A home renovation loan is one of the best choices to furnish your home with the dream interiors you have always wanted. You can use the funding for essential repairs, upgrading the structure of your house or expansion.
Home renovation loans come with various features like affordable interest rates, tax benefits, high Loan-to-Value (LTV) ratio, etc. However, before starting the application process, you must check the eligibility criteria and document requirements.
You also should compare different options and offers on home improvement loans. This helps ensure that you select the best option and make the most out of your loan.
Read on to know the features, eligibility criteria, and other details about home renovation loans.
Here are some of the prominent features of home renovation loans:
The home renovation loan rates are quite affordable, helping you save on your monthly outgo.
Some lenders offer up to 100% of the estimated amount that you quote.
You can select a repayment tenure for up to 20 years.
You can claim tax benefits on your home renovation loan under Section 24(B) of the Income Tax Act, 1961.
Transfer the remaining credit amount to a new lender offering lower interest rates.
Lenders levy nominal extra charges ranging between 0.25% and 2.00%.
While the the eligibility criteria for a home renovation loan varies across lenders, here’s a general list of parameters borrowers may have to meet:
Age: You must be between 18 and 65 years of age
Employment: You must be either a salaried or self-employed individual
Citizenship: You can apply if you are an Indian citizen or a Non-Resident Indian (NRI)
Credit Score: Your credit score must be above 700
Residence: You can apply for a loan for your permanent or rented residence, where you have stayed for a minimum duration of 12 months before applying
Income and Employment: You must have a stable source of income
Here are the documents you have to submit with your home renovation loan application:
Identity Proof: Aadhaar card, PAN card, driver’s licence, passport, or voter ID
Address Proof: Utility bills, Aadhaar card, driver’s licence, passport, or voter ID
Application Form: Duly filled application form with details mentioned on documents, with 3 passport-size photos
Income Proof for Salaried Individuals: Salary slips / salary certificate of the past 3 months, bank statements of the past 6 months, ITR, and recent Form 16
Income Proof for Individuals in Self-Employment: Profit / loss statements and balance sheets with schedules of the entity of business (for the past 3 years) validated by a CA, ITR for the past 3 years, and individual bank statements
Note that NRIs have to provide similar documents, such as a copy of employment contracts, quarterly salary certificates and statements of bank accounts for the past 6 months.
Choosing a home improvement loan is an important decision. However, the process can be tedious and time-consuming. Here are some points that you must keep in mind while choosing a home renovation loan:
You need to decide the kind of home loan that you want. Make an estimate of all the required changes to your home and then make the budget that would further help you understand the amount you need.
Considering all the available options for the loan will help you in getting the best deal. When picking a lender, consider these points:
Check the associated fees and charges
Avoid borrowing more money than you need
Use a home renovation loan interest rate calculator to plan your budget
Choose a convenient loan repayment duration
Check the loan disbursal time to see if you will get the funds when needed
Choose a lender that offers proactive customer service
Ensure you have a good credit score since it helps you get the loan quickly and easily
Once you decide on the lender, you need to start gathering the required paperwork. You can get in touch with the customer care executive online or offline to understand the formalities. You can seek guidance about the loan tenure, the loan options, etc.
On Bajaj Markets, you can choose from some of the leading lenders in India. To apply, follow these steps:
Click on the ‘APPLY NOW’ option on this page
Select your requirement and profession
Enter your mobile number and date of birth
Check your offers and choose one as per your needs
Upload and verify documents
Once you complete the application, you will have to wait for processing and approval. Upon approval, you will receive the sanctioned loan amount in your bank. You can apply either individually or jointly if you want to apply with co-applicants.
Getting a home renovation loan can be a smart decision, but you must plan ahead for it. Check recent interest rates, eligibility criteria and documentation to make the borrowing process easy.
For a convenient home renovation loan application process and other benefits, apply on Bajaj Markets. With a simple digital application, you can get a loan at affordable interest rates and enjoy various other benefits.
This is a financial instrument that creditors provide to offer financial assistance for renovating your home.
A home renovation loan is often considered to be similar to a home loan. A renovation loan is a type of loan that you take for uplifting/renovating or repairing your house.
If you fulfil the eligibility criteria, you can get a specific loan amount sanctioned for a particular term. You can repay the loan in this term, along with a specified rate of interest.
The maximum home renovation loan amount varies from bank to bank and depends on various factors. The maximum loan amount can go up to ₹40 Lakhs or more. Some lenders have an LTV ratio where you can get a portion of the estimated cost as a loan.
The eligibility requirement for a home renovation loan varies with different banks. Generally, salaried or self-employed individuals between the ages of 18 and 65 years with a stable income are eligible to apply for a home renovation loan.
The maximum tenure for a home renovation loan varies with different financial institutions. It can go up to 20 years or more.
You can get a deduction of up to ₹30,000 every year on the interest component of your repayment instalments for a home renovation loan. This is as per the provisions under Section 24B of the Income Tax Act.
No, you can use the money only for renovating your house and not purchasing furniture or electronics.
You can pledge the house itself or any other property as collateral for a home renovation loan.
You can expect the disbursal of the loan amount as soon as the lender verifies the property value and your documents and approves the application. You will receive an intimation from the lender about the same.