First KFW and then a bank loan, or the other way around?

Hello everyone,

a quick question regarding the drawdown of our construction financing.

We have a Kfw 70 loan and a regular bank loan for our house construction.

KFW €50,000 at 1%
Bank loan €100,000 at 2%

For the bank loan, we would pay 0.25% commitment interest in May.

Now the first invoices are coming that we will pay through the financing.

From where should I draw first? Bank or KFW?

Thank you very much for your feedback!

Hello,

one would need to see the payment plan. However, it is often the case that the accompanying bank usually wants to disburse the KfW loan only from the 2nd payment step.

I would also tend towards KfW as it has a lower interest rate (1 to 2%).

Ok, I can check that. I also wonder what happens if I only need €130,000 of the €150,000? At [KFW] I can repay it immediately as I understand it? I don't think so at the bank?!?

I also wonder what happens if I only need €130,000 of the €150,000?

If your contract is good or your bank is accommodating, you can return a certain amount free of charge or not draw it.
With my Ing-Diba contract, I can leave €20,000 unused.

Ok yes, I should clarify that!

Hello,

the order of disbursement can also depend on the order of collateralization in the land register.

So if the bank loan is secured in the first rank and the KfW loan in the second rank, it is most likely that the bank loan will be drawn first.

Clarity should be provided by a look into the contract or a call to the loan officer.

Regards,

Dirk