Why Are Home Renovation Loans A Good Option?

Lower interest rates-home renovation loans

When you searching for Home Renovation Loans to fund your house renovation, the interest imposed on such loans is usually very high as they don’t come with a collateral clause and the repayment period is also short. 

On the other hand, Home Improvement Loans are typically available at similar interest rates to you avail a regular Home Loan for a new house purchase. And the availability of the property as collateral makes you get an affordable interest rate as banks can trust there is no chance of default, and even if it happens, there is collateral that can be used for loan recovery. You can use a House Loan calculator to assess EMIs and tenures that you can manage without burning a hole in your pocket. 

– Flexibility to use

You can utilise Home Renovation Loans to carry out different repairs and renovations on your existing home. Also, you can use the funds to add more rooms to your house to make it more spacious and accommodate more family members. Further, you can build a new balcony to enjoy nature during your free time. If there is any leftover money from the loan, you can add new cabinets to all your bedrooms or get a modular kitchen. This secure loan option will give you the flexibility and freedom to renovate your home according to your taste and needs.

– Tax Benefits:

Home Renovation Loans can also offer a tax deduction on the interest paid. A tax deduction of up to Rs. 30,000 per year can be availed under section 24 of the income tax act on the interest paid on these loans. This deduction is within the set overall limit of Rs. 2 Lakh on interest payments on loans for self-occupied homes. This means that interest payments made on purchasing or building a new home and Home Renovation Loans combined qualify for an Rs. 2 Lakh tax deduction. 

– Quick Processing

Home Renovation Loans are processed faster than regular Home Loans as the documentation required is minimal, and other steps can be easily completed. Hence, you can start the renovation or repair quickly as the funds are released instantly. 

– Minimal Documentation:

Home Improvement Loans require minimal documentation compared to other secure financing options. Only basic documents such as ID proof (PAN card), income proof (salary slips), passport photographs, house property title deed, etc. If you are already a Home Loan borrowing customer at the bank, getting Home Improvement Loans becomes even simpler. Learn About Home Painter Pitfalls.