bank, especially where they have an account. Is this really the best solution? Not necessarily.
More and more Poles are aware of this, as the following data shows. In 2016, our compatriots took out 2.9% less consumer loans in banks and credit unions than in 2015, and their number dropped systematically in all quarters of last year. This situation mainly concerned loans up to 50,000. USD. two In the case of lower amounts, many Poles simply give up bank loans.
This is often influenced by complicated and, above all, long procedures at the bank, the need to prepare many documents, including earnings and employment certificates from the employer. In addition, banks prefer clients employed under employment contracts (preferably for an indefinite period), and yet many young Poles are still working on civil law contracts.
The non-bank market as an alternative
However, a home renovation loan can easily be taken on the non-banking market. The offer of loan companies is often associated with low-value, quick loans, but in reality, it is a bit different. – The offer of non-bank loans in Poland has developed significantly in recent years.
Loan companies, such as ours, are no longer limited to offering only so-called payday loans for e.g. 30 days, but more and more often they are preparing an installment loan offer, the repayment of which is spread over several months – notes specialist Good Finance Bank.
Thanks to this, the borrower can easily finance larger expenses, for example, renovation, gaining money quickly and without complicated formalities – adds representative Good Finance Bank. Research shows that these last two issues are of great importance to Poles.
Interestingly, 10% of loan company customers declare that in the past they also had bank loans, but currently, they only borrow money on the non-bank market. 4 Renovation of an apartment or house does not have to be a nightmare and does not have to significantly affect the home budget.