Low-rate loans to ease renovations

Anyone planning home improvements such as a garden workshop, new kitchen or rewiring a house can get a loan for up to €75,000 with lower-than-normal interest rates through a prêt travaux or crédit travaux .

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This is a personal loan (prêt personnel) but is directly linked to the work being done and cannot be used for any other project as the lender asks for receipts and invoices matching the loan.

Other personal loans can be used in any way the borrower wishes, the only restriction is to repay the loan in the timeframe agreed.

In the prêt travaux the loan is granted on condition of being used for a project and may be called a crédit affecté travaux as the money is allocated for the project.

The lender demands estimates before the loan is agreed and this assurance that the work will be done allows a reduced interest rate, as does a short repayment term.

In a personal loan, once the loan is agreed the money is paid into the borrower’s account and even if the work is not done the loan must be repaid. For a prêt travaux the loan is not triggered if the project does not go ahead and, in such a case, there is nothing to repay.

Some banks restrict the level of personal loans – sometimes to just €8,000 – but a prêt travaux can cover works up to €75,000. A more expensive project may be eligible for a prêt immobilier.

Work to improve energy efficiency may be eligible for the 0% éco-prêt à taux zéro that is available until the end of 2018 for projects worth up to €30,000. There is no earnings limit for this.