Taking a personal loan for home renovation - A quick guide

Nov 11, 2020

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It is quite common when we all walk through the aisles of IKEA or Home Centre and gape at the beautiful home décor and furnishing while dreaming of making it ours and renovating our home someday. As exciting as it sounds, home renovations can be an extensive process and be a bit heavy on the pocket. Nevertheless, it is something that every homeowner aspires to do as and when home decor trends change.

Renovating your home can be quite expensive whether you are meaning to relay your old boring tiles with chic marble flooring or classy wooden flooring, replace the conventional windows with big quaint French windows, or whitewash and repaint the entire house for any grand celebrations coming up at home. To support these dreams, taking a personal loan for home renovation is the most viable and best option.

Why is it important to renovate your home?

The house you are currently living in might have been bought many years ago by your ancestors. Hence renovating your house to suit your own taste, style and comfort is an option that should never be ignored. It is a means of value addition to living and upgrading your status quo which is sure to pay off later, as it increases your property value. There are three major reasons why people choose to renovate their homes and take a personal loan for home improvement.

-   For safety purposes – This is the most common reason for renovating homes. A house that might have been constructed a decade ago, might not be up to the safety standards in current times especially if you are living in a calamity-prone region. It is imperative to rebuilding stilts, roofs and some walls which are weak.

-   For aesthetic purposes- Almost everyone desires to renovate their homes according to the changing styles and trends. Be it the flooring, bathrooms, kitchenette, wall paints, windows, and furniture, home owners love to transform their living space into one that reflects their personality.

-   For celebratory purposes- Whenever there is an upcoming function in the house such as a wedding or engagement, Indian families most likely whitewash and repaint their homes to give it a fresh and vibrant look reflecting the celebratory mood.

Taking a personal loan for home renovation

The ideal way to fund a renovation is by taking a personal loan for home renovation. There are many banks and NBFCs offering home improvement loans which are basically unsecured loans as they don’t require any security where the customer has to pledge property or collateral against the loan.

The loan term can range anywhere from 12 months to 5 years depending on the loan amount borrowed. The repayment methods for a personal loan for home renovation are also fairly simple and can be done in EMI or monthly installments. The EMI amount will be calculated by the lending institution based on the loan amount requested, their interest rates, and processing fee.

Much like any other loan, the eligibility criteria for applying for a personal loan for home improvement is to have a good credit history or CIBIL score which shows the lender that you will have a decent track record of repaying loans. The loan is granted based on the annual income for salaried individuals and the annual turnover for entrepreneurs.

Applying for a personal loan for home improvement is always a better option than digging into savings. It also fares better against using a credit card to fund your renovation as credit card loans may have high interest rates and if you fail to repay the amount within the given billing period, you may accrue more debt.

Simple steps to get a personal loan for home renovation

-        Fill out the application form which will require basic details like Aadhar card number, address, PAN, annual salary, etc.

-        Use the loan calculator and enter the amount of loan required and the term of the loan depending on your repayment capabilities.

-        The lender will carry out the KYC process by asking you to submit proofs like salary slips, bank statements, and employee ID. Since it is an unsecured loan, no collateral will be asked to pledge. However, some lenders may acquire the home that you are renovating as a security against the loan.

-        Once you complete the KYC procedure, the loan amount applied for will be credited to your bank account. This can be done instantly or over 24 hours depending on the lending financial institution.

Gold loan for home renovation

A gold loan is an excellent alternative to applying for a home renovation loan as there is a surety that you will acquire the loan amount you want irrespective of your CIBIL score. The benefits of taking a gold loan for such personal purposes are many. To pick out one, since gold loans are secured loans, you can pledge your existing gold ornaments equivalent to the amount required for your home renovation project. In this case, the lender is sure to grant you the loan amount as collateral is acquired as security, thereby reducing the chances of your loan getting canceled. This combined with an extremely low rate of interest makes gold loan a popular choice of funding for every home owner’s home renovation plan.

Though there are several gold loan companies providing loans at competitive rates, Rupeek offers the best online gold loan services, with doorstep customer service and low interest rates in the market. Credit line loan is also a viable option as it allows the borrower to pay interests only for the sum used within the granted credit limit. You can now sit back, relax at home and apply for a gold loan at Rupeek, to fund the renovation of your dream home!

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