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As the name suggests, the work loan is a loan offered to carry out work, large or small. Intended for individuals, it is capped at $ 75,000.

What is a work loan?

The works loan is part of consumer credits. It is intended for individuals who wish to find financing solutions for their development work.

Sometimes the total cost of works is high, especially in the case of large sites. So, if you lack the necessary funds, you can apply for a work loan.

Generally between 200 and 75,000 $, it finances both small development works (laying new floors, painting) as well as more substantial work (insulation, electricity).

Who can take out a work loan?

The works credit is intended for both (co-) owners and tenants.

• Owners : they can use it for their main and secondary residence or for rental accommodation.
• Co-owners : they can use it to finance work on their common parts of the property.
• Tenants : they can apply for the loan themselves. For this, they must obtain the owner’s agreement. This must mention the assumption of responsibility for certain equipment of the habitat (plumbing, electricity).

What types of work are concerned?

The work loan finances multiple and varied works. It could be:

• Renovation (ex: facade of a house)
• Enlargement
• Improvement (eg isolation of a habitat)
• Maintenance (ex: painting)
• Decoration
• Acquisition of equipment (e.g. dishwasher, washing machine, etc.)

What are the conditions?

First, it is imperative that housing was built before 1 st January 1990.

In addition, the applicant must turn to a company with the endorsement “Recognized guarantor of the environment” (RGE), in order to carry out its work. This is a statement awarded by the Grenelle de l’Environnement, under the sign of eco-credit. Non-collective sanitation works are therefore excluded.

What documents are required?

You must file a loan application file with the bank or financial institution of your choice. The list of documents required obviously depends on the establishment. Several documents must appear there:

• Identity card or passport
• Proof of address (recent electricity, water or gas bill)
• Last imposition opinion
• Your last three account statements
• Documents indicating the amount of your income (pay slip, company balance sheet, Urssaf declaration, etc.)
• Bank details
• Documents mentioning the work to be carried out (quotes from the companies in charge of the work, purchase orders, invoices for the purchase of equipment)

Please note: if the loan request is made by two people, each of them must have their own supporting documents.

Where to take out this loan?

You must contact a bank that has signed an agreement with the State (there are about twenty of them).

How to calculate the total cost of the work?

Before carrying out work, it is necessary to estimate the cost (material required, potential call to a service company and / or an architect, etc.). Several details must be entered:

• Size of the area to be renovated
• Type of work (installation of a new floor in a bathroom for example, or electricity)
• Access to the site (if you are in town where parking is chargeable, the service company in charge of your work may require an additional cost)

Then comes the estimate stage, preceded by a search for the different prices offered in stores (for the purchase of equipment for example). It is important to make several quotes. This will save you time. For the estimate, it is necessary to consider separately:

• Cost of labor
• Cost of equipment (you can buy it yourself, if you delegate the work to a service company or a craftsman)

 

Cost of works according to m²

Type of work	Cost per m² for a house	Cost per m² for an apartment
Maintenance (ex: replacement of tiling, painting)	between 80 and 300 $	between 100 and 300 $
Total renovation of a room (ex: kitchen, bathroom)	between 500 and 1.000 $	between 700 and 1.100 $
Important works (ex: plumbing, insulation)	between 1.000 and 1.200 $	between 1.100 and 1.500 $

 

Particular case :

If you want to carry out energy renovation work in your home, you can ask a professional to carry out an energy performance diagnosis (DPE). It targets the types of work to be carried out as a priority (as well as their cost) in order to reduce your energy bill.

How to evaluate the various credit offers?

After these quotes, you will be able to estimate the total cost of the work in order to subscribe to a loan contract. You will be able to compare the credit offers of various banking establishments. Again, several online sites offer this service. Experts give you an immediate answer in principle (they are often available from Monday to Friday). These comparisons are made according to:

• Fixed APR (annual effective annual rate)
• Amount of administration fees
• Cost of insurance (optional)

The work credit then formulated by the bank of your choice (if your request is accepted) will stipulate the following data:

• Amount of monthly payments (adapted to your budget)
• Amount of the works loan
• Credit term
• Applicable interest rate
• Suspensive clauses
• Early settlement terms

According to the law, the borrower has a withdrawal period of 14 days from the signing of the contract. He can thus resign himself without having to provide an explanation. This does not result in a penalty.

Likewise for the early repayment of the work loan of less than $ 10,000.

What are the types of work loans?

Among the types of work loans, a distinction must be made between traditional work loans and assisted work loans.

Classic loans

It is possible to take out a conventional loan with multiple credit institutions. Choose them according to the desired loan amount and your needs.

• Unallocated personal loan

It allows you to have a sum freely granted. It is a loan known for its flexibility.

You do not have to justify expenditure with the establishment to which you borrow. Besides, the latter grants you the necessary funds quite easily. The APR is often also lower.

If you want to do the work yourself, the unrestricted personal loan is perfect.

• Affected credit

If you wish to finance a specific project, it is better to opt for the assigned credit. Indeed, it should only be used for a specific project, determined beforehand.

Consequently, the lending institution must ensure the proper use of the credit granted. For this, you must provide supporting documents (quotes issued by service providers, equipment invoices).

In addition, the release of funds takes place only once. The rate applied is also often lower than that of the unrestricted loan.

• Revolving credit

Also called “revolving loan”, it designates a sum of money permanently available after the signing of the loan contract. The borrower can then use this reserve as many times as he wishes.

The revolving credit is regenerated after each reimbursement of the amounts used. Although it is obtained quickly, this credit remains expensive. This is explained by the application of high rates by financial institutions.

In addition, this type of loan does not require proof.

Type of loan according to amount, interest rate and duration

Type of loan	Amount borrowed	Interest rate	Repayment period
Unallocated personal loan	> 200 $ to 75,000 $	Between 2.5% and 10%	10 years maximum
Restricted credit	> 200 $ to 75,000 $	Between 2.5% and 10%	10 years maximum

 

Note: The interest rate applied depends on the type of loan and the profile of the borrower.

In addition, if you want to borrow more than $ 75,000, you must then take out a mortgage. THE repayment period then extends over 10 to 30 years.

Assisted construction loans

Created by the State, you can only subscribe to it with credit organizations. You can benefit from these credits under certain limits including the capping of resources, the nature or the energy performance of the habitat.

Their rates are usually lower than the rates for traditional work credits.

• The Zero Rate Loan (PTZ)

The zero-rate loan paves the way for financing, the repayment of which only applies to the capital raised. Therefore, the borrower is not forced to pay his interest.

This loan concerns the financing of works for new housing or existing social housing. It can also apply to the renovation of old real estate.

• Zero rate eco-loan (eco-PTZ)

Here again, the eco-ptz is a loan granted without interest, to carry out work in dwellings built before 1990. This loan is perfectly suited to energy renovation works.

• CITE (Tax Credit for the Energy Transition)

This is aid to finance work intended to improve the energy performance of a home.

• Loan from energy suppliers

They designate ecological loans offered by electricity and gas suppliers to individuals in order to improve the energy performance of housing. The amount fluctuates between $ 10,000 and $ 30,000, for a rate of less than 3%.

• The loan from the National Housing Agency (ANAH)

An integral part of the “Living Better” program, this loan is intended for work whose aim is to increase the energy gain, the security or the healthiness of a habitat. It is also suitable for individuals wishing to adapt their housing to people with disabilities.

What are the different loan rates?

The amount of the works loan is capped at $ 75,000. If it exceeds this amount, it then becomes a mortgage.

In addition, after the credit simulations based on the APR, note that this data is only published for information. In order to have a precise idea of ​​the different rates offered, it is necessary to take into account the following elements:

• Income level
• professional situation
• Family situation (married, PACS, single, with or without children…)
• term of the loan
• Amount of the loan

Last year, the most advantageous rate for the works loan was less than 3% fixed APR. It applied to any subscription (up to $ 50,000) reimbursed in 60 monthly payments (5 years), or less.

Furthermore, a distinction is made between “minor works”, the amount of which is estimated at $ 10,000 maximum. The institutions granting the credit consider that 3 years (maximum) is the duration which corresponds to a short period.

 

First, there are bank home loans. This is the most common type of funding. They are granted by most financial institutions and apply to any type of real estate project, whether it is the purchase of a main, secondary or rental residence.

Bank home loans

The amortizable loan

The amortizable loan is the most common type of loan in France.

Each month, the amount paid by the borrower amortizes part of the capital borrowed. It thus reimburses the interest on the mortgage.

On the last due date, the loan is then fully repaid.

Conditions

The borrowing conditions are quite flexible. There are no clearly defined regulations. However, it is better to establish a loan file that is convincing enough to obtain a positive response: high income, low debt ratio, stable professional situation, significant personal contribution, etc.

Ceiling

There is no fixed ceiling. However, you must take out a minimum loan of $ 75,000.

Repayment period

The term of the loan generally ranges from 25 to 30 years. It varies according to the banking establishments. However, the larger the amount of the loan, the longer the repayment term.

Interest rate

It can be fixed, variable or modular. In order to find the best rate among banking establishments, you can perform simulations. You will then get a loan quote.

The depreciable loan is generally a loan associated with other home ownership assistance loans. A smoothing of your loans requested from your bank can allow you to balance your monthly payments.

The bridge loan (also called In Fine loan)

The bridge loan is also non-amortizable. That is to say, the monthly payments made do not allow the loan capital to be repaid.

It is intended for homeowner borrowers interested in rental investment: whether it is a property for sale or intended to be. So if you want to get an advance on the sale of your property, know that this advance will be refunded to the bank when the initial property is sold.

Note that it is necessary to have already saved for the funding to be granted. Indeed, the latter will be backed by the amount saved.

Conditions

To take out an In Fine loan , you must have life insurance in the form of a savings account dedicated to repaying the final amount.

Interest rate

The amount of interest rates remains unchanged during the entire repayment period. It is generally superior to a conventional loan.

Repayment period

The duration is 20 years maximum.

Repayment of the amount borrowed is made with interest divided into monthly payments. These only apply to interest on the amount borrowed. Once the loan is due, the borrower repays the full amount of the loan. But each month, the borrower has the option to repay a smaller amount, so that he has more time to repay the full amount.

Home Equity Assistance Loans

Home equity loans are generally used to finance the principal residence of the homeowner.

Some loans may subsidize the full price of the property. Conversely, other loans will be “complementary” to financing. In this case, they will not exceed a quota fixed by decree.

Social accession loan (PAS)

The social accession loan (PAS) is granted on a means-tested basis to applicants. It is a loan with the possibility of subsidizing the entire property as well as certain additional costs.

It also opens up rights to APLs and allows you to benefit from reduced fees.

Awarded by the financial organizations having signed an agreement with the State, it has the following characteristics:

• it only finances the main residence, whether it be its construction, its acquisition or works (at least $ 4,000)
• it can be obtained without personal input
• it is not supposed to finance the totality of the acquisition costs, it is a partial financing

Conditions

In order to benefit from the social accession loan, it is imperative to meet means conditions, fixed according to the geographic area of ​​the targeted accommodation and the number of future occupants.

In order to benefit from the PAS, you must:

• Being French

or

• Hold a residence permit

If you are an APL holder, know that it will be easier to access the PAS, rather than a standard mortgage.

Ceiling

In order to benefit from this loan, resources must not exceed a certain ceiling, depending on the geographic area of ​​the targeted accommodation and the size of the applicant household.

On the other hand, the social accession loan does not participate in the notary fees.

Repayment period

It is between 5 and 25 years (35 years exceptionally).

The loan under agreement (PC)

Without condition of income, the loan approved authorizes the rights to the APL, which has the consequence of facilitating the financing of the whole housing, through the reduction of the monthly payments

It is necessary to apply to financial institutions having signed an agreement with the State to benefit from this loan.

Conditions

Furthermore, this loan is granted without means test. Nor is it necessary to provide a personal contribution.

Ceiling

The amount of the ceiling varies according to the rates.

Interest rate

With notary fees, they are generally lower than traditional mortgage loans.

Repayment period

From 5 to 35 years old.

The Zero Rate Plus Loan (PTZ +)

Intended for first-time buyers (with the exceptions mentioned below) wishing to access the property, it applies in particular to new goods. However, since January 2015, it is possible that it finances old goods.

Exceptions:

The Construction and Housing Code provides for some exceptions.

• If you, or one of the inhabitants of the accommodation receive a disabled adult allowance (AAH) or a disabled child education allowance (AEEH). You must justify it with a 2nd or 3rd category disability card or inclusion mobility card attesting to the mention of disability.
• If you are the victim of a natural or technological disaster, making your main residence an uninhabitable place. It is therefore imperative to apply for the loan two years after the certificate attesting to the loss.

In addition, it is a complementary loan to finance. Indeed, it cannot be granted alone. It must be combined with other loans such as:

• The housing action loan
• Social accession loan (PAS)
• The loan under agreement
• The bank mortgage
• The home savings loan

Conditions

It is necessary that you have not been an owner, in the two years preceding the subscription to the loan. It must also finance the construction or acquisition of a principal residence.

It is necessary to approach an establishment having signed an agreement with the State.

Ceiling

In 2018, the resource ceilings are as follows, for loans contracted on January 1, 2016:

Resource ceilings for loans contracted on January 1, 2016

	Single	Couple with two children
Zone A	$ 37,000	$ 74,000
Zone B1	$ 30,000	$ 60,000
Zone B2	$ 27,000	$ 54,000
Zone C	$ 24,000	$ 48,000

 

It generally corresponds to 40% of the total cost.

It should be noted that these amounts correspond to the reference tax income for the penultimate year (year n-2).

Like the resources of borrowers, the amount of the loan is also conditioned: it depends on the geographic area of ​​the targeted property.

The amount of the PTZ is calculated by applying a certain percentage to the total cost of the acquisition:

amount of the PTZ in percentage according to the geographical area

Zone A	Zone B1	Zone B2	Zone C
26%	26%	21%	18%

 

The application of a defined percentage implies that the PTZ cannot be used to finance housing in its entirety.

Duration of reimbursement

It ranges from 20 to 25, with a deferred period of 5 to 15 years, during which repayment of the loan is suspended. As for reimbursement conditions, they depend on income, household composition and the geographic area of ​​the property.

The Home Savings Loan (PEL)

If you have a real estate project that consists in acquiring or building a main residence, the housing savings loan (PEL) is perfectly suited to your needs.

The ELP consists of a savings phase of up to 4 years. At the end of this period, it is possible for the borrower to take out a mortgage or to make any other use of the sum acquired.

If you opt for a mortgage after these 4 years, know that you can access particularly advantageous rates with the chosen banking establishment.

Conditions

•  Be a natural person (and not a legal person)
•  Not hold an ELP in another banking establishment
• Pay an initial amount of 225 euros minimum
• Feed the PEL at least 540 per year. This amount can be paid monthly (45 $) ,, semester etc through an automatic debit from the current account.

Not to mention that you can only subscribe to one ELP per person. For example: within a family made up of a couple and three children, there can be 5 ELPs.

Ceiling

It is limited to $ 61,200.

Interest rate

Since August 1, 2016, the interest rate for the ELP in 2018 is 1% gross (0.70% net after application of the flat tax).

But if you opened an ELP before this date, you must then refer to the fixed rate in force at the signing of the contract.

In addition, the interest acquired each year can be capitalized : thus each December 31, they are added to the capital saved and generate additional interest.

Repayment period

It ranges from 2 to 15 years.

The Home Savings Account (CEL)

The housing savings account provides preferential interest rates in order to acquire real estate. In addition, there are real estate projects.

Conditions

To obtain this loan, the account must have been open for more than 18 months. It must also have yielded interest, fixed according to the operation to be financed, whether for works, construction or acquisition.

Like the ELP, this credit must in most cases be requested from the bank where the account was opened.

Ceiling

It is limited to 23,000 $.

Interest rate

The interest rate is variable. It is evaluated according to the savings period on the account.

Duration of repayment

Between 2 and 15 years old.

The housing action loan

The housing action loan is allocated to salaried borrowers. It is used to finance part of the principal residence concerned.

For the conditions to be fulfilled, they apply to both the employer and the employee.

The Paris housing loan

The City of Paris has set up a unique system to help Parisians acquire new or old real estate within the inner city walls of the capital.

Thus, the “Paris housing loan 0%” (PPL 0%) is a free credit, allocated according to the resources of the applicant (we must consider the tax reference income).

Tax resources according to the size of the household

Household composition	Reference tax income
Single person	$ 37.506
Couple	$ 52,914
Couple with a child	$ 69,362
Couple with two children	$ 82,812
Couple with three or more children	98.528 $

 

Ceiling

The ceiling is $ 24,200 for a single person. It is $ 39,600 for households of two or more people.

Repayment period

It is estimated at 15 years.

How do the rates for home loans work?

Fixed rate loan

With the fixed rate loan, the monthly payment of the credit is known from the signing of the contract.

The variable rate loan

Perceived as being the most risky, this type of interest rate varies according to the market. The interest rate is revised periodically by the bank, according to the evolution of its benchmark index.

• With hedging, the rate variation is limited.
• With a rate +1 -1, for example, the starting rate cannot exceed the limits set. This loan offers a higher rate than a revisable loan without cover. But it does reduce the risk of a sharp rate hike.

The adjustable rate loan

On the other hand, the adjustable rate loan fluctuates over time according to a benchmark index.

Most of this type of loan have been regulated in order to protect borrowers from rising rates. They are thus more attractive.

The guaranteed loan

It is with a guarantee organization that the guaranteed loan is granted to the borrower. He then sees his mortgage guaranteed.

The smoothed loan (or loan with repayment stages)

The smoothing of loans results in an adjustment of the repayments of a mortgage, according to the repayments of other loans.

This system gives the possibility of obtaining an approximately equal monthly payment throughout the financing.

The modular loan

Finally, the modular loan authorizes the borrower to decrease or increase its repayments within the limits of the ceilings established for the loans contracted.

The civil servant credit is, as its name suggests, intended for civil servants. It corresponds to several types of loans at preferential rates. 

What is official credit?

Addressed to civil servants, the civil servant credit is an offer established for civil servants.

There are three types of civil servants: the state civil servant, the territorial civil servant and the hospitalist.

The civil servant credit compensates for the fact that these workers are not entitled to the “employer loan”. The latter is in fact accessible only to employees in the private sector.

The official credit is also intended for holders, trainees or contract workers. To these are added:

• Their spouse, whether active or not
• Their descendants and ascendants, whether active or not
• Employees of public or private law, establishments or companies in the public sector 
• Local, national or European elected representatives

For example, if a couple (made up of a civil servant and a private employee) wishes to take out a loan, it is recommended to make two separate loan requests. You will thus be able to benefit from the 1% employer loan  and the advantages of the civil servant loan.

In addition, public administration employees have an additional advantage, added to this civil servant loan: they benefit from a distinctive surety (called civil servant mutual surety), through which a certified organization guarantees their bank loan. And this, at no cost.

Where to go to take out a civil servant loan?

It is first important to compare the various offers before applying for a loan. We must not forget the traditional offers, which can sometimes have unexpected advantages.

In addition, it is advisable to go to the offers of mutuals of the function held. They often offer credits reserved for civil servants and can therefore guide you according to your needs.

On the other hand, for the “loan to civil servants”, it is to his employer that civil servants are likely to obtain information.

What types of official credit exist?

Although it suggests the existence of a single official credit, it actually covers several types of loan:

Personal loans

Intended for the purchase of a vehicle (car, boat, etc.) or for carrying out work, they make it possible to benefit from an amount of 3,000 to 20,000 $.

You must apply to organizations such as the CSF (Credit Social of Civil Servants), Banque Populaire or BFM (Banque Française Mutualiste) in order to subscribe to this type of loan. You will have the choice between:

• The unrestricted personal loan that does not require justification as to why you want to borrow.
• The assigned personal loan, where conversely, it is necessary to justify your project.

The amounts issued generally range from $ 3,000 to $ 20,000 for a period which extends from 12 to 72 months, with reimbursement conditions established upon signature of the contract.

Home loan

The mortgage is probably the offer that has the most advantages for civil servants. It is the equivalent for the public service of the employer credit (Action Logement) because it allows you to benefit from personalized housing assistance (APL).

What are the conditions?

It is used to finance the purchase of new or old accommodation, intended to be inhabited as a main residence and located within a radius of 50 km from the workplace. It can also apply to carrying out work. Finally, the requesting official must not have official accommodation.

However, the mortgage cannot finance the entire cost of housing. It must be associated with a regulated loan, such as:

• The loan under agreement
• Social accession loan (PAS)

Its duration extends over 10 to 15 years maximum.

What is its amount?

The amount of the official real estate loan is calculated according to the number of rooms of the desired housing and its geographical area.

Thus, in 2017, these amounts were estimated between $ 1,219.59 (1-room accommodation, located in zone 3) to $ 3,887.45 (7 rooms, in zone 1).

Revolving credit

Revolving credit allows the borrower to benefit from a credit that he can use freely. This credit can also be replenished. He opens his voice to a loan of up to $ 3,000.

The repurchase of credits

This type of credit combines several credits into one to guarantee the borrower the lower monthly payments. For example, the civil servant loan can be granted in association with a real estate loan (agreement or social accession) but under means test.

What Are The Benefits For Official Loans?

If you benefit from several aids, you increase your chances of having your loan application accepted.

In addition, the public service mutual insurance company can stand surety free of charge. It can also offer you insurance at negotiated rates, often lower than those on the market (between 0.20% and 0.25%).

Your civil servant status reassures banking establishments, due to your stable professional situation.

The caution

Also called collateral, it is mandatory for all loans. It is useful for the bank to prevent defaults and ensure the repayment of the contracted credit.

It can be expressed in the form of:

• personal guarantee contracted through a surety company (Crédit Logement, for example)
• real guarantee (as a mortgage  on your property). It is the bank which chooses the type of surety to favor according to your profile but also to your project.

Note that the deposit is an additional cost in your loan.

• The  personal guarantee  costs between 1% and 1.5% of the amount borrowed depending on the company which guarantees
• A real guarantee costs between 0.8% and 1.5% of the amount borrowed

In addition, certain public service mutuals have developed a guarantee company specifically addressed to public service agents. It takes into account the particularities of the public sector (these are CASDEN  and  BMF) . The cost of the guarantee is then estimated at 0.4% to 0.5% of the amount borrowed.

Insurance

It corresponds to the most important costs of your credit, with interest. It allows you to continue to repay your loan, even in the event of a life accident. You thus avoid payment defaults.

In the law, you are not forced to insure yourself. However in practice, banks require insurance, if only for death and PTIA (Total and Irreversible Loss of Autonomy).

Depending on your project, other guarantees may be requested: to prevent work stoppages, incapacity or even against job loss.

Banking establishments offer insurance contracts corresponding to the loan allocated. However, you have the power to opt for delegation of insurance, if you wish.

It is then possible to take out a loan insurance contract with another organization. The bank cannot refuse you, if you respect the equivalence of guarantees.

In addition, you can ask your mutual insurance company for the type of loan insurance contracts it has. Depending on your sector of activity, you will benefit from advantageous conditions. This is the case if you carry out a so-called “risky” trade (eg military , firefighter). indeed, traditional insurance contracts can refuse you certain guarantees: they refuse to cover you for certain situations. The ideal is then to choose a suitable insurance, delivered (or not) by your mutual. The latter can offer you a contract specific to your needs and the risk you represent.

Other official credit charges

Management fees are usually low, due to the introduction of discounted rates. They regulate current account, bank card and other fees.

In addition, you can access subsidized savings accounts, reserved exclusively for holders and retirees of the public service.

You can also call your broker. It will help you see clearly when negotiating the contract.

Since your income is guaranteed and predictable, certain establishments may grant you a progressive loan: the monthly payments will adapt to the increase in your wages. Two consequences: your loan will be reimbursed more quickly or you will be able to take out a larger loan.