Green loans are loans granted by banks or credit institutions to people who wish to carry out an energy saving, renewable energy, clean transport or environmentally friendly construction project.
Ecological loans are therefore granted to finance thermal insulation works, photovoltaic solar panels, the construction of passive houses, geothermal heat pumps and much more. We will look at this in detail in this article.
What is a green loan?
Banks offer different types of green loans to individuals who wish to carry out energy improvements.
Ecological loans are loans for energy improvements.
They are generally granted by banks to finance work aimed at improving thermal and/or acoustic comfort, as well as the installation of a more efficient and less energy-consuming heating or hot water production system.
The amount of the credit is limited to the total cost of the work, up to a maximum of EUR 30 000.
It can be renewable (in which case the maximum amount is doubled) or non-renewable. Key points to remember :
- The ecological credit allows you to obtain financing for energy efficiency work.
- It should not be used to finance a complete renovation.
Why are green loans important?
Ecological loans are low-interest loans that allow you to finance environmentally friendly projects.
They have been set up to encourage good initiatives and help people who want to go green. These loans are an effective way to help you carry out a green project.
Green loans can be used for the renovation or construction of a building, for financing work to improve your home or for the purchase of a non-polluting vehicle.
Banks offer different types of loans, including the zero-interest loan (PTZ), the tax credit on loan interest, personal microcredit and the PEL (plan épargne logement).
You can choose between a minimum of 12 months and a maximum of 10 years. This allows you to plan your project without stress, as you won't have to redeem your loan every year afterwards. To help you finance your green project, some banks offer special packages for borrowers who want to invest in green housing or who are planning sustainable development work such as installing solar heating or thermal renovation.
- Why opt for a green loan?
- What are the advantages of the PTZ?
How can I get a green loan?
If you are concerned about the environment, it is important to know that you can obtain an ecological loan. For some years now, banks have been offering interesting deals in this area. To take advantage of this, however, you must meet certain conditions.
The criteria to be taken into account to benefit from an ecological loan are :
- Demonstrate the profitability of the project
- Ensure that the project will be feasible and viable
- Choosing the right offer for your project
The different types of green loans
There are different types of loans for investing in renewable energy. Find out more!
- The interest-free loan
- The home improvement loan (PAH)
- The home savings loan (PEL)
- The sustainable development tax credit (CIDD)
The benefits of an eco-loan
The ecological loan is a loan granted by a financial institution to a company or an individual for the purchase of a good or service, in compliance with environmental standards.
There are many advantages to the Green Loan.
When you apply for an eco-loan, you cannot choose the nature of the project for which you will take out the loan. This is because the projects concerned must comply with the environmental standards imposed by European and French legislators.
Therefore, in order to obtain the eco-loan you have applied for from your bank or other financial institution, you need to meet the energy performance requirements of the building concerned.
This means that the work to be carried out must comply with the standards currently in force. If this is not the case, it will only increase the costs of the work to be carried out.
In addition to this requirement relating to the energy performance of the building, which is considered essential for obtaining the ecological loan requested from your bank or another financial organisation, it should be emphasised that this type of financing can be granted to any individual or legal entity wishing to invest in a property project that respects the fundamental principles of sustainable development.
The disadvantages of an eco-loan
The eco-loan is a solution for financing energy saving projects. However, it is not always easy to get a zero-interest loan to finance an insulation or heating project. How to get an eco-loan? Banks and financial institutions offer different types of loans, including green loans, leasing and micro-credit.
The green loan is a method of financing that allows individuals to obtain financial aid for the realisation of a project related to the environment. This type of credit can be granted by banks or specialised financial companies. To benefit from leasing, a contract must be signed with a specialised company. A lessor will then provide the applicant with a car or other means of transport to get to work, for example. Finally, microcredit is often dedicated to people who do not have access to the traditional banking system, which is often the case for people who are destitute or in a situation of social exclusion.
Microcredit is granted by private organisations such as charities.
- Search for the best rates
- Check that the project matches your profile
- Using a credit broker
How to manage a green loan?
The eco-loan is a loan that can be repaid in instalments. This type of loan can be used to finance various improvements, such as energy-efficient renovation of a home or the purchase of a less polluting vehicle.
The ecological loan is granted by banks and financial organisations that specialise in this field. In order to benefit from such a loan, the applicant must prove his or her ability to repay the loan through regular income. In addition, they must comply with a set of specifications to which they must adhere in order to obtain the loan.
In particular, they will have to take out life and disability insurance and meet certain housing conditions (BBC standards). Before signing any contract, the applicant must compare the offers on the market to find the one that best corresponds to his project and his needs.
Banks generally offer fixed or variable rates, with repayment terms ranging from 12 months to 10 years maximum:
- The fixed rates do not vary during the entire term of the contract.
- Variable rates fluctuate according to the price of the financial markets.
What is the future of green loans?
Green investment is a growing sector.
An increasing number of individuals and companies want to contribute to the protection of the environment, which has given rise to the concept of green investment.
This is a growth market that could well expand in the years to come.
Green loans are loans for individuals and companies whose primary purpose is to finance environmentally friendly projects. These loans actively participate in financing green investments and have a positive impact on our planet.
They can be grouped under three main categories:
- Energy loans
- Biodiversity-related loans
- Waste-related loans
Green loans are loans for individuals and companies. They are intended to enable companies to finance projects that help protect the environment. Ecological loans are often more advantageous than conventional loans, as they offer a better return.