Home Renovation Loans are available to people who want to fix their homes in various ways, such as by putting down new floors, painting, tiling, upgrading, remodelling, repairing, improving, adding on, etc. As a type of personal or home loan, home renovation loan is offered by many banks, NBFCs, and HFCs. One can also apply for a personal loan to fix up, improve, or add to their home.
Personal loans have no restrictions on how they can be used except for speculation. People who already have a home loan can also apply for top-up home loans, which are extra loans that can be used to make home improvements. Note that personal loans for home improvements are unsecured, while home loans and top-up loans are given in exchange for a mortgage on the property to be improved.
Personal loans are taken out to renovate a house
Most personal loans for home improvements have the lowest personal loan rates that start at 10.25% p.a. But some PSU banks have lower interest rates on personal loans. Personal loans can last up to 5 years, though some lenders offer longer terms. Personal loans for home improvements are best because they are easy to get and don’t take long to process.
Personal loans usually take 2–7 days for lenders to process and pay out. But more and more lenders are using digital processing from start to finish for personal loan applications. This makes it faster to sign up new customers and give out loans. Many lenders also offer instant personal loans that have already been approved to customers who have good credit. Because these personal loans have already been approved, they can be given out within a few minutes or hours of the loan application.
Home loans to renovate the house
Most banks and HFCs offer home loans that can be used to fix up or improve your home. The personal loan interest rates on these home loans are lower than those on personal loans because they are secured. Home improvement loans have interest rates that start at 6.65% p.a. and go up from there, depending on the applicant’s credit history. These loans have longer terms than personal loans (up to 30 years). So, people who want to borrow more money can apply for Home Loans for Home Improvement.
Getting a home loan to fix up your house would put a lien on the property, so people who need smaller amounts of money for a shorter time should apply for a personal loan instead. In the same way, it usually takes two weeks or more to process a home loan. So, people who want to fix their homes quickly and need a loan should choose a personal loan.
Home Renovation Loans can be applied for alone or with a partner. Adding the co-income applicants can help you get a loan for a more significant amount. Some banks and HFCs also offer better interest rates to women who take out loans to fix their homes.
Top-up loan to renovate the house.
Home loan top-ups are extra loans that people who already have home loans can take out for personal reasons. So, people with a home loan and need more money to make home improvements or renovations can get top-up home loans. Top-up home loans will have the same loan term as the original home loan. The interest rates would be lower than those on personal loans as well.
Criteria for people who want to get home improvement loans
Different lenders and types of loans, like personal or home loans, can have different rules about who can get home Improvement Loans. Only people who already have a home loan can get a top-up loan. Below, we list the requirements that a person and a home loan for home improvements must meet.
- When the loan is due, the applicants can’t be older than 70.
- Both salaried and self-employed people can get loans to fix up their homes.
- The applicants should make at least Rs 15,000 per month.
- Home improvement loans with lower interest rates are more likely given to people with credit scores of 750 or more.
Documents You Need to Apply for a Home Improvement Loan
ID Proof: Aadhar card, PAN card, voter ID, driving license, and passport
Address Proof: Electricity bill, ration card, phone bill, passport, Aadhar card, PAN card, voter ID
Salary slips from the last three months, Form 16, and a bank statement from the last six months for salaried applicants.
Self-employed applicants must show proof that they have a business, their ITR for the last three years, and a bank statement from the last year.
Read Also: Four Top Reasons To Opt For A Personal Loan For House Renovation Purposes