Depending on one’s requirements and preferences, home renovation can involve significant expenses. While individuals often employ their savings for house remodeling or renovation, eroding the savings may not be a good option from the perspective of financial security.
Instead, raising funds via a home improvement loan can be a smart financial decision for homeowners. As these loans come with unrestricted end-use, the availed amount can be used for all renovation purposes.
From the elaboration given below, individuals can understand the primary reasons to obtain an online home reconstruction loan.
Home renovation loan – Meaning and reasons to avail
Typically, a home improvement loan is a customized personal loan that allows individuals to borrow an eligible amount, which can be repaid within a stipulated tenure. It is an unsecured loan as borrowers need not mortgage their property to obtain the credit.
Moreover, when applying for a home renovation loan, applicants must be careful about their eligibility. Usually, these eligibility measures can include age bracket, minimum monthly earning requirement, and excellent credit rating of not less than 750.
Further, once the eligibility requirements are fulfilled, a borrower can avail of the loan amount to fulfil the following home improvement needs –
- Maintenance of the house
- Repair to the interiors
- Remodelling of a room, kitchen, bathroom or the entire house, as required
- Painting of the house
- Woodwork and flooring
- Extended construction like patio
While these were the home renovation requirements that can be fulfilled with such a loan, these online advances also come with attractive features that make them a suitable funding option. Take a look.
Reasons to fund home improvement with a personal loan
- Instant funding
Because of its collateral-free feature, individuals can save a lot of time when availing the advance, especially when applying online. Once you fulfil all eligibility requirements and apply online, lenders can disburse the loan amount within a short time.
Also, based on the lender and their eligibility, individuals can acquire a home improvement loan amounting up to Rs.25 lakh.
- Flexible repayment tenure
Moreover, this financing facility enables individuals to repay the borrowed amount within a flexible tenure through EMIs. They can choose a repayment period of up to 60 months as per their affordability.
However, while choosing a tenure, borrowers need to be cautious about the instalment amount and avoid mistakes when they start a home renovation project. For convenience, individuals can use a loan EMI calculator that helps to decide the right principal amount and tenure that keep the instalments within their repayment capacity.
- Competitive interest rates
Applicants can find various home improvement loan interest rates from different lenders. Thus, thorough research and extensive comparison are required to find the most affordable rate available.
Notably, customers with a strong credit profile can obtain competitive interest rates. For example, if a borrower possesses a credit rating of more than 750, he/she might be able to negotiate for an interest rate lower than what the lender usually provides.
- Tax benefits
Typically, personal loans do not come with any tax deduction benefits. However, when this credit is availed for home renovation, borrowers can opt for a tax rebate of up to Rs.1.5 lakh under section 80C of the I-T Act 1961, within one financial year. Such tax benefits can cut down the overall cost for home improvement.
- Simplified documentation
Another reason to avail of a home improvement loan online is its easy and simple documentation process. Borrowers are required to submit these following documents for loan application approval in no time.
- KYC documents that can be Aadhaar, passport, voter ID, driving license, PAN, etc.
- Employment ID.
- Salary account statement.
- Salary slips.
Nonetheless, on the basis of the lender selected, individuals can be asked to produce other documents as well.
Further, one can opt for lenders such as Bajaj Finserv that bring pre-approved offers. These offers can significantly reduce all the hassles of a loan application and approval with zero documentation for existing customers. Applicants can find these offers on several financial products like business loans and personal loans. You can look at your pre-approved offer only with your essential contact details.
As for these personal loans, it is vital to know about home improvement loan and its terms of lending before applying for the advance. After checking the personal loan fees and charges for home renovation, one can apply for the advance online and expect fast loan processing.