If you want to modernise your home or need to carry out renovation work, this can be a big financial burden. Especially if an urgent renovation is needed on your home, financing out of your own pocket can often present you with a major challenge.
Modernisation can make sense to increase the living comfort in your own home and to increase the value of your property. But often the financial resources are not immediately available even for such projects. This is where the modernisation loan from Miro Kredit AG comes into play, which can help you put your modernisation plans into action.
What is a modernisation loan?
A modernisation loan - also called a renovation loan or renovation mortgage - is a personal loan that offers you, as the owner of a property in Switzerland, financial support for renovation and modernisation projects. The instalment loan can be used, for example, to remodel a bathroom, install a new heating system or replace the roof.
Accordingly, you can use the loan specifically for the renovation, refurbishment or modernisation of your property. As a rule, there is a minimum amount and a maximum amount for such a renovation mortgage, for example CHF 50,000 to CHF 500,000.
The main advantage of a modernisation loan is that banks often grant better conditions to borrowers. For example, you benefit from lower interest rates or receive other attractive loan offers if you take out a higher loan while proving that you are a homeowner.
Are there any specific requirements?
In order to be able to apply for a modernisation loan from Miro Kredit AG, you should ensure that you meet the necessary requirements for this. Firstly, you should avoid over-indebtedness. This is especially important for a modernisation loan, as the home may also be financed. In addition, you must meet the following requirements to apply for and receive a modernisation loan:
- Creditworthiness: In principle, you must prove your creditworthiness for any type of financing. We use the information you provide to check whether you are able to repay the modernisation loan at the stipulated conditions. This includes, among other things, a check of your income and financial situation.
- Proof of ownership: In addition, you must prove that you are the legal owner of the property to be modernised. Only then can you apply for a modernisation loan. Your mortgage contract already suffices as proof here.
How to apply for a modernisation loan
Applying for a modernisation loan with Miro Kredit AG in Switzerland is a fairly straightforward process. With our modernisation loan calculator, you have the option of adapting the loan to your individual possibilities and needs and submitting a non-binding loan application.
- Select the loan amount: First, you can select the desired amount and term of your modernisation loan. Thanks to the modernisation loan calculator, you immediately get a transparent overview of the amount of the monthly instalments including the interest costs. Thus, you will receive a non-binding loan offer even before concluding the loan agreement.
- Adjust the term: To adjust the monthly instalments to your budget, you can choose the term of the modernisation loan according to your personal requirements. As a general rule, the longer the term, the lower the monthly instalment. However, you should note that the interest costs are higher for longer terms.
- Submit your application: Once you have decided on a modernisation loan with Miro Kredit AG, you can submit your loan application. You can easily fill out the application online by entering your personal data and information about your financial situation. Based on your additionally submitted documents, we can then check your creditworthiness in order to grant your desired loan.
- Send the credit application: Now all you have to do is send the credit application you have filled out.
- Loan approval and signing of the loan agreement: After a successful credit check, you will already receive a positive credit decision for your modernisation loan. Finally, all you have to do is sign the loan agreement on-site and you can start modernising your property!
How long does credit approval take?
The duration of the credit approval at Miro Kredit AG can vary depending on your individual case. However, it usually takes one to two working days for your loan application to be fully processed and approved. To speed up the process, you should make sure that you submit all the required documents in full when applying for the loan.
If you apply for a modernisation loan of less than CHF 80,000, you must also bear in mind that under Swiss consumer credit law there is a statutory waiting period of 14 days for payment. This withdrawal period does not apply if the loan amount is over CHF 80,000. In this case, we can already disburse the modernisation loan to you within 1 to 2 working days.
What is the difference between construction financing and a modernisation loan?
The terms construction financing and modernisation loan are often used to describe different types of property financing. It is important that you know the differences between the two types of financing.
Classic construction financing refers to the financing of a new building or the purchase of a property. Thus, construction financing serves to enable you to purchase your own home or to finance the construction of a new house. The funds from a construction loan are usually only used to cover the purchase price of the property or to finance the construction. Repayment takes place over a long-term period and can often be spread over several decades.
A modernisation loan, on the other hand, is specifically for renovation or modernisation work on an existing property. With a modernisation loan, you as the owner can receive financial support to improve your living situation without purchasing a new property. This can include modernising bathrooms, renovating kitchens, installing new heating systems or other improvements. Unlike construction financing, a modernisation loan is usually a smaller loan amount that is repaid over a shorter period of time.
Loan for modernisation: major advantages and disadvantages
Taking out a modernisation loan can have both advantages and disadvantages. The advantages include the financial support to improve your home, the possibility to increase the living comfort and to increase the value of your property. By taking out a loan with Miro Kredit AG, you can implement modernisation work that you might not otherwise be able to afford. Furthermore, the interest rates for modernisation loans are usually lower than for other loans because they are secured by the increase in value of the property. In addition, with a modernisation loan there are no possible costs for the appraisal of the home or costs for increasing the promissory note.
On the other hand, you should be aware that taking out a modernisation loan entails additional monthly charges. Repaying the loan requires careful budgeting to ensure that you can meet your financial obligations. Therefore, you should carefully examine the costs of the loan, choose the term cleverly and check whether a modernisation loan fits your financial situation.
When is a modernisation loan worthwhile?
Basically, a modernisation loan is worthwhile if you have concrete plans to improve your property. This can include renovation, energy-efficient refurbishment or modernisation.
If these works help to increase living comfort, reduce energy consumption or increase the value of your property, a modernisation loan can be a sensible investment. Thus, a modernisation loan can be a practical option if you do not have the financial means for the planned work immediately.
What does a modernisation loan cover?
You are usually completely free with the use of a modernisation loan. This means that a modernisation loan covers a wide range of modernisation and renovation projects on your property.
- Sanitation: The modernisation of bathrooms and toilets, the installation of new sanitary appliances or the renewal of water pipes.
- Heating and ventilation systems: The replacement or improvement of heating, the installation of heat pumps or the improvement of ventilation.
- Energy efficiency: Measures to save energy such as the installation of insulation, the replacement of windows and doors or the implementation of solar systems.
- Kitchen renovation: The modernisation of kitchen spaces, including new appliances and furnishings.
- Roof renovation: The renewal or repair of the roof.
- Electrical installations: Updating electrical systems and installing new lighting or safety equipment.
- Interior design: The remodelling of interior spaces, such as the redesign of living rooms or bedrooms.
Tax effects of modernisation
If you apply for a modernisation loan with Miro Kredit AG, interest and interest rates will accrue as with any other loan. However, you have a decisive tax advantage: as a private individual in Switzerland, you have the option of deducting the debt interest paid in the tax year up to a maximum of CHF 50,000 from your taxable income both for federal tax and for cantonal income tax. However, you should note that only the interest can actually be deducted from the taxes, but not the redemption payments.
Furthermore, the modernisations of your property itself can also have tax implications. These can be granted, for example, in the form of tax deductions or reductions for energy-efficient modernisation or renovation work. To find out more about the tax implications of modernisation, you should find out about the current tax regulations in your canton and seek professional advice if necessary.
Tips for successful renovation financing
Successful renovation financing requires careful budget and time planning. With proper planning, you can ensure that your project stays within budget and is completed on time. At the same time, the project should also achieve the desired results. Therefore, you should keep a few tips in mind when it comes to renovation financing.
Budget and time planning
- Set a budget: First, you should prepare a detailed budget for your renovation project. You should take into account all the costs involved, including materials, labour costs, building permits and unforeseen expenses. A realistic budget is crucial to avoid financial problems and ultimately to choose the appropriate loan amount.
- Obtain cost estimates: In the context of modernisation, renovation or refurbishment, it makes sense to obtain several cost estimates from different craftsmen or building contractors in order to get the best prices for the services you need. However, you should not only pay attention to the price, but also to the quality of the work and the reliability.
- Create a timetable: If possible, create a detailed timetable for your renovation project that includes all phases and steps. This schedule should be realistic and at the same time include enough buffer for possible delays.
- Check financing options: As soon as you know how expensive the modernisation will approximately be, you can already explore a suitable financing option. In addition to a modernisation loan, you can of course also use equity from savings. Choose the financing option that best suits your financial goals and needs.
- Check your creditworthiness: Before you apply for a loan, check your creditworthiness. This way, a good credit rating can get you better terms.
- Reserves for unforeseen expenses: As with any building project, you should ensure that you have extra funds available for unexpected costs. Renovation projects can often run into unforeseen problems, so it is advisable to have financial reserves.
- Professional advice: If you are unsure about how to finance your renovation project, you can contact Miro Kredit AG for professional advice. We will help you determine the best financing option for your needs and create a realistic financing plan.
Receive state funding for home renovation
If the modernisation of your property includes an energetic refurbishment, you should check your options regarding a state subsidy for the house refurbishment. In Switzerland, for example, there are a variety of subsidies for energy modernisation measures in buildings, offered by both the federal government and the individual cantons.
Since 2017, the Harmonised Funding Model 2015 (HFM 2015) has been in force, in which the Confederation funds 18 different measures with a uniform amount. The cantons can choose from this catalogue of measures and set individual priorities.
These options are available
- Subsidies for individual measures: As the owner of a property, you have the option of receiving state subsidies for the renewal of heating systems. Most cantons now offer subsidies for environmentally friendly and efficient heating - including pellet heating systems and heat pumps. Building insulation can also be financially supported.
- Subsidies for an overall renovation: If you meet one of two energy standards as part of the energy renovation, you can also receive a subsidy. You can choose between the state energy efficiency certificate (GEAK) or the Minergie standards.
- Bonus payments: You may be entitled to bonus payments if you implement particularly efficient measures as part of the renovation that complies with the GEAK or Minergie guidelines.
Whether you want to renew your heating system, renovate your kitchen or refurbish your bathroom, with a modernisation loan from Miro Kredit AG, the financing of your modernisation plans is secured. With a smart budget and time planning and the right financing, you can ensure that your project can be successfully implemented without having to worry about finances. Find out about our modernisation loan offer now and start modernising your property soon!
Private loan calculation example:
Loan amount: CHF 10,000 without insurance. Repayment period: 12 months
Interest (including costs) amounts between CHF 240.50 and CHF 574.25. Effective interest rate 4.5% – 10.95%. Possible loan repayment period from 12 to 120 months
Processing fees: CHF 0.-. Granting a loan is prohibited if it leads to over-indebtedness (§ 3 Unfair Competition Law – UWG)