Top 5 Benefits Of Home Improvements Loans

A home is not just about having a roof over your head. It is more to do with having an identity, status, and peace. It is the place where you find comfort and peace after a long tiring day. Renovating your home can be a great decision to add an aesthetic and soothing ambiance. The cost of renovation does not come cheap. It can put a burden on your savings which you have kept to tackle emergencies.

However, it does not mean that you should give up the idea of improving your house. You can opt for a home improvement loan to cover the cost of modification or remodeling without redeeming your savings or investments. Home improvement loans allow you to upgrade your house to your dream house – a more comfortable and peaceful space for yourself and your family members.

Benefits Of Home Improvement Loans

Home improvement loans come with a host of features and benefits that you can avail of. For instance, you can get the loan amount to cover the cost of various types of repairs and renovations, such as paintings, tiling and flooring, waterproofing, plumbing, and sanitary work, etc.

Here are the benefits of opting for a home improvement loan: 

• Instant processing

The minimum documentation of home improvement loans significantly reduces the loan application processing time. You do not have to wait for too long to get your loan application approved. Also, it eliminates the need to visit any physical location to apply for a loan. You will need to visit your lender’s website, fill in the application form, upload the documents required, and submit your application. Most lenders offer to approve the loans within hours of submission.

To apply for a home improvement loan, you need to fill in your personal, employment, and financial information. After that, you need to enter the required loan amount and loan tenure. After submitting your application, allow the lender to run verification checks. If everything is in order, the approved loan amount is disbursed to your registered bank account.

• Affordable interest rates

Compared to home loans, a home improvement loan has a lower interest rate. A lower interest rate significantly reduces your monthly EMIs, allowing you to repay the loan amount without putting any burden on your budget.

The home renovation loan interest rates depend on factors like your income, credit score, current financial obligations, loan-to-value ratio, relationship with your lender, location of the property, and loan tenure.

Another factor that influences your interest rate is the type of interest rate that you choose.

• Tax deductions

As the Reserve Bank of India (RBI), you are eligible to avail of tax benefits under the Income Tax Act 1961. As a home improvement loan borrower, you can get deductions of up to Rs. 30,000/- per annum for the interest that you pay. However, it is worth noting that the eligible tax deduction falls within the limit of Rs. 200,000/- interest payments on self-occupied homes.

To put it simply, you can avail of tax dedications of up to Rs. 200,000 on interest paid on home loans and home renovation loans. Out of Rs. 200,000/-  you are eligible to get up to RS. 30,000/- tax benefits on your home improvement loan, enabling you to lower the overall cost of borrowing.

• Flexibility in usage

The best part of a home improvement loan is that there is no restriction from the lender on how you can use the loan amount to modify or remodel your house. You can use the loan amount to cover the cost of several types of repairs and renovations, such as painting, tiling, and flooring, extension, interior designing, repair ceilings, and windows, etc. A home renovation loan can cover the cost of all expenses pertaining to the structure of the house.

Keep in mind that you can not use the sanctioned loan amount to purchase moveable items, such as furniture, fixtures, etc.

• Minimum documentation required

Another benefit of applying for a home loan is that you do not have to submit lengthy documents. The documents required to get a loan are a bare minimum. Although the documents required to apply for a home renovation loan vary across lenders, here are the ones that are common across all platforms:

• Identification Proof: Driving Licence, Voter ID Card, Ration Card, Employee ID (Any one of them).
• Address proof: Passport, Voters ID Card, Driving License, Ration Card, Utility Bill, (Any one of them).
• For salaried person: Salary slips (last three months), ITR, or form 16.
• For self-employed individuals: Bank statement stating past three months’ transactions.

 

• Property title deed

So, if you are thinking of getting a home improvement, don’t worry about the financing. Get a home improvement loan and revamp your house without worry.