Perform renovations, expansion or embellishment can bring the need of getting a loan.
It is sometimes difficult to predict exactly the amount needed, despite the quotes made by artisans and builders.
In this case, and depending on the type of loan, what to do with the remaining sum?
Go read our tips on credit work before you start.
With an unassigned personal loan
For small jobs, the personal loan , sometimes called project loan, is ideal. Indeed, the sum borrowed is paid directly to the account, which allows to use it freely. There is no need to justify expenses, no invoices to purchase materials or labor to provide.
This allows, for work, to achieve all or part of the project itself, which is particularly convenient for the embellishment, decoration or small renovation. These personal loans, however, are limited to modest amounts and can not involve major work.
What to do with the money left??
In the case of a personal loan, if the entire sum is not used in the planned work, the remaining money can be used freely . As no proof is required, it can be used for anything else, from buying a used car to a trip, according to needs and desires.
It is also possible to consider an early repayment of the loan to reduce the amount of maturities or the duration of the credit. However, this may lead to additional costs that must be taken into account. They depend on the lender, the amount borrowed and the end date of the credit.
With a work loan
To carry out work of medium or large scale, the loan works will be the best choice. Although it is not as flexible as the personal loan, it often gives the opportunity to borrow more, and at better rates.
In addition, security on this type of loan is present, since if the provider does not honor its commitments, it is possible to cancel the loan directly. Finally, the work loan is often flexible enough to allow individuals to carry out part of the work themselves – it will then be necessary to provide invoices for the purchase of materials.
Good to know : work loans are limited to € 75,000. It is possible to associate them with subsidized loans, such as eco-loans at zero rates, for example.
What to do with the money left?
If part of the money is not spent on most of the work, it is possible with this type of loan to carry out additional projects. If, for example, renovations of a house are made, the remaining sum can be used for decoration, change of household appliances, installation of a gate or an intercom …
As long as the money spent has a link with the work done and it is possible to justify expenses with invoices, this is not a problem. Before incurring expenses for this purpose, however, always check with the credit institution whether there are any restrictions or special rules to be complied with.
With a mortgage
For works of more than 75 000 €, it will be necessary to go through a mortgage . If, again, the conditions are more restrictive, the rates will also be more interesting.
With this type of loan, it is necessary to precisely predict the amount of work to be done and it is often mandatory to go through a professional provider. Indeed, unlike the other types of credits presented, it will not be possible to expand the use of the remaining money to any other type of project. Depending on the credit institution, these conditions will be more or less strict and it is advisable to consult in detail the signed contract.
What to do with the money left?
The unspent money from a real estate credit for work will either have to be repaid early or used specifically to give more scope to the planned work. In the latter case, for example, it will be necessary to consider using higher quality materials or buying the best equipment.
If the original project only concerns part of the house, it will be possible to extend the work to other parts of the house. However, for each modification of the project, it will be necessary to consult beforehand the crediting agency of the sum of money.
Assisted work loans
In the specific case of assisted work loans , such as the zero-rated eco-loan, which is the most popular in the case of insulation work or for any other improvement in energy performance, the sum lent can only be spent very strictly. for the planned project. It will not be possible to expand the expenses to any other part of the work.