How To Apply for a Home Renovation Loan?

What is a Home Renovation Loan?

Are you wondering how do I get a home improvement loan? A Home Improvement Loan sometimes referred to as a Home Renovation Loan, provides you with the means to undertake repairs or renovations on your current residence. It's a subset of Home Loans that facilitates both minor touch-ups and major transformations to your home. 

Whether you're tackling necessary repairs, implementing structural alterations, addressing leaky ceilings, or giving your home a fresh coat of paint, this loan offers the flexibility to cover it all. Additionally, you can utilize the funds to furnish your home with furniture, fixtures, and various appliances like fans, geysers, and air conditioners.

Key Features of Home Improvement Loan

• The loan's duration varies depending on the lender, spanning from 5 years to 30 years.
• This loan is accessible for renovating your home, whether it involves installing bathroom and kitchen fixtures or extending your living space.
• Approximately 90% of the anticipated expenses for the intended project can be obtained through the loan.
• Borrowers have the option to select either fixed or floating-interest-rate loans.
• The documentation process is straightforward and devoid of complications.
• It is accessible to both salaried individuals and self-employed professionals aged 21 and above.
• Repayment is facilitated through a simple monthly instalment system.

Benefits of Home Improvement Loan

Consider the advantages of choosing a Home Renovation Loan:
• Utilize the loan amount flexibly to cover a variety of household expenses.
• Benefit from competitive interest rates and adaptable repayment terms, resulting in budget-friendly EMIs.
• The documentation process for the loan is straightforward, enabling you to access the funds with minimal paperwork.
• Apply for the loan either individually or jointly, with the option of including a close family member as a co-applicant, such as your spouse, parents, or siblings.

Eligibility Criteria for Home Improvement Loan

• Age- Minimum Age: 18 years, Maximum Age: 65 years
• Resident Type- Resident Indian, Non-Resident Indian
• Employment- Salaried, Self-employed
• Residence- A permanent residence or a rented residence where the applicant has resided for at least 12 months before applying.
• Credit score- A good credit score of at least 700 or more issued by a recognised credit bureau

Documents Required for Home Improvement Loan

1. Duly filled and signed application form
2. Bank statements for the last six months
3. Proof of identity, employment, and residence, PAN card 
4. No-encumbrance certificate
5. Original title deed of the house
6. Cost estimate of the project by an architect

Rate of Interest on Home Improvement Loan of Banks

Charges for Home Improvement Loan

How to Apply for a Home Renovation Loan?

1. Visit the official website of the loan provider/bank to know how do you get a home improvement loan.
2. Go to the 'Home Improvement Loans' section.
3. Select 'Apply Now'.
4. You'll be directed to an online application form.
5. Enter the required information into the form.
6. After filling out the form, click on 'Submit'.
7. If the details you provided are accurate, a representative from the bank will reach out to you to finalize the remaining steps.

How Does Adding a Co-Applicant Benefit in Home Renovation Loan?

Having a co-applicant for a home loan can alleviate the burden of sole repayment responsibility and offer significant relief. It also provides numerous advantages, such as a higher likelihood of loan approval, enhanced eligibility for loan amounts, and tax benefits for both parties involved. 

Tax benefits of a home improvement loan

A home renovation loan entitles you to a tax benefit on the interest component. Specifically, you can claim a deduction of up to Rs. 30,000 annually (under section 24) for the interest paid on such loans. This Rs. 30,000 deduction falls within the overall limit of Rs. 2 lakh available for interest payments on self-occupied homes. 

Conclusion

Hopefully now you know how can I get a home improvement loan. Revamping your home doesn't just enhance its functionality but also boosts your morale, offering the satisfaction of presenting your home proudly to loved ones. Accessible hassle-free home renovation loans alleviate financial constraints, empowering you to enhance your home's livability and appeal. Additionally, the tax deductions associated with these loans further improve their benefits. So, don't hesitate; transform your home into the haven you've always envisioned.