First of all, it is essential to know what a loan works. It is in fact a financing generally granted by any financial institution. The latter is indeed a loan earmarked for the purchase of a property or the repair of some or all of a property.
It should also be noted that a work loan does not distinguish between a principal residence and a second home. The fact is that it can always be allocated regardless of the nature of the housing concerned. Its principle?
Make available to the borrower a specific amount of money that he can use to finance various works. Of course, it is necessary that the lending organization agrees in the use of said sum.
The only requirement is that the loan must be used for the property specified in the loan application and not as one wants. This means that the nature of the loan must therefore be mentioned in the application.
That said, the completion of the repair work can be done by a professional company or the owner himself. This does not change the different conditions required to obtain the grant of a work loan.
A minimum sum to be refunded in advance
Early repayment of a work loan is possible in some cases. However, it should be noted that this possibility can be carried out partially or completely according to the present cases. Such a procedure is possible for example during a sudden and important return.
But while this type of repayment is not often beneficial to the borrower, many choose it in order to alleviate at least a portion of the debt.
Conditions to be present in the loan agreement must, for example, be taken into account as the minimum amount to be paid, for example. Feasible at any time, the amount to be refunded when a total repayment in part of a work loan must be decided. This option is especially valid in the case where the repayment is only partially done.
The sum is not fixed in advance although it is at least equal to at least 10% of the total amount of the loan. Of course, this point will also not be accepted if this sum is equal to the balance of the credit in question. Namely that the amount of the prepayment allowance is capped.
Early repayment compensation to be provided
The early repayment of a work loan is possible at any date of maturity, it is known that the borrower must prepare for an obligatory compensation. This compensation must be provided for in the loan agreement and is only required in a loan repayment in advance.
This fee is paid to the lender who is none other than the institution that granted the loan. However, it is necessary that this indemnity must not reach the 6 months of interest on the average capital of the loan and be of a reasonable rate.
It is also necessary that it must not go beyond the 3% of the capital remaining due before the prepayment. The fact is that it can also be raised because of the compensatory interest. There are, however, some exceptions that may exempt the borrower from this so-called indemnity.
This is notably the case of a work loan obtained in the late 1990s that is free from compensation. However, the persons concerned should for example sell their goods for a change of workplace. This exception would also apply where the borrower in question would be forced to stop working due to dismissal or to die.