Home renovation is an essential expense. You must invest on your home from time to time to maintain its value and uplift your quality of living. Whether it is painting the walls, repairing the pipes, installing new electronic appliances, upgrading the lighting or redoing the interiors, home renovation is an essential expense. But it becomes even more pressing when you have to deal with a crisis like a natural calamity or a fire breakout. In such situations, you must start the renovation work at the earliest but the high expense of redoing your home stands as a big barrier. As such, an instant cash loan can be your best bet.
There are a host of home improvement loans to choose from. Thus, it becomes important to compare the different types of such loans. You can make life easier by downloading the best loan appto compare your loan offers. The EMI calculator on the loan app can help you calculate the crucial parameters like your monthly installment, the loan amount and loan tenure that you should go for.
But before you avail a home renovation loan you must know everything about it. After all, it is a long term financial commitment that you are getting into.
Home Renovation Loans: Different Types
Among home improvement loans, you have two options. These include a secured home improvement loan, and a personal loan or unsecured loan that you can use for refurbishing your home.
In the case of secured home renovation loans, you can avail a higher loan amount at fixed interest rates for a duration ranging from 10 to 15 years. If you have a pre-existing home loan then you can avail a top-up loan on that for home renovation. In this case, the papers of your asset which is your home would be submitted with the bank. You can get tax benefits on the interest paid on your home renovation loan under section 80C.
An unsecured home improvement loan is best if you want a smaller loan amount. The interest rate on this loan would be a bit high as compared to secured loans. The tenure for unsecured loans is also less than that of secured loans.
Home Renovation Loans: Things to consider when applying for them
Here are some important considerations before applying for an instant cash loan for your home décor projects.
Check the Eligibility Norms
Each financial institution has its own set of eligibility criteria for approving home renovation loans. To that end, they consider some aspects such as income and age. On your part, make sure you assess the eligibility criteria of all loans and opt for the most suitable one.
Compare the interest rates of different loans
Before offering an instant cash loan to a borrower, lenderscheck their repayment capacity and credit history. Based on these factors, they determine the interest rate. It also depends on the operational costs and profit margin of the lender. Thus, the interest rate varies from lender to lender. Therefore, you must compare the interest rates form different lenders before finalizing your loan. You might get better interest rates if you opt for the loan through the best loan app.
Make sure to get your documentation in order
When applying for a home renovation loan through the best loan app, you have to submit various documents. These include income tax returns, bank statements, address proof, salary slips, and identity cards. The chances of your loan application getting rejected are much lesser if your documentation is in order.
Work towards a good credit score
Credit scores are an indicator of your creditworthiness. Lenders use your credit score as a yardstick to decide whether to give you a loan or not. Thanks to a good credit score, your loan application is more likely to get approved. On the other hand, a low credit score can lead to your loan being rejected. This is why, knowing your credit score before applying for a home renovation loan helps.
Determine Repayment Tenure
Before taking a home renovation loan, you must strategize your repayment schedule. This helps to better manage your monthly expenses. Usually, the maximum repayment tenure of home refurbishment loans for salaried persons and self-employed persons is 30 years and 20 years respectively. Talk to your lender to know about customized repayment options as per your requirements.
Home Improvement Loans: Dos and Don’ts when applying for them
Along with your home renovation loan, your lender may try pushing their other products, including credit cards. You must be very cautious while availing such add ons as they are unnecessary financial burden that you don’t need. Put simply, resist the temptation of taking more credit than required.
Besides, try to keep the home improvement loan amount on the lower side even if the lender is willing to give a higher loan amount. Also, keep the instant cash loantenure as short as possible for paying affordable EMIs.
Moreover, calculate your EMI via the best loan app to know how the home renovation loan will impact your monthly budget. Also, opt for a home improvement loan only if you and your family are sure of bearing the EMI.
If you are servicing a home loan, then consider applying to the same bank for a home renovation loan. In doing so, you can negotiate with your lender fora low rate of interest. More so, you can save yourself from the rigorous paperwork that is the mandatory for loan approvals.
When you are sure that you want to renovate your home, start by determining your loan amount and researching your various options. If it is not a pressing need, then wait for the festive offers when lenders offer loans on reduced interest rates. They may also waive off the processing fees and offer you other benefits on your loan. Plan your monthly budget to avoid the loan repayment from becoming burdensome.