Loan variants

For this reason, we would like to introduce you to the basic forms of the various loan options in this section. Comparison of Loan Variants for Construction Loans. – What are annuity and repayment loans? Apart from the repayment type, all loan variants differ only in the type and duration of the interest rate commitment (fixed interest rate). The classic loan with fixed interest rates of different lengths.

Comparison of loan options for construction loans – financial magazine and financial advisor

Comparison of loan options for construction loans - financial magazine and financial advisor

Also due to the numerous media coverage, it is above all the annuity loan, which is related to a real estate loan. Therefore, consumers should always be informed in detail which loan options within the framework of the construction loan for them personally can offer the best possible solution. Notwithstanding these possibilities, of course, there is still the building loan, which is often granted by a large margin.

The main feature of this real estate loan is that both interest and principal payments on the basis of so-called annuity. As an alternative to annuity loans, a further characteristic, the so-called repayable loan, may be offered. The monthly installment also consists of interest and repayment, with the ratio of these two components differing slightly from annuity loans.

With the repayment loan, the repayment amount is the same every year. For example, if the buyer agrees to repay five%, the loan will be finally repaid after 20 years. However, the annuity loan is always referred to as an initial repayment of, for example, five% as its part of the monthly installment is steadily increasing.

But not only repayable loans and annuity loans are available in the construction loan sector. At least a third option should be listed in this area, namely the so-called bullet loan. For that while is mainly characterized in that during the entire duration no repayment occurs.

This clearly sets off the offer from the previously mentioned annuity loan and repayable bond offer. Instead of the monthly repayment, however, it is with the bullet loan that the other variant for the repayment would have, for example, flows into a capital life insurance.

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