The financial market is afloat with several credit options, wherein home improvement loans are catching up with the popularity trend. Unsecured credits like personal loans for home improvements have gained popularity for their ease of availability.
· As of 2020, personal loans achieved a growth of 17%, standing at Rs. 25.3 lakh crore.
· This huge share occupied 28% of the total loan book.
Thanks to the availability of these unsecured funds, home improvement loans are fast catching up as a trend among Indians. You can thus start with the planning of your home remodelling and fund it adequately with a high-value personal loan for home renovation. Here’s all you need to know about home improvement loans to make a suitable decision.
Personal loan for home improvement: Things to know
1. Utility for diverse home improvement needs
A personal loan for home improvement helps fulfil various financing needs related to home renovation or remodelling, and can include –
– Upgradation of the house.
– Room/bathroom/kitchen repair.
– Flooring and/or tiling.
– Roofing/waterproofing.
– Electrical work and/or plumbing.
The list is inclusive and does not come with any restriction to end-use. As it is a type of personal loan, borrowers can also utilise the funds availed for any other adjacent or new financing need, including emergencies.
Further, the funding value can be high, extending up to Rs.25 lakh with select lenders, attracting affordable home improvement loan interest rates.
2. Minimum qualification and document requirement
The credit option can also be availed conveniently as it comes with minimum eligibility and document requirements. Applicants only need to fulfil the following criteria –
– Age between 23 and 55 years.
– Employment with either an MNC or a public/private company.
– A minimum credit score of 750.
– Residential citizen of India.
One must also provide the necessary documented proofs of identity, address, and income for streamlined loan processing.
3. Quick availability of funds
A home renovation loan from reputed lenders also comes with instant approval within a few minutes and fast disbursal within the next 24 hours of approval, enabling payments for required remodelling work.
· While attracting a little higher interest rates because of their unsecured nature, personal loans occupied the 2nd spot as one of the best home improvement loan options listed by a top digital publisher for their ease of availability.
4. Tax benefits
Unlike other personal loan options, a personal loan for home improvement also carries unique tax benefits. The Income Tax Act, 1961 allows borrowers to avail tax deductions for interest paid during loan repayment under section 24(b). The maximum amount deductible annually can go up to Rs.30,000 and is in line with the maximum interest deduction limit of up to Rs.2 lakh for home loan repayment.
One must also know a few other instances where a personal loan can provide tax benefits to maximise its advantages.
5. Collateral-free financing
A home improvement loan availed as a type of personal loan is also completely collateral-free, thus reducing the documentation requirements for processing. It also eliminates inferring any risk to a borrower’s personal assets, making it popular among individuals.
6. Convenient tenor selection
Individuals can also select a convenient period for loan repayment as per their financial capacity. This credit facility usually comes with a flexible tenor that ranges up to 60 months. They can use a personal loan calculator to assess changes to the EMI value based on the tenor adjustment and decide on a term that keeps the instalments affordable.
7. Flexi Loan facility
Another unique benefit of home improvement loan is that they come with the Flexi Loan facility. Lenders like Bajaj Finserv bring this Flexi feature on their personal loans for home improvement to enable borrowers to withdraw the desired amount from a pre-sanctioned limit. The facility also charges interest only on the amount withdrawn, thus enabling total interest reduction, reducing the EMIs by up to 45%*.
Borrowers can also adopt various ways to get the most out of their Flexi Loan facility.
The NBFC also simplifies and hastens loan processing with their pre-approved offers. Customers can avail of these offers on a range of financial products, including personal loans, business loans, and credit cards. You need to provide only your name and contact number to check your pre-approved offer.
While a home improvement loan is easily available today, you must also consider all essential costs of remodelling to apply for a suitable loan amount. Make sure to assess your maximum eligibility for the advance with an eligibility calculator before applying to best decide on the appropriate loan amount.
