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HOME RENOVATION LOAN - ELIGIBILITY, INTEREST RATES & CHARGES
Home renovation comes with a lot of benefits. Renovating a home improves the quality of life, increases the net worth, and increases the property’s resale value. The only downside of renovating a home is that it can sometimes become a very expensive investment. Nowadays, apart from lending money to purchase a home, many banking institutions also offer home renovation loans to improve the property. Home improvement loans are a type of home loan where instead of buying purchasing a home, banks provide home improvement loans to improve a home you already own.
Benefits of Home Improvement Loan
Home renovation loans come with great benefits. A person can choose between secured and unsecured home improvement loans to avail of the benefits.
Lower interest rates
One of the most significant benefits of home improvement loans is that the interest rate is lower and fixed than a personal loan. In this manner, a borrower can save a major amount of money by getting a home improvement loan.
A borrower can easily avail of a home renovation loan with less documentation. When raising a loan request, the documents required are identity proof, address proof, three months salary slips, bank statements, and property title deed.
Under the Income Tax Act, a borrower can avail a tax benefit of up to INR 30,000 every year on the interest they pay. The only condition here is that the property is pre-occupied to avail the tax benefits.
Home renovation loans generally come with a more extended tenure period between three to twenty years. The flexible terms make it easier for the borrower to repay the loan in easy instalments.
Since a house renovation loan requires less documentation, a borrower can easily submit all the required documents online and get the required loan amount disbursed to their bank accounts upon approval.
Home Renovation Loan Eligibility
A property owner who wishes to renovate an already owned property song with a co-owner can apply for a home renovation loan. While scrutinising the loan application, banks would consider the following factors to sanction the loan.
Age of the applicant
A borrower must be at least 21 years of age to apply for a home renovation loan. The upper age limit to avail of the loan is capped at the applicant’s retirement age, 60 years of age. In the case of self-employed applicants, the upper age limit is capped at 65 years of age.
Occupation of the applicant
The higher income an applicant earns, the higher an applicant is eligible for a home improvement loan. Both self-employed and salaried individuals are eligible to apply for a house renovation loan.
The credit score of the applicant
Banks offer higher loan amounts to higher credit score applicants. Hence, an applicant with a good credit score can apply for a home renovation loan either individually or with a co-owner.
Stages of Home Loan Disbursement
Home loan disbursement is the process where the required amount is disbursed from the bank to the borrower’s account. There are various home loan disbursement stages while applying for a home renovation loan. In case the property is fully constructed, the loan amount is disbursed into the registered bank account in full. But if the property is under construction, the loan amount is disbursed into the bank account in phases. If a borrower is getting loan amount in phases, the EMI on home renovation will also be according to the amount received. Once the full amount is disbursed in the bank account, the EMI of the borrower goes up as well.
How to Apply for Home Improvement Loan?
Applying for a home improvement loan is very quick and easy which the borrowers can avail of it at their convenience. Muthoot Finance offers instant home improvement loans online tailor-made for various renovation needs. The home improvement loan at Muthoot Finance is available at highly competitive interest rates. An applicant can apply for an instant home renovation loan from Muthoot Finance's subsidiary - MuthootHomefin online or visit the nearest branch to initiate the loan application process.