Can I take a Personal Loan for Home Renovation?
Buying a home is the first step towards independence. It also comes with a lot of responsibilities. A home needs constant upkeep. It will require painting and repairing fixtures and tiling, among others. You may be able to cover most of these expenses on your own. However, a substantial revamp may require more funds.
Here’s the good news! You don’t have to put all your plans on hold. You can simply go to a bank and apply for a personal loan for home repairs.
What Is a House Renovation Loan?
A house renovation loan may be used for home repair projects, such as improvements. This may involve painting the inside of the home or creating a modular kitchen. Personal loans may be used for undertaking non-financing repairs. These may include adding an extra room to an existing building, which increases the value of the home.
Banks, non-banking financial companies (NBFCs) and mobile lending firms provide instant loans. They have higher approval rates and shorter payback terms. These loans may be used for various reasons.
Should I Take a Home Improvement Loan?
The decision to procure a house renovation loan depends on the loan amount and the interest rates. Before deciding on a personal loan, you need to consider these factors.
Personal loan rates may vary from 10.50% at the lowest to 33% at the highest. While a limited house renovation loan might help deal with the need for funds, a high interest rate may be a dampener.
One perk of home improvement loans is that they do not require security. You will not be asked to offer your property as security to procure the loan.
Features of a Personal Loan for Home Repairs
- Adaptable tenure
The term of a quick personal loan often ranges from one to five years. You may return the loan at your convenience.
- A large amount as a loan
Loans of up to Rs. 25 Lakhs may be obtained for house repair.
- Rapid approval
When you request a loan, the bank or financial institution will first check the paperwork. The bank will then approve the loan in a few minutes. The loan will be issued to the account as soon as it is authorised.
- Eligibility requirements
You must meet the eligibility needs to qualify for a personal loan. You can request a loan for home improvement if you are a paid employee who meets the wage requirements for the loan.
- No assets are needed
Personal loans do not require assets. Hence there is no threat of losing assets or securities if you are unable to repay the loan.
Eligibility for Availing of a House Renovation Loan
- Age: To procure a personal loan, you must be aged between 18 years and 65 years.
- Type of resident: You must be an Indian resident or a non-resident Indian (NRI). You must have a permanent address or a rented residential address where you have lived for at least a year before applying.
- Employment: You may be salaried or self-employed.
- Credit Rating: You must have a trustworthy credit rating of 700 and above.
Documents Needed for a House Renovation Loan
- Identification proof: PAN card, Aadhaar card, voter’s ID, driver’s licence, and passport.
- Address proof: Bills issued by the government such as electricity bills, ration cards, passports, Aadhaar cards, PAN cards, and voter’s IDs.
- Income proof: Wage slips for the last three months. Bank account records for the last twelve months for self-employed people.
- Proof of employment or business: Income tax returns (ITRs) for the last three years.
How to Compare Home Improvement Loans
Research banks and financial institutions for good interest rates. Comparing the rates will help you procure a house renovation loan with the lowest rates. Here are a few things to look for when comparing home repair loans.
Annual Percentage Rates (APRs)
APRs show the total amount of the loan, along with any fees levied by the lender. It could be the ideal place to begin if they belong to a credit union. Federal credit unions have a maximum APR of 18%.
Loan Duration
A long-term loan may have low instalments. However, you may have to pay a higher rate over the entire term compared with a short-term loan. Use a home repair loan calculator to analyse payments for loans for multiple durations.
Option to Add a Co-Signer
Some lenders may allow you to include another person on the loan form. Adding a person with a good credit score or higher wages may help lower the APR or borrow more money.
How to Apply for a Personal Loan for Home Repairs
The process for availing a personal loan is simple. You may borrow up to Rs. 25 lakhs. A home improvement loan may cover many house renovation needs like changing the floor tiles, painting the walls, changing the fixtures and repairing the ceiling, among other things. You may borrow cash as needed and repay it as soon as possible.
The most important part of applying for a bank loan is defining the precise loan demand and amount. This will help you obtain the exact amount required.
You may apply for a personal loan by following the steps below:
- Step 1: Begin by entering the personal and job info.
- Step 2: Choose the lending partner, loan amount, and time frame for repayment to obtain quick online approval.
- Step 3: After accepting the loan, you will immediately get the funds in your bank account.
Conclusion
Home renovation funds are given to people who wish to renovate or improve their houses. This may involve carpeting, decorating, tiling, upgrading, rebuilding, repairing, and extending, among others.
Personal loans may also be used to carry out house improvement or extension projects since personal loans have no restrictions on use. If you have an existing house loan, you can seek loans for home remodelling too. This will be provided in addition to the existing home loan.
Home repairs may be expensive. However, you can still renovate your home with ease. A personal loan is a great choice if you don’t have the funds ready to finance a home renovation.
Give your home a new look! This will improve the visual appeal of the property and increase its value. Check out Piramal Finance to learn how you can avail of a home improvement loan. You can also learn more about managing your finances.