Guide to Use a Home Renovation Loan to Finance Your House Renovation
Published: Oct 04, 2022
Your home is not just a space you live in; it is a reflection of your personality. It is the place where you feel most like yourself. Just like your other precious things, your home also needs to be maintained and taken care of. Renovations are required from time to time to enhance the value of your house and meet the evolving needs of the people who are living in it. Whether you recently bought a house or it is a place you have been living in for a while, the idea of renovating your house may bring a new level of excitement. But this is something that needs a great amount of money as well.
If you have been saving up for it then things are sorted but what to do if it is not a pre-planned thing? In such a situation, you can apply for a home renovation loan. It is one of the easiest and quickest ways to arrange the funds required to renovate your home.
What is a home renovation loan?
A home renovation loan is somewhat similar to a home loan except for one thing. Home loans are sanctioned for purchasing a home and these loans are to fund a renovation project of the house you already own. You can avail a house renovation loan for different purposes like renovation, repair work, new fixtures, etc. in an existing house.
There are two different types of home improvement loans: secured and unsecured. In a secured loan, you used your house as collateral. In unsecured loans, on the other hand, no collateral is required. However, an unsecured house renovation loan comes with higher interest rates and you cannot claim tax benefits on it.
Here are a few benefits of availing a home renovation loan to fund the renovation project for your existing house:
Attractive Interest Rates
When you avail a house renovation loan, the interest rates are lower than all other common financing options like personal loans etc. Generally, all lending institutions provide home improvement loans at floating interest rates. However, the interest rate offered to you depends on several factors such as loan amount, repayment capability, tenure, credit history etc.
If you go for a secured loan then you can avail a tax benefit on the interest component as well. However, there is a pre-set limit for the amount you can claim a tax benefit on.
While availing a home renovation loan, you get complete flexibility on the usage of funds. You can use the amount in any kind of work as long as that is related to your home structure. The most common things you can use this amount for include repairing work, painting etc.
Here is the list of documents you need to apply for a home renovation loan:
1) Photograph of applicant and co-applicant (if any)
2) KYC documents as (PAN/Aadhar/Voter ID/Passport/Driving License)
3) Address proof
4) Income proof
5) Copy of property papers
How to Apply
At Capri Loans, all salaried or self-employed individuals can apply for a home renovation loan in a few simple steps. These loans are available in the range of 2 to 25 lacs with tenure options up to 15 years. You need to fill out the loan application form and submit it along with the processing fees cheque and relevant documents.
Now that you know the easiest way to arrange funds to renovate your home, apply for a home renovation loan and customize your space to your preferences and needs.