To keep oneself living, one needs to upgrade themselves. The same goes for your house; you need to renovate to keep up with new technologies and the environment. Everyone is aware of home loans for a new purchase, but only a few are aware of the home renovation loan offered by various banking and non-banking financial institutions. This article will help you to know more about home renovation loans.
What is a Home Improvement Loan or Home Loan for Renovation?
Home renovation can be expensive due to the growing cost of material and labour. Hence, it becomes important to opt for home improvement loans offered specifically for home refurbishment. There are many loan offers that you can avail of for the renovation of your house.
Features of Home Renovation Loan
- There is a high loan-to-value ratio (LTV) of up to 100% of the renovation estimate or 90% of the property value, whichever is less.
- The long tenure of up to 30 years.
- Attractive interest rates.
- Tax benefits on a home loan.
- Availability of balance transfer facility.
- Minimum or no documentation for existing customers
- Available to both new and existing customers
Home Improvement Loans is the best option available if you are looking to spend a loan amount to renovate your house and are willing to mortgage your house. These loans have long tenure and are available at attractive interest rates starting from 6.65%. An additional discount of 0.05% is applicable if a woman is a primary applicant for such loans.
Eligibility Criteria to avail Home Improvement Loan
Eligibility factors for home improvement loans are similar to that of a housing loan.
- One can apply for house renovation loans individually or jointly.
- All owners of a home or property for the renovation of which the loan is availed must be co-applicants, but all co-applicants don’t need to be co-owners.
- The minimum age at the time of application must be 24 years or above.
- Repayments to be completed before the age of 60 years.
- Any salaried, self-employed or professional individual can apply for a home renovation loan.
- Duly filled home renovation loan application form.
- Identity, income, employment and residence proof
- Last 6 months’ bank statement
- A cheque for processing fee
- The original title deed of your home
- No-encumbrance certificate (is proof that the property in consideration don’t relate to any monetary issues)
- Architect/engineer’s estimation of your renovation.
Top Banks providing Home Improvement Loan
|Bank Name||Interest||Processing Fee|
|SBI||6.70 %||Min ₹ 10,000|
|HDFC Bank||6.75 %||0.50 %, Min ₹ 3,000 Max ₹ 10,000|
|Axis Bank||6.70 %||0.20 %, Min ₹ 10,000 – Max ₹ 25,000|
|ICICI Bank||6.70 %||0.25%, Min ₹ 3,000 – Max ₹ 5,000|
Other Loans you can avail for renovating homes
These are unsecured loans that can be borrowed to meet any of your requirements, including renovation, remodelling, furnishing, painting, restoration and making repairs in your house. Personal Loans for Home Improvement are offered by various financial institutions like SBI, HDFC Bank, Yes Bank, Bajaj Finserv.
You can opt for a personal loan for home improvement – if
- You have no collateral security or are not ready to guarantee.
- You think that your loan requirements are limited, and you require funds for not more than 3 to 4 years.
- You are a salaried employee working with a reputed corporate company and are confident of getting a low rate of interest on a personal loan.
- You need an instant and hassle-free loan.
Home loan top-up
Home loan top-up is an additional loan amount that you can get on an existing home loan. You are eligible to apply for a home loan top up if you have an existing home loan and if you have made consistent loan payments on your existing loan. In some cases, the interest rates offered on top-up loans can be higher than the interest rate on your home loan.
You can apply for a home loan top-up if
- You have an existing home loan from a bank. You can apply for an additional loan on your existing loan if you have already paid a part of the loan and have paid all the payments timely. For a home loan, apply online or you can also visit the bank.
- You are interested in going for a balance transfer loan scheme with a top-up loan, meaning you shift your loan to a new financial institution and avail of a top-up loan on your existing loan.