Features of Home improvement Loan

Why to choose a Home Improvement Loan?

March 23, 2022 • 427 views
Author: PoonawallaFincorp Category: Home Loan

A home is not just a roof over your head. It is a reflection of your social status, pride, and accomplishment. After all, not everyone can afford to own a house with the inflation rate increasing perennially. And when you live in a self-owned house, it’s not only the aesthetics and comfort that matter but also the construction quality and furniture of your home.

You need to ensure the best ambience, wall, and flooring conditions. These things provide you with a peaceful habitat to live in and create an excellent impression of you in the mind of your guests. Moreover, a house reflects the personality of the people living in it.

However, every house suffers wear and tear over time. The furniture starts to catch rust and wall paints lose their sheen. That is why it becomes necessary to refurbish and renovate your home from time to time. You can also upgrade the furniture and furnishings of your house to increase its aesthetic value and design quotient. You can also customise everything as per your taste and preferences.

But doing so may require a significant amount of funding. From masonry work to paint job to furniture upgrade to interior designer fees, every expenditure can add up heftily to pile up into a large sum of money. On average, you may require several lakhs of rupees to improve or renovate your home.

Arranging such a considerable amount instantly may not be possible for you. Moreover, even if you’ve saved a good chunk of money till now, it’s never recommended to break your savings for a purpose like home renovation. It’s because such a step can leave you financially vulnerable to sudden emergencies, such as a critical medical issue, loss of income, an unexpected natural calamity, etc.

What you can do is apply for a home improvement loan with a lender of your choice. It can help you get access to the necessary finances required for the improvement or renovation of your house. You can then repay the amount in Equated Monthly Instalments (EMIs). Continue reading to know more about home improvement loans, home improvement loan benefits, home improvement loan eligibility, and how you can apply for a home improvement loan.

What is a home improvement loan?

A home improvement loan is a particular type of loan provided to help the borrower improve or renovate their home. You can use a home improvement loan to avail funding for various purposes, such as remodelling, modifying, or refurbishing your house.

Home improvement loans are very similar to home loans. While a home loan enables you to buy a new housing property, a home improvement loan allows you to improve the house you’re already living in.

Almost all home loan lenders provide home improvement loans. These loans are flexible, affordable, and easy to avail of. There are two types of home improvement loans – secured home improvement loans (which require collateral) and unsecured home improvement loans (which are collateral-free).

How should you opt for a home improvement loan?

You can apply for a home improvement loan to turn your house into a comfortable living space. You can then repay the amount to the lender in easy EMIs spread over a convenient tenure. Let’s look at the home improvement loan features and benefits that make it a prudent choice for the renovation of your home:

1. Meet all your home renovation costs

By availing of a home improvement loan, you can get access to a high amount of funding required for the renovation of your house. You can share the estimate of your house repairs with your lender and get up to 100% financing of your renovation estimate. You can utilise these funds for a range of home renovation activities, including repairing your house structure, painting walls and ceiling, repairing or up-gradation of flooring, the extension of spaces, etc. You can also use your home improvement loan to repair or purchase movable items of your house, such as furniture, electronic appliances, fixtures, and furnishings. However, it depends upon the discretion of the lender.

2. Lower interest rates

A big advantage of using a home improvement loan for the renovation of your house is that it comes with lower interest rates. You can avail of a secured home improvement loan at a competitive rate of interest, ranging between 6 and 9 percent per annum on a reducing basis. Lenders usually provide home improvement loans at the same interest rates as home loans. All you need to do is keep your house as collateral until you repay your entire home improvement loan amount.

3. Easy eligibility and documentation

Home improvement loans entail relatively easier eligibility criteria and minimal paperwork as compared to other modes of financing. Although home improvement loan eligibility criteria vary from lender to lender, you just need to fulfil some basic requirements in terms of age, monthly income, and house ownership. You can apply for a home improvement loan if you’re the sole owner or a joint owner of your house. In the case of joint ownership, all owners have to necessarily apply for a home improvement loan. Home improvement loan documents include a duly filled loan application form, identity and address proof of the owner(s) of the house, income proof, and house ownership papers.

4. Quick processing

Since home improvement loans involve easy eligibility criteria and minimal paperwork, they are processed and disbursed quickly by lenders. Usually, lenders don’t take more than three to four days to disburse a home improvement loan. It means that you can get quick access to finances with a home improvement loan and start your house renovation without any delay.

5. Convenient loan tenure

Another benefit of availing of a home improvement loan is that you can get access to finances for your house's renovation and repay them in easy EMIs. You can choose a convenient tenure for your home improvement loan as per your requirements and repayment capability. Generally, lenders provide home improvement loans with a tenure of up to 15 years. Your actual loan tenure would depend on several factors, including your loan amount, age, income, and the condition of your house.

6. Tax benefits

A home improvement loan can also help you receive certain income tax benefits. You can avail of home improvement loan tax benefits of up to Rs. 30,000 per annum under section 24 of the Income Tax Act of 1961. You can claim this deduction of Rs. 30,000 within the overall limit of Rs. 2 lakhs available on the payment of the interest component of home improvement loans.

To Conclude

Lower interest rates, quick processing, convenient tenure, and a high loan amount are some of the benefits of availing of a home improvement loan. However, it’s crucial to compare various lenders and choose the right one as per your requirements and preferences.

At Poonawalla Fincorp, you can avail of a gamut of loans, including home renovation loans, personal loans, and business loans. You can apply for these loans online from the convenience of your home.

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