A home is a peaceful sanctuary that you want to keep close to and be able to take care of it like any other possession you have. To get your home to the best condition, a home improvement loan is your best friend. Keep scrolling through the blog to know all about home improvement loans.
To see your sanctuary falling apart makes any individual want to fix it and make the place as it was before. The peeling paint, the damp wall, or your favorite furniture looking like it needs a redo; you would wonder if you could find enough finances to fund these needs.
It has become easier to upgrade, reform and refurbish your space without buying through your savings. Many banks offer a home improvement loan for almost all your home repayments; whether it is for a small renovation, essential repairs, or just changing the overall look and feel of your home, you can get a home improvement loan. Getting a home renovation loan is part of the entire process. It is important to note that being a responsible borrower is an integral part of the process.
What is a Home Renovation Loan?
A house renovation loan is taken to pay for home renovations or improvements in your home.
The Income tax act, 1961, under section 24, allows an interest component on your home improvement, making you eligible for tax benefits of up to 30,000 per annum.
Many financial institutions will offer you easy and quick access to funds for home improvement.
Every scheduled bank and other financial institution, like NBFCs, provide some form of loan for home improvement.
Anyone who fits the eligibility criteria can take a loan in no time at all. These loans are given solely to renovate the individual’s property.
The interest rates for these loans can vary from bank to bank, depending on their policies and standards.
For anyone checking about eligibility can login into Buddy Score for a quick eligibility test and use Buddy Loan and find the best feature for your use.
Home Renovation Loan Interest Rates
Interest rates start at 8.25% p.a. Similarly, the maximum loan amount varies, and the repayment tenure could be from 1 year to 5 years.
Your credit score and credit profile would benefit you in getting an instant personal loan from some lenders.
Below is a sampling of the interest rate, max loan disbursal, and repayment tenure of some banks and financial institutions that offer loans for home improvement.
| Bank/ Lender | Interest Rate | |
| HDFC | Starting from 8.40% p.a (Both Fixed and Floating interest rates). | |
| State Bank of India(SBI) | 8.40% – 9.05% p.a. (Floating interest rate). | |
| ICICI Bank | 10.25% p.a onwards. | |
| Bank of Baroda |
|
|
Kotak Mahindra Bank |
Home Loan-
Home Loan Balance Transfer
|
|
| Punjab National Bank | Floating Interest Rate
For loan amount up to 35 lakhs
For loan amount greater than 35 lakhs
|
Some of the top NBFCs offering Home renovation loans
You can use this list to find the best resource for changing your home the way you like it.
Bajaj Finserv
Bajaj Finserv offers home improvement loans, quickly and without hassle. They are one of the leading NBFCs and have several features that benefit the loan they offer. Apply here for a quick loan.
Interest Rates – 11% p.a. onwards.
Features –
Loan Amount- ₹ 1,00,000 to ₹ 35 Lakhs
Tenure- 12 – 84 months
Age – 21 – 80 years
Minimum Monthly Salary- As per bank
Processing Fees- Up to 3.84% of loan amount(inclusive of applicable taxes)
Pre-Closure Charges-
- For Term Loan 4.72% (Inclusive of applicable taxes) on the principal outstanding amount as on the date of such full prepayment.
- Flexi Term and Flexi Hybrid Loan – 4.72% (Inclusive of applicable taxes) on total withdrawable amount (total loan amount that you can withdraw under Flexi Term Loan from time to time as per the repayment schedule on the date of levy of such charges).
Part Payment Fees – 4.72%(inclusive of applicable taxes)
Tata Capital
Tata capital offers loans up to rs 25 lakhs with minimum documentation and quick disposal. Anyone looking out for an NBFC for a loan cannot forget Tata Capital. You can read about all their features below
Interest Rates – 10.99% p.a. onwards.
Features –
Loan Amount- ₹ 1,00,000 to ₹ 25 Lakhs
Tenure- up to 240 months
Age – 21- 65 years
Minimum Monthly Salary- Min salary of 20,000 p.m
Processing Fees- Refer to bank
Pre-Closure Charges- Refer to bank
Part Payment Fees – Refer to bank
Manappuram Finance Limited
Manappuram Finance Limited provides you with home improvement loans to help you build the house of your dreams. The money can be used for interior and exterior modifications of your home. They offer loans to customers from salaried, non-salaried employees and professionals as well as to customers belonging to other income categories.
Interest Rates – Starting from 9.99%.
Features –
Loan Amount- ₹ 1,00,000 to ₹ 25 Lakhs
Tenure- up to 240 months
Age – 21- 65 years
Minimum Monthly Salary- As per bank
Processing Fees- Refer to bank
Pre-Closure Charges- Refer to bank
Part Payment Fees – Refer to bank
Muthoot FinCorp
Home improvement loan that is easy and has a flexible tenure. They also offer a wide range of eligibility criteria making sure you can always get the best for your home.
Interest Rates – 12-16% p.a.
Features –
Loan Amount- ₹ 2 lakh to ₹ 25 Lakhs
Tenure- 3- 20 years
Age – 21- 65 years
Minimum Monthly Salary- As per bank
Processing Fees- Refer to bank
Pre-Closure Charges- Refer to bank
Part Payment Fees – Refer to bank
LIC Housing Finance Home Loan
LIC offers various types of housing loans based on your needs, from home renovation loans, home loan top up, home extension loan, and so on. For home renovation loans the specifications have been mentioned below. Their loans are quick with simple documentation and low EMIs.
Interest Rates – 6.70% p.a. Onwards (floating).
Features –
Loan Amount- ₹ 1 lakh to ₹ 10 crore
Tenure-
Max tenure –
- For Salaried- 30 years
- Self Employed – 25 years
Age – 21- 60 years
Minimum Monthly Salary- As per bank
Processing Fees- Up to 0.50% + GST
Pre-Closure Charges- Nil
Part Payment Fees – Nil
Shriram Housing
From small changes to big changes, you can choose Shriram housing for several functions. Their loans start from 1 lakh and go up to 10 crore. You can get up to 90% of the property cost for your renovation.
Interest Rates – Starting at 9.5%p.a.
Features –
Loan Amount- ₹1 Lac – ₹10 Crore
Tenure- Up to 25 years
Age – 24 -70 years
Minimum Monthly Salary-
- For Salaried-30,000
Processing Fees- Up to 2.5% of the loan amount plus applicable taxes.
Pre-Closure Charges- Nil
Part Payment Fees – Nil
Indiabulls Home Loan
With end to end online loan processing , you can get quick, easy home renovation loans through minimal documentation. They come with many benefits from having no prepayment charges, multiple loan options and attractive interest rates.
Interest Rates –9.30% onwards
Features –
Loan Amount- ₹ 50,000 to ₹ 25 Lakhs
Tenure- Max 15 years
Age – Refer to bank
Minimum Monthly Salary- As per bank
Processing Fees- Refer to bank
Pre-Closure Charges- Nil
Part Payment Fees – Refer to bank
Renovation work is a necessity for homes after some time. Repainting, paneling, and reinforcing structural integrity help maintain the durability of a home. However, loan aggregators help you with the best repayment options for five years.
Explore Buddy Loan to reap more benefits from a home improvement loan.
Home improvement finance can also be used for beautification – making the home look prettier and cozier, increasing conveniences, and so on. Almost every bank offers home improvement loans. Interest rates start at prices depending on the CIBIL/Credit score.
Banks usually provide home renovation loans at interest rates depending on your monthly income, credit score, loan amount and so on. Home renovation loans tend to be the same or might be slightly higher than regular home loans.
Top-Up Home Loans for Home Renovation
Home loan extra top-up fund is offered to existing home loan borrowers over and above the existing home loans.Any borrower requiring extra financial needs for their home can avail of a top-up home loan to improve their homes. The loan tenure of top-up home loans should be the same as the outstanding home loan tenure.
Home Loans VS Home Improvement Loans- What Is The Difference?
The difference between a home loan and home renovation loan is fairly simple.A house loan allows borrowers to borrow a specific amount to pay for a home. Lenders and borrowers sign an agreement wherein the borrower pledges to repay the loan over a particular period, over an interest rate.
A home loan is a secured loan because the lender uses the house as collateral to grant the loan. An upfront loan might be taken out to purchase a new home.
Home Improvement Loan
A home improvement loan allows for a rebuilding of a home, helping you give a new appeal to your home.
A home renovation loan helps you improve a house you already own. They are flexible, affordable, and a hassle-free way to furnish your home.
There are two basic types of loans available for home improvements:
- Secured home improvement loans
- Unsecured home improvement loans.
Secured and Unsecured Loans
Loans can be secured or unsecured. In the case of fast loans, the applicant has to mortgage some fixed assets like land, house, or apartment. Some banks and financial institutions also accept gold jewelry.
In unsecured personal loans, the bank gauges the applicant’s ability to repay the loan. Each bank has an eligibility criteria to decide whether the borrower can repay the loan.
Usage of a Home Improvement Loan
In the case of home renovation loans, the money can be used for flooring, re-tiling, re-roofing, repainting, extending the home, and even purchasing decorative items. Repair, restoration, and refurbishment activities can be done with this loan.
The best way to use this loan is to avoid purchasing non-essential decorative items.
- It is best to focus on repair and vital work first. Making the home robust, durable, and safe should be prioritized.
- If there are surplus funds, consider planning a repayment rather than wasting money on decorative items.
- Logic has it said that decorative items must be purchased with one’s surplus income and not from a home improvement loan!
Features of Home Improvement loans
- Home renovation loans are paperless. The process is entirely online. Disbursal of loan is within 72 hours.
- There are secured as well as unsecured loans.
- Secured loans need collateral. The loan amount could be higher than unsecured loans.
- No collateral or security deposit is required for unsecured home refurbishment loans.
- Tax benefits can be availed on home alteration loans. The tax deduction is on the interest paid. Under Section 24 of the Income Tax Act, Rs. 30,000 tax deduction on appeal can be availed.
Home Improvement Loan Tenure
- Maximum term can be up to 30 years.
- You cannot choose your Loan tenure. Even if requested, the options would be next to nothing. For example, if a person wants a 15 years repayment period, the bank may or may not offer this repayment tenure.
- Loan repayment tenures are decided by the bank or lending institution. It is dependent on several factors. The borrower’s age at the loan’s maturity is the primary determinant.
- The other determinants are the home’s age and the borrower’s income at loan maturity.
Fixed or Floating Rate for Home Refurbishment Loan
- Interest rates are automatically adjusted per prevailing market conditions in floating-rate home renovation loans. This is advantageous as well as has its disadvantages. It is beneficial when the interest rates dip.
- Fixed interest rates do not change.
Eligibility Criteria for Applying for a Home Renovation Loan
Basic Criteria-
The borrower should be:-
- Above the age of 21 and below 60.
- Salaried or self-employed.
- Resident of India.
- Individuals of any gender can avail of these loans.
Documents Required For Home Improvement Loan
Different banks have different requirements. The following is a list of the comprehensive documents that all banks may require for furnishing your loan improvement loan.
- Application form for the home improvement loan. Passport-size photographs.
- Salary receipts of the past three months along with Income Tax Return or Form 16.
- Bank statements for the last six months.
- For self-employed people, IT/ITAO copies.
- Property title copies
- Renovation estimates. A qualified and registered architect’s estimation of renovation certificate. The certificate covers types of expenses and overall estimated costs (including labour).
- Address proof and identity proof. It can be any of the documents from the KYC list. For address proof, a passport copy can be given. For identity proof, an AADHAR card or voter ID can be given.
Can I get a Home Improvement Loan without a PAN card?
A PAN card comes under the KYC (Know your customer) category, i.e. the KYC documents serve as a way to identify and verify a customer for banks and lending institutions.
Availability of a loan through loan aggregators can suffice your financial needs with a PAN card. It is mandated that any loan is to be approved over PAN details.
Moreover, Buddy Loan encourages borrowers to keep their PAN card handy while applying for a loan.
Documents under KYC are ration cards, driving licenses, PAN card, passport, AADHAR card, etc. So, a home improvement loan can be obtained even without providing a PAN card.
Age Restrictions For Availing Home Renovation Loans
Most banks want the applicant to be at least 21 years of age and not more than 65 years of age. The upper limit is, however, dependent on the bank. Few banks could have a higher upper limit, such as 70 years.
Process of Applying for the Loan
1: Visit buddyloan.com or Download & install the Buddy Loan app (Android or iOS).
2: Open the personal loan application page. Provide the mobile number and enter the received OTP.
3: Specify the desired loan amount & personal email. Next, choose the Personal Loan option
4: Choose the employment type (Salaried, Self-Employed, or Student) and the salary mode (bank or cash).
5: Enter your work details (Including company name, years of service and Designation)
6: Enter your personal details (Including Full Name, PAN, address, DOB & Gender)
7: Provide your communication address, and income details and Click the ‘Submit’ button.
Also Read: Get a Personal Loan: A Complete Guide on Eligibility & Documents
Some other Tips While Applying for a Home Improvement Loan
Adding co-applicant
While getting a home improvement loan, you can add a co-applicant, which proves beneficial in various ways, ranging from-
- Helping in maximising the loan amount.
- To get a better interest rate if the co-applicant is a female( Female co-applicant need not be the owner)
Note-
(Few financial organisations or banks don’t offer this option; please check this with your lenders before applying for the loan online.
While applying for a loan online, also take into account charges like
- Processing fees
- Property Insurance
- Incidental expenses
- Statutory charges
- Other charges
Did you know?
There are no preprocessing fees if you apply via Buddy Loan.
It is advisable to research and compare the offers until you make the final decision. Some websites will offer you multiple options and show you a comparison chart.
Personal loans have been helping many people who have been looking for additional support to repair their homes. Since everything has moved online, it has become even easier to get loans approved. Making sure to repay the amount in time and being a sensible borrower will also benefit you in the future.
If you want to expand your home’s living area, a home improvement loan is the best option.
These are undoubtedly one of the most affordable solutions to meet this desire for additional space in situations like a growing family or the requirement for office or study rooms.
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Frequently Asked Questions
Q. What is a home improvement loan?
A. It is a loan for remodeling your home in methods like tiling, flooring, internal and external plastering, painting, etc. without changing the structure or carpet area.
Q. Who can get House Renovation Loans?
A. You must be an Indian citizen over the age of 21 who works a regular job or is self-employed in order to apply for a loan for home renovations. You can apply for a home improvement loan whether you own the property alone or jointly with someone else. Home improvement loans are offered by several banks at competitive rates. However, the eligibility would vary slightly amongst banks.
Q. What is the longest term I am eligible for a house renovation loan?
A. The terms for home renovation loans are different for different banks, some may offer up to 30 years of repayment and some may be up to 15 years.
Q. Do I Receive Tax Benefits for Loans for Home Renovations?
A. Yes. According to the Income Tax Act of 1961, you are qualified for tax benefits on the major components of your home remodeling loan. Please inquire with our loan counselor about the tax savings you may be able to receive on your loan since they may change each year.
