The easy accessibility of personal loans and flexibility of fund usage are probably the two primary reasons that make this credit facility a popular credit option among prospective borrowers.
The housing sector saw significant growth accelerated by government support, positive consumer sentiment, and affordable financing in the aftermath of the pandemic.
With house renovation loans, people can improve their quality of life, their net worth, and their home’s resale value. These are prevalent forms of personal loans and can be taken for repairs, renovations, remodeling, etc.
Advantages of personal home renovation loans
According to a recent report, personal loans witnessed a soaring 134% y-o-y growth. (1) The primary reason behind this growth is their unsecured nature and flexibility of fund usage.
Therefore, borrowers can avail of a home renovation loan to fulfill any financial requirement. Whether individuals want to expand their existing property or renovate certain portions of the house, such a credit facility will allow them to perform the same.
Eligible borrowers can obtain a sizeable amount to manage home improvement projects and give a unique outlook to their house. Considering the long-term perspective, individuals need to maintain their property to avoid structural or aesthetic issues. Fortunately, home improvement credit is an excellent option for this due to the below-mentioned reasons-
Sizeable loan amount
Eligible borrowers can obtain a personal loan of up to Rs. 25 lakh from reputed financial institutions, such as Bajaj Finserv. Individuals can also use this fund to purchase home renovation materials, appliances, paint certain house portions, etc. Thus, with a home renovation loan, one can repair and renovate their current dwelling.
The flexibility of fund usage
As mentioned before, these unsecured credit facilities do not come with any end-use restriction. For example, if individual plans to apply for a personal loan of Rs. 10 lakh to renovate or improve their house, the renovation cost is around Rs. 8 lakh. In that case, an individual can keep the excess Rs. 2 lakh and utilize it to fund any other expenses. Financial lenders do not interfere in the use of the amount.
No collateral required
Individuals are not required to hypothecate any valuable asset to avail such loans. Thus, obtaining a home improvement or renovation loan is quite flexible and involves minimal documentation. One does not have to worry about risking their asset and waiting for tedious verifications. As a result, borrowers can ensure loan approval within 24 hours, allowing them to receive funds quickly.
Flexible repayment tenor
One of the simple ways to manage debt is choosing a comfortable loan tenor. In terms of personal loans, individuals can avail themselves of a span of up to 5 years. This means that individuals with limited income can avail the benefit of choosing an extended tenor and service lower EMIs. However, customers must remember that opting for longer tenors will attract a higher personal loan interest rate.
In this regard, borrowers can take the help of an online interest rate calculator to calculate their personal loan EMIs, interest component, and overall payable amount beforehand. It will enable borrowers to plan their repayment effectively.
Apart from these benefits, borrowers can also enjoy the Flexi Loan facility in terms of repayment and usage of funds. Here, borrowers can withdraw funds as per their requirements and repay interest only on the amount that has been utilized from the total sanction.
Furthermore, one can also choose to pay interest-only EMIs and repay the principal component at the end of the tenor.
Nonetheless, before knowing how to apply for a personal loan, one must ensure meeting the eligibility parameters to guarantee trouble-free loan approval. Check out the following eligibility parameters for a personal loan-
- Applicant’s age should be within 21-67 years
- One must be a resident of India
- CIBIL score should be 750 or above
- Salary should be Rs. 22,000 or higher, depending on the job location
Moreover, borrowers must ensure keeping the credit utilization ratio below 40% to enhance the chances of loan approval. Individuals meeting these requirements diligently can give their home a makeover with an affordable home improvement loan.
Among these multitudes of benefits, borrowers must know that they can also avail tax exemption on the interest component of the loan for constructing or repairing a house.
Besides, borrowers can benefit from pre-approved offers extended by reputed financial institutions on various financing options, such as personal loans, business loans, credit cards, etc. Therefore, existing customers can check their pre-approved offers online by mentioning their essential credentials.
Individuals willing to invest a considerable portion of money can use personal loans to finance such high-end expenses. If borrowers try to spend their savings on renovation projects, they can be financially exhausted. However, a home renovation loan can end this financial stress and act as a better alternative.