If you are a homeowner, you may feel the need to renovate your home at some point. You may want to redo the paint, change the interior décor, add a new room, change the electricals, or extend your bedroom. Irrespective of the renovation project you want to undertake, you would know that it requires a significant cost.
If you don’t have sufficient savings for the renovation, the next best alternative is to apply for a loan. You may invariably think about applying for a personal loan since it has a faster approval process. But you must know that a personal loan being an unsecured loan has a high interest rate. So, what do you do? How do you get the funds for your home renovation project? The solution is simple – Apply for a home renovation loan.
Let us look at the benefits of applying for home renovation loan
The most significant benefit of applying for a home renovation loan is that the interest rate for such loans is much lower and affordable than personal loan or other types of loan. You can easily get a home renovation loan for an interest rate starting from 6.75%.
Lower interest rate means the EMI is affordable, and you can easily repay the amount without any hassles.
You can use the borrowed amount for a variety of home improvement purposes. These include home extension, changing the flooring, upgrading the interior décor, painting, etc. You can use the amount for any home renovation to the structure of your existing home.
Another vital benefit of applying for a home renovation loan is tax benefits. The interest amount you repay to the lender is eligible for tax deduction. However, it is important to know that there are certain specific conditions that you must meet to avail the benefit. So, make sure that you know about these rules before applying for the loan.
Quick approval process
If you are applying for a home renovation loan with a certain financial organisation where you have an existing relationship or have an ongoing loan with them, the approval process will be faster.
Since the lender will already have all your personal and financial details, you may not have to go through the documentation and verification process all over again and get the approval much faster.
Flexible repayment duration
Most lenders in India offer home renovation loans for a maximum of 15 years. However, you have the flexibility to choose the repayment period based on the amount you want to borrow and repayment capacity.
If you are applying for a smaller loan, say up to five lakhs, and if you think you can repay the same within five years, you can opt for a shorter loan term. However, if you are pressed for cash, you can opt for a longer loan term and pay as per your convenience.
Anyone can apply for a home renovation loan. And most lenders have a simple eligibility requirement. Typically, the lenders have following requirement:
- You must be aged between 21-65 years
- You must be a salaried employee or a self-employed professional with a steady income source
- You must an Indian citizen (resident Indian)
- You can add a co-applicant to get a high loan amount
- If you add a woman as a co-applicant, you may get a discount on the interest rate
Now that you are aware of the different aspects of home renovation loan, make the most out of it and give your home the uplift it requires.