Planning to renovate your house? If yes, a home improvement loan may be the right financial solution for you. You can avail a home improvement loan to modify, refurbish or renovate your home. The prime benefit of a home improvement loan is that it allows you to upgrade your existing home to a contemporary design and a more comfortable living space, customized as per your tastes and aesthetic preferences. This loan is also beneficial for many because depending upon the requirements these loans can span from 12 to 60 months, thereby making it more affordable for people who are looking to renovate their homes over the time period.
The primary benefit of these loans is that they enable you to redesign your existing living space in a creative manner without having to invest large sums of money. These loans are ideal for upgrading your existing home and adding mod-cons keeping in mind the latest trends and designs. The borrowed amount can be used to upgrade kitchens, renovate bathrooms; build swimming pools or add an extra storey to your house. You can opt for flooring, electricity work, painting or the installation of new sliding windows as part of the renovation process.
These loans are designed for those people who want to modify their houses or add some special features. The loan has low interest rates and flexible repayment periods. You can apply for a home improvement loan through the bank in which you have a current account or a credit card. This will make it easier for you to manage your finances when making repayments on your home improvement loan.
Why Should You Opt For A Home Improvement Loan?
Though there are various ways in which you can fund your home renovation, home improvement loans have a few advantages that make them attractive. Here is a look.
Lower Interest Rates: Home improvement loans offer competitive rates and are secured against your home ownership. They also give you peace of mind, as they are repaying over the fixed time period of a home loan. If you’re renovating or upgrading your home, a home improvement loan is an option to consider. An ideal option for home owners who are looking for financing for their home renovation, a home improvement loan (or a line of credit or cash-out refinance based on the value of your home) has lower interest rates than personal loans, when the loan is secured by a home.
Tax Benefit: Home improvement loans are flexible and can be availed for several purposes, including renovation of the living areas in the house to add value to your property. As a homeowner, you may be tempted to just take a home loan to carry out repairs and new additions without giving much thought to the tax parameters. The interest component of such loans can fetch you a tax benefit on the interest component, that is, you can avail a deduction of up to Rs. 30,000 per annum (under section 24) for the interest that you pay on these loans. You can take a home improvement loan for home improvements and increase the value of your home. You can also take it to repay an existing loan such as a car or personal loan. What’s most beneficial is that you’ll be able to claim the interest component towards repayment of the home improvement loan as a deduction on your income tax, subject to Rs. 30,000 per year under section 24 of the Income Tax Act.
Minimal Documentation: A home improvement loan allows you to carry out structural enhancements and repairs on your house. The amount you need will depend on the nature of work that has to be carried out. A home improvement loan is a self-amortizing loan which means that your repayments will go towards both the principal and interest, reducing your total tenure significantly. The EMI gets charged within your monthly housing loan instalment and there are some varied options for tenure. You can choose between five years, seven years, 10 years or any multiple of five years to 20 years (as per policy). Home lending has become competitive with home loan interest rates and charges being closely monitored by the RBI. These rates are also available for loans that have tenure of up to 15 years, as against the earlier norm of 7 years for home loans. As a result, it simplifies documentation requirements significantly.
Quick Processing: Home improvement loans are processed quickly as there is minimal documentation required. So you can get the renovation work started at the earliest without long wait for your loan application to be approved. You can also request an amount as big as with any other type of loan to finance your home improvement project. When you opt for online home loan, your application gets processed quickly. This is because the documentation to avail such a loan is minimal and hassle-free. Also, you can get your renovation work started at the earliest without any long wait period for your loan application to be approved.