Payday loan for renovation?
If you choose to borrow money for your renovation, you will be faced with the choice: borrow money through your mortgage or with a payday loan? What are the differences between these two forms of borrowing money? When is the loan the better choice and when is the mortgage? Answer these questions in this blog. More of this story: scbwicanada.org
Difference loan and mortgage
To go straight to the point: since the new mortgage requirements of 2013 and 2014, there is little difference between a payday loan and a mortgage. Both loans must be repaid and both are tax-deductible in certain cases. The most important difference is that a mortgage is a loan with a purchase house as collateral.
Now you will not be quick to take out a mortgage for a new car. Something for which a payday loan is very suitable. But when borrowing money for a renovation, it is worth comparing these two forms of borrowing money.
I can be brief about borrowing money for your renovation via your mortgage; this is really only interesting if your renovation costs more than 50,000 dollars. Or if you opt for a loan with a term of more than ten years. Does this not apply to you? Then a payday loan is probably the best choice.
Benefits payday loan
A payday loan has several advantages compared to the mortgage. For example, it is often easier to take out a payday loan. You do not have to go through the notary and your house does not have to be valued. You notice this in the costs. As a result, the total costs of a payday loan are lower than those of a mortgage. Although you often pay a higher interest.
Also taking out a payday loan takes less time. Taking out an (extra) mortgage can take four to six weeks. With a payday loan, you have your money in your account within a few hours after the bank’s approval. Handy, right?!
Pay off faster
A payday loan gives the option to opt for a shorter term than with a mortgage. This way you can adjust your loan to your loan target. This prevents you from paying off while your new kitchen needs replacement. You are also previously debt-free. A nice feeling!
Redeem extra without penalty
You can always repay an additional fine without penalty on a payday loan. It is even possible to pay off the entire debt in one go. This is in contrast to a mortgage, where (generally) you can only repay an additional fine without penalty up to a maximum percentage of the mortgage amount annually.
Another advantage of a payday loan is the tax benefit. The interest on a payday loan that is used to renovate or renovate your own home is tax deductible on tax. The same applies if you use your payday loan to pay off your remaining debt.
Request a loan
Hopefully, you now have a better picture of the differences between a mortgage and a payday loan for your renovation. Do you want to know more? Calculate on our site what is the best choice for you and then immediately request a quote.