5 Reasons to Apply for Home Improvement Loan
A home is often the epitome of happiness. Right from enjoying some quality time with your soul mate to making memories with your little ones, it all happens in your home. However, there comes a time, when your beloved home might need some improvement to accommodate the changes in your lifestyle. This may cost you some money, but more often than not, this renovation will help you and your loved ones to lead more comfortable lives, and would, therefore, prove to be worth every rupee you spend.
If you have enough extra cash on your hands, you can use the same to kick-start this project. If, however, you don’t have the necessary fund to accomplish this, you can and should contemplate taking a home improvement loan.
A home improvement loan is necessarily a Type of Personal Loan offer, which you can use for a wide variety of purposes including:
- Whitewashing and painting
- Adding a new room, toilet or balcony
- Purchasing new appliances
- Replacing light fixtures
- Changing flooring
- Maintenance and upkeep
Now that you know what you can accomplish with a housing improvement loan let us dive into some reasons, why you should apply for it!
1. Simple Eligibility Criteria
An application for a Personal Loan is rather simple, and you can qualify for the credit with minimal documentation. Most banks will require you to:
Furnish proof of identity
Submit proof of residential address
Be between the age of 21 to 60 years
Have a steady source of income, with the minimum requirement being Rs. 25,000 per month.
Submit proof of income – Salary Slip (for salaried individuals), Income Tax Returns, Trade License and Ownership of the Business (forthe business owner or independent professional).
2. No Need for Collateral
Unlike the case with most other loans, a home improvement loan will not require you to give any of your assets as collateral. This is an unsecured loan, which will take away the unwanted burden of risking your property in case of any defaults in the repayment of the loan. Of course, deferred or missed equated monthly instalments (EMIs) will have consequences even in this case, but at least you won’t be at risk of losing your property!
3. Desired Loan Amount
Again, since this is an unsecured loan, the amount of investment you qualify for will not depend on the value of the property. Instead, the bank will determine the amount on the basis of your monthly income as well as your credit score. If you enjoy a decent salary and a reasonably good credit rating, you can opt for any loan amount ranging from 50,000 to 50 Lakhs.
That being said, it is not mandatory for you to borrow a more significant amount. After all, you will need to pay the interest on the loan.
4. Flexible Repayment Options
When you opt for a home improvement loan, you can conveniently choose to repay it in any number of EMIs, ranging from 12 to 60, depending upon the amount you are ready to commit for.
If you wish to repay the loan quickly, you can opt for higher EMIs. This will ensure that you pay a significantly less amount of money towards interest. Contrastingly, if you want to enjoy increased financial freedom, you can opt for smaller EMIs. This will lengthen the tenure of your loan but will help you manage your monthly expenses more efficiently.
5. Tax Benefits
If you use the home improvement loan towards maintenance, repairs, and expansion of your home, you can enjoy tax benefits under section 24. Under this section, you will be eligible for a tax deduction on the interest paid towards the loan. You must note that the deduction is capped at a maximum of 2 Lakhs per annum for self-occupied properties. There is no cap for the tax deduction for let-out properties.
You cannot, however, claim any benefits on purchase of furniture or electrical appliances. Besides, in order to enjoy the benefits, you will need to furnish a proof that you are using the disbursed loan amount towards the renovation/improvement of your home.
Now that you are aware of some of the most compelling benefits of a home improvement loan wait no more before you apply for Personal Loan in India and revel in a remodelled home that is fully customised as per your needs!
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