Your home is one of the costliest investments you make in your lifetime. You usually spend weeks and sometimes months finding the best one for you. However, it needs regular maintenance and upkeep to maintain its shine and look. You might also want to extend, improve or repair it to accommodate an addition in the family or make it more comfortable and trendy. The cost of home improvement can range from a few thousand to lakhs of rupees. Instead of digging into your savings to fund the improvement, you can avail a home improvement loan. Here is a brief guide on home improvement loan.
What Is a Home Improvement Loan?
A home improvement loan is an amount of money that you can borrow from a bank or financial institution to fund the improvement in your house. These loans can be unsecured personal loans without collateral or secured loans where you need to pledge your house for security. In addition, you can either find a dedicated improvement loan or can find an unsecured loan that can be used for home repairs, improvement, extension and renovation.
Features of Home Improvement Loan
- Tenure – You can take a home improvement loan for a tenure of up to 15 years. However, it would depend on your profile, eligibility and retirement age. If you are taking a small value loan, it is better to opt for a short tenure to save on interest.
- Quantum of the loan – If you fulfil the loan eligibility, you can get a loan up to 90% of the property value, depending on the loan amount you wish to avail, for a secured loan.
- Credit score – Like all other home loans, you need to have a good credit score to avail a home improvement loan. Having a credit score above 700 can help you get a negotiation advantage on the interest rates.
What can you use a home improvement loan for?
- Add a garage, portico or verandah
- To add an extra room or bathroom
- For whitewashing or painting of the house
- For electric wiring, electrical repair or adding fixtures
- For repair or renovation of bathrooms
- For remodelling of kitchen and adding cabinets and wardrobes
- To change the furnishing and upholstery of the house
- Change the leaky roof or complete roofing
- Waterproofing and damp control, etc.
How to avail a home improvement loan?
- Check your eligibility
Visit the lender’s website to check your eligibility or contact the lender for the same. Your eligibility would depend on your age, income, credit score, job profile, etc. Ensure you meet the eligibility before applying.
- Fill the application form
Furnish accurate details in the application form. You can find the application form on the lender’s website.
- Submit request documents
Furnish the requisite documents for the home improvement loans. You could be asked to submit identity and residential proof, income documents, banking details, proof of educational qualification, etc.
Home improvement loans can help you fund your house repairs and keep it looking new. However, when you avail the loan, you must be aware of all its aspects and read its fine print carefully. Ensure that you opt for an optimal tenure and pay the EMIs timely.