Your dream home is not just about a roof over your head, but it is a reflection of your style and personality. Keeping it in good condition requires renovating from time to time because aesthetics and comfort matter as much as the location and construction quality. However, you need adequate funds to renovate your home, and for that, you no longer have to wait till you save sufficient money; instead, you can opt for a home improvement loan.
What is a home improvement loan?
A home improvement loan is a type of loan where you can avail funds for various purposes like; to modify, renovate or refurbish your home. They are similar to house loans. While a home loan enables you to purchase your house, a home improvement loan enables you to improve the home you already own. They are flexible, low-cost and a hassle-free way of making your home a comfortable living place. There are two kinds of home renovation loans: Secured home improvement loan, and Unsecured home improvement loan.
Secured Home Improvement Loan
This type of loan is one that uses your home as a guarantee. It’s often referred to as a second mortgage loan. The benefits are that you can get a higher loan amount at a fixed interest rate and have 10-15 years to pay it back. Also, the interest on this home loan is tax-deductible. The interest rate depends on factors like your age, your health condition, location, size of the property and more importantly, on your credit rating.
Unsecured Home Improvement Loan
This type of loan is one that does not use your home as a guarantee, which makes it more risky for the lender but not the borrower. They are usually smaller with a higher rate of interest and have to be paid back within 10 years or less. The rate of interest in this type of loan is largely dependent on your credit score, and also, it is not tax-deductible.
Home improvement loans have lots of advantages, which make them attractive. Few of the key aspects are as mentioned below:
Flexibility in usage
You can utilise the loan for a range of activities like repairs, extension, flooring, and painting of your entire house. However, you cannot utilise it for building furniture, fixtures or furnishings.
You can apply for this loan individually or jointly. If your home is jointly owned, then all owners of the property have to apply for the home improvement loan. You can also check the EMI that u will need to pay using the Home Loan EMI Calculator.
The loan tenure can be up to 15 years. The interest rate is similar to the home loan interest rate, and it could be either floating over the tenure of the loan or be fixed for a specified period.
- Duly filled application form
- Identity proof, income proof, employment proof and residence proof
- Last 6 months’ bank statement
- Cheque for processing fee
- Original title deed of your home
- No-encumbrance certificate
- Architect/engineer’s estimate of your improvement work
So, if you are looking to renovate your home, then apply for the home improvement loan online with us now!