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Type of Loan (Personal, Car, Home Renovation)

  • 14-05-2020 11:57am
    #1
    Cona
    Closed Accounts Posts: 591 ✭✭✭


    When applying for a loan, would you generally be asked to provide proof of how you spent the money?

    I am considering a Home Renovation loan, but would not use all of the money for this...would I need to provide receipts or something or why would they even ask in the first place?


Comments

  • #2
    coylemj
    Registered Users, Registered Users 2 Posts: 25,620 ✭✭✭✭coylemj


    If you're claiming that the home improvement will increase the energy efficiency of your home, the bank may give you a preferential rate and may ask for proof of the expenditure. For example, Bank of Ireland have a 'Green Home Improvement Loan' and they say that: 'Proof of work being undertaken will be required.'

    Just don't take out a home renovation loan, blow it on a new car and a holiday, then go back 6-12 months later looking for another home renovation loan!

    You can get a longer term for a home renovation loan as that would count as capital expenditure and is improving the value of your house. But it would not be a good idea, for example, to take out a seven year loan under that heading and spend a large chunk of it on a car. Excluding a 'holiday of a lifetime' to mark a major birthday or anniversary, the item you buy with borrowed money should outlive or have a useful life equal to or exceeding the term of the loan.


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