If you are thinking of renovating your home or business this year and you do not have enough money to afford them, we invite you to read the following article, Refactionary credit What is this loan about? It could be an excellent option to accommodate or renovate those parts of your home that are in poor condition.
A refurbishment loan allows the owner to increase the initial value of his property
Refactionary credit: What is it?
Regardless of whether it is a new or old property, it is important that the owner invest in the repair, modernization or construction of the building in order to increase its initial value. However, sometimes there are not enough funds to pay for these modifications, making the decision to request financing from a specialized entity, called a refurbishment loan.
We must know that its name comes from repair, which is directly defined as a repair. So when we talk about refurbishment credit we refer to the loan requested to carry out repairs, construction or conservation of a property, which is usually for the agricultural, livestock and industrial sectors, but can also be requested for home renovation.
This type of loan is also used for the amount of material needed in the construction or renovation of the building, using similar concepts or adequate amounts for said work. That is, when an individual requests this type of loan, it is to be directed to the rehabilitation of a specific space or building or to acquire the necessary material for this renovation.
Characteristics that the refactionary credit possesses
This type of credit has two types of fundamental characteristics, which are based on the use that is going to be given to the money and the product:
- When requesting the loan, the individual must indicate the use that is going to be given to the money, showing a detailed investment plan where he will specify the quantities and costs of all the materials that are needed and that will be acquired with that money.
- The property that is going to be modified will be a guarantee to guarantee the loan that is being granted.
Application for the repair credit: Who can do it?
The people who can apply for this credit are those who own a company or own a home in which they want to invest and increase its value, in addition to being able to have the opportunity to acquire machinery, property or for operating expenses.
For example, in the case of having acquired a property in the last few months and you want to cancel the expenses for acquired goods, you can request a refurbishment loan.
Loan installments and terms
It is important to know that the terms and installments of the repair credits will depend on the entity to which it is requested, but in general, this type of loan usually has a medium or long term for the strengthening or acquisition of fixed assets for the good. That is, instruments, fertilizers, livestock, farming tools, land or even farm animals, among others.
Because of the monetary figure that is handled, companies usually have a period of time to be able to obtain benefits from the property, machinery or all the improvements they had. Due to this, the financial entity facilitates 70% of the investment and the payment installments are located according to the company's cancellation opportunity.
The period of time can be established from six years to a grace period, depending on the facilities that the company has to be able to afford the payments.
On the other hand, if more flexible terms and direct investment are needed, it is recommended to apply for quick loans or personal loans to the financial institution.
What is the role of the refactionary creditor?
In situations where the credit is granted to carry out a new construction or the rehabilitation of a property or real estate, the person who grants the loan (creditor) has a preferential right to be able to cover the loan derived from the fees and expenses accrued.
Necessary requirements for the application of this credit
It is important to keep in mind that each of the countries and financial entities where they can offer this service have different requirements and procedures for your request. However, the fundamental requirements that you will need will be: valid identity document, credit application letter, account in the financial institution and personal reference.
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