Every home is a window into the personality of the owner. Most homeowners decide to renovate their homes to improve their quality of life, whether for holidays or other special occasions. It is true that renovation of your home can be expensive; therefore, getting a personal loan to do so is always a smart move.

Our homes are where we seek solace and tranquilly. The way you decorate your home tells a lot about you, from the colours you pick to the wall lighting or furnishings. There are many styles that can make your house look fashionable.

With the aid of a bank personal loan, you may now plan on home renovation, whether you have a forthcoming special occasion or want to spruce up your home for the festival. The structure of your current home may be renovated, altered, or repaired using this financing. These loans include speedy processing, flexible repayment terms, reasonable interest rates, and no requirement for collateral.

Benefits of home renovation loan

• Lower interest rate than personal loan: A home renovation loan’s lower, fixed rate of interest is one of its biggest advantages. You pay a higher loan rate of interest and fees when you take out a personal loan. You can make significant financial savings.
• Lower EMIs: Your EMIs will be lower if you take out the loan at a lower rate of interest for a longer term. If you take out a loan with a higher interest rate, you will constantly pay a larger EMI. It will be a blessing for you to obtain a loan with the lowest EMI if you are a salaried person with less income
• Long duration: Home renovation loans typically have a long tenure of five to fifteen years, which makes it easier for borrowers to repay the loans.

Home renovation loan tax benefits

Tax deductions are available to those who purchase or construct a home. Additionally, it includes loans obtained for home renovations and repair work. Luxury items, like chimneys or pools, are typically not eligible for a tax deduction. The interest on home renovation loans is tax deductible for up to Rs 30,000 per year under Section 24 of the Indian Income Tax Act.

The total tax deduction for both the interest paid on a home loan and a loan for home renovation would be $1,50,000 if you were paying the home loan and claiming the tax benefit in this manner. The maximum benefit will be 30,000 on a home renovation loan if the interest on a mortgage is 1,20,000 or less per year.

It should be noted that under section 80 C of the Income Tax Act, which provides for a tax deduction in the event of home loans, one cannot claim any tax benefits on the principal amount of the house renovation loan.

Home renovation loan eligibility

• Individual or joint applications with another homeowner are both acceptable
• It is open to both salaried and independent workers
• The minimum age requirement should be 21, while the maximum age is only as old as one can retire
• Co-applicants for the loan must include each and every owner of the property

Documentation needed for a home loan

• Bank accounts for the previous six months and an application form with the most recent passport-size photo
• Original property title deeds
• A price estimate for the work from your architect
• Address verification and KYC records

 

FAQs

What is the general tenure of a home renovation loan?

Home renovation loans typically have a long tenure of five to fifteen years making it easier for borrowers to repay the loans.

Who are the co-applicants in a home renovation loan?

Co-applicants for a home renovation loan include each and every owner of the property.