Home renovation can include repair works for maintenance, change of interior set-up, redefining the overall look of the house, and much more. Therefore, carrying out a home renovation is an expensive ordeal for many. Thankfully, banks and other financial institutions offer a home renovation loan that can enable you to bear these expenses without hurting your budget. However, here are few important points that you can focus on while applying for a loan to renovate your house:
Decide the loan amount beforehand
It is likely that the renovation cost will exceed your expectation as the rates of raw materials and labor, etc., keep evolving with each passing week. Therefore, it is better to get a rough estimate of the expenses from the contractor and interior designer you will be hiring for completing the work.
Also, if you have already taken a home loan from the lender, then it is recommended that you apply for the home improvement loan with the same lender as it might increase the chances of approval.
Inclusions & Exclusions
While changing the interior can be considered as a home renovation, buying new furniture, kitchen cabinets, wardrobe, etc., does not fall under this category. Therefore, you should be aware of the things that lenders include under home renovation costs before applying.
However, painting your house, building an extra room, plumbing works, etc., are considered genuine home renovation works. If you need funds to carry out these expenses, feel free to apply for a home renovation loan.
Loan repayment schedule
Choose a loan tenor that does not put an excessive burden on your monthly expenses. Also, you can apply for small personal loans if you don’t need a huge loan. In that case, you can compare the personal loan interest rates offered by different lenders before making a decision.
Loan approval process
The time required for processing a home improvement loan can be a bit longer due to the procedures that the lenders have to follow before disbursing the loan amount. Firstly, you will need to submit the application form along with the necessary documents and details of your house.
Also, you will need to provide an estimate of the construction and other costs that will be incurred to the lender. Sometimes, a lender might even ask you to produce a plan approved by an architect before granting the loan. Even after completing all these formalities, the bank or NBFC might send a representative to check the ongoing work and its estimated cost.
Home renovation loans are approved immediately if your credit score is good and if you manage to showcase that your financial condition is stable. Your monthly income, assets, and liabilities will be evaluated by the lender before approving your loan application.
You can now apply for a home renovation loan from the comfort of your home, as most lenders provide an online application procedure these days. Some lenders even provide a home loan EMI calculator on their portal, which enables you to predict the tenor, loan amount, EMI, and other features that you are eligible for before submitting the loan application.
You may also check the pre-approved offers of different financiers before applying for a home improvement loan. This is because lenders offer affordable personal loan interest rates to their existing and new customers through such offers. Also, a personal loan would be disbursed far more quickly than a home improvement loan if the time taken for processing the loan is less and minimum documents are required.
For instance, Bajaj Finserv provides exciting personal loan offers, credit cards, medical loans, etc., to their selected customers. To verify your eligibility, you only need to provide your basic details such as name and mobile number on their website.