Owning a home is a matter of privilege and a sign of blessing. Your home is identity, it reflects your status and achievements. It is your space of peace and comfort. As the saying goes, there is no place on earth like home. The first thing that creates an impression about your home is its structure. You can renovate your house to create a more relaxed ambiance, but if you do not have the means to manage your finances, you can always opt for home improvement loans.
Go for a home renovation to change or completely renovate your home. You have the benefit of upgrading your current home to a more contemporary structure, making it a more comfortable space for your family and your guests. Whether you wish to make structural changes, repairs, or renovate a particular room’s interior, a home renovation loan can cover all the costs of renovation.
Unlike home loans, home improvement loans are acquired to improve the home that you already own. Therefore, it is available for anyone who owns a house and is currently having a stable source of income.
Features of home improvement loan
The best part about a home renovation loan is that the loan amount can be used for a range of renovation activities in your home. For instance, you can do repairs, flooring, extensions, painting, etc. Any cost that involves renovation can be covered by home improvement loans. However, you may not have the flexibility to purchase moveable items like home furniture, fixtures, and furnishings, etc.
You can apply as an individual or have a co-applicant to avail of the required loan amount. However, it is mandatory to have a co-applicant if you have a co-owner. One of your family members can become the co-applicant, even if he/she is not a joint owner of the house.
The relaxed eligibility criteria that a borrower should know are:
- You must be either a salaried employee of a private or public company, or you must be a self-employed person.
- Your age at the time of application should be at least21 years old or 65 years at the end of the loan tenure.
- You must have an active bank account.
- Co-applicant is mandatory with a co-owner.
Flexible interest rate and loan tenure
The repayment tenure can start from 3 years and can go up to 15 years, giving you the flexibility to plan your budget and repay the loan amount within the stipulated EMIs with no default. The tenure that you will get will depend on your age, your income, and the age of your property.
On the other hand, the interest rate charged is like a home loan interest rate. There are two kinds of interest rates – the floating rate of interest or the fixed rate of interest. Also, lenders can offer you up to 90% of the insured declared value of your home as a loan. But, on but opt for an amount that you need. It would be wise to assess your needs and then opt for a home improvement loan.
It is more of a benefit. Since it is specific to home improvement loans, it can be counted as a crucial feature. When you take a home renovation loan, you are also eligible to get a tax deduction of up to Rs. 30,000 per annum as per section 24 of the Income Tax Act 1961. It is for the interest that you pay on a home renovation loan.
Also, it is within the overall limit of Rs. 200,000/- available on loan interest payment of your house. It means that the interest payment on your housing loan in India and home improvement loan can together qualify for a deduction of Rs. 200,000.
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The requisite documents to acquire a home renovation loan have been kept a bare minimum.
- A duly filled and signed application form.
- Address proof: Passport, Ration Card, Voter ID Card, Driving License, or Electricity Bill.
- Identity Proof: Passport, Ration Card, Aadhaar Card, PAN Card, Voter ID Card, Driving License, or Employee ID Card.
- Salaried Person: Salary slips and Income Tax Returns.
- Self-employed person: Bank statements.
Choosing to renovate your house can uplift your and your family members’ spirits and assure the satisfaction of a great home. When you choose to apply for a home renovation loan, you remove the financial constraints due to which you could not make changes to your home, making it a bit more liveable.
With the additional tax benefits that come with home improvement loans, you can and utilize the loan amount in whatever way you want to renovate your house.