How To Apply For Home Renovation Loans?
Home renovation loans are one of the most cost-effective ways for homeowners to finance their entire home renovation project. Be it remodelling your kitchen or upgrading the living room, home renovation loans could be your one-stop solution.
However, most people tend to confuse home renovation loans with home loans. But don’t be concerned. You’ll know everything about home renovation loans – what they are and their benefits by the end of this blog.
What are Home Renovation Loans?
Home renovation loans are used only to revamp or remodel your existing house. It also helps improve the value of your house. Considering that real estate prices are soaring, it won’t be a bad idea to give your home a complete makeover in case you want to sell it.
Renovation loans usually come with the same interest rate as home loans, however this may vary from bank to bank. However, note that home renovation loans may come with smaller ticket-size and repayment tenure than regular home loans.
Features and Benefits of Home Renovation Loans
Home renovation loans come with a host of benefits. Some of them are:
- Lower interest rate: Home loan rates are trending at record low. So, if you want to apply for a bigger ticket-size loan with a lower interest rate, home renovation loans could be a better option. Say you opt for a personal loan for home renovation; you may have to pay a higher interest rate.
- Flexibility: You can use home renovation loans for any repair or renovation work related to your house. However, note that you cannot use such loans for building furniture and such related work.
- Better repayment tenure than personal loans: Tenure for home renovation loan may go up to 15 years. This is significantly higher than personal loans that come with a tenure of 6 to 7 years.
- Pay with lower EMIs: Since home renovation loans come with flexible tenures and lower interest rates, the EMIs can be significantly lower than big ticket-size personal loans. This may significantly reduce the repayment burden off your shoulder. You can use our home renovation loan emi calculator to calculate your total EMI cost.
Steps to Apply for a Home Renovation Loan
You can apply for instant home renovation loans with these easy steps.
Step 1: Visit the lender’s website or app
Step 2: Select the loan amount and tenure
Step 3: Complete your KYC using Aadhar & PAN or any other required documents as specified by the lender.
Step 4: Upon verification, you will get an in-principle approval.
The loan disbursal may take a few more days depending on the lender’s terms of processing the loan.
Also Read: 5 Mistakes To Avoid While Applying For Personal Loans 2022
Documents Required for Home Renovation Loans
A salaried individual needs the following documents for acquiring a home renovation loan at Navi.
- Aadhaar Card
- PAN Card
- Last 3 months’ salary slip
- Photo identity proof
- Property-related documents
Self-employed applicants need to have the following documents in handy:
- Aadhaar Card
- PAN Card
- Last 6 months’ salary slip
- Photo identity proof
- Property-related documents
- Last 3 years Income Tax Returns documents
Also Read: What Is A Small Personal Loan?
Eligibility Criteria for Home Renovation Loans
You are eligible to apply for a loan if;
- Age: Minimum 21 years to 65 years
- Type of residence: Indian resident or NRI
- Type of employment: Salaried or Self-employed
- Place of residence: Permanent resident I Rent (where the resident has stayed for at least 12 months and above)
Final Word
Home renovation loans can be an excellent alternative for personal loans. You can use such loans to give your home a complete makeover. Just a small tip: make sure to compare different lenders and their interest rates before cashing in on one.
In case you’re looking for home loans, you can consider Navi Home Loans. Just download the Navi app, and get home loans up to Rs.10 crore at attractive rates starting at 7.39% p.a.
FAQs on Home Renovation Loans
1. Where can I get a home renovation loan?
You can get an instant home renovation loan from various lenders. However, make sure to use a home renovation loan calculator to calculate your monthly repayment obligations.
2. Can home loans be taken for home renovation?
A house renovation loan can be used to modify, refurbish, or renovate your home. The primary advantage of a house improvement loan is that it allows you to upgrade your existing home to a more modern design and a more comfortable living space tailored to your tastes and aesthetic preferences.
3. Can I take more than one renovation loan?
It is important to note that renovation and furnishing loans are two distinct types of loans. So, yes, you can borrow for the renovation loan and then another furnishing loan of up to 6 months of your income. You can calculate this using a home improvement loan calculator.
4. Is a housing renovation loan exempted from income tax?
Section 24 of the Income Tax Act of 1961 states that you can deduct up to Rs 30,000 per year on home renovation loans. It is included in the overall deduction of Rs 2,00,000 for interest payments on home loans taken for self-occupied property.
5. What can the funds from my home renovation loan be used for?
It can be used for;
- Works of painting and redecorating (e.g., wallpaper)
- Changes to the structure.
- External position within the house’s compound.
- Tiling and flooring
Before you go…
Are you looking to buy that house you’ve been eyeing 🏠 and you need a loan of up to ₹5 crore. Install the Navi app now and get instant in-principle approval right away! Interest rates starting at 8.60% p.a.
Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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