Having a house is a matter of pride. It is a sign of achievement and bestows a sense of identity, peace, and comfort. It is the place you return to after a hectic day at work. However, managing and modifying your house based on your needs and preferences is challenging. You may have to redeem your savings or investment to afford the cost of remodeling or renovation.
However, if you do not have enough funds to manage your finances, applying for a home renovation loan is advisable. Whether you want to repaint your home, make internal and external repairs, or re-modify the structure of your existing home, a home renovation loan can take care of it without diving into your savings or straining your monthly budget.
You can secure a loan amount of up to Rs. 30,00,000/- depending on your lender. It is worth noting that your loan amount depends on your property’s current value in the market, your income, credit score, age, existing loan commitments, and so on.
Reasons to apply for a home renovation loan in India
A home renovation loan comes with several benefits that you can avail of to reduce the cost of borrowing significantly. For instance, you can get a lower interest rate, higher loan amount, and tax benefits. Here are some of the reasons to apply for a home renovation loan for a home makeover:
Affordable interest rates and flexible loan tenure
Any individual who is a legal and registered owner of a house can apply for a home renovation loan. Since the property is provided as security, you can avail of affordable interest rates and flexible loan tenure that meets your requirements and budget. Generally, the interest rate starts from as low as 10% and can go up to 15%. The loan repayment tenure can go up 15 years, giving your the flexibility to repay as per your preferences.
Relaxed eligibility norms
Another benefit of a home renovation loan is that the eligibility norms are relaxed. You can walk away with a loan to renovate your house if you meet your lender’s eligibility criteria as follows:
- You must be an Indian residing in one of the cities in India.
- You must be 21 years old while applying for a loan or 65 years during the loan maturity.
- You must be either a salaried company employee or a self-employed professional.
- You must have an active bank account.
- You must show a minimum income/profit based on your lender’s policy.
- Easy to apply
The process of applying for an affordable housing loan such as a home renovation loan is easy and convenient. You do not need to visit your lender; you can visit their website, fill in your application, and submit the relevant documents.
While applying online, you will have to specify the loan amount you need and the repayment tenure. If your loan application meets the lender’s eligibility criteria, you will receive the sanctioned loan amount in your bank account within hours.
Another benefit of applying for an affordable home improvement loan is that you are eligible for tax relief. That is why home renovation loans have become a popular source of accessing funds to meet your requirements compared to personal loans. The tax deduction falls under section 24 of the Income Tax Act, 1961. If you opt for a home renovation loan, you can get tax deductions of up to Rs. 30,000/- for interest paid towards your loan.
No prepayment charges
Another best part about a home renovation loan is that you don’t have to incur prepayment charges to pay your loan before the due date. As per the Reserve Bank of India’s guidelines, banks and non-banking financial companies can not levy prepayment and foreclosure charges on affordable housing loans, including home renovation loans. However, this benefit applies to you if you have chosen a floating rate of interest.
A home renovation loan adds value to your home
When you apply for a home renovation loan, it indicates your preparation for an occasion, such as marriage, parties, and festivals. It is worth noting that your loan does not add style and space but great value to your home. For example, when you plan to move to another house, perhaps a bigger one, you can sell your house at a premium rate. You can use the amount to afford another home based on your needs and preferences.
If you do not have enough funds, getting a home renovation loan is the best way to manage your finances without touching your savings or investments. You can secure a loan amount based only on your property’s value in the market. With affordable interest rates and tax benefits, you can significantly reduce the total cost of borrowing and repay the loan amount without constraining your monthly budget.