Your home is not just a financial investment. It is a physical and emotional investment as well. Even though a home loan or a home construction loan can take care of funding your purchase or construction, your home is incomplete without the aesthetics. This means bearing the additional cost of decor, furnishing, in a nutshell, the cost of giving your home your own personal touch.

So how can you pay for decorating your home without adding an unbearable cost burden on your shoulders? A simple home improvement loan should do the trick! Home improvement loans are flexible, hassle-free, and are a low-cost means of fulfilling and customizing your idea of a perfect home.

Key aspects:

Flexibility of usage:

The funds acquired from a home improvement loan can be used for various activities like renovation, repairs, extension, painting, etc. However, do note that this funding is only possible for immovable assets, and not for purchase/repair of movable items like furniture.

Another point to keep in mind is, the renovation must take place within the built-up area, i.e. the inner-outer walls & additional areas mandated by the development authority.

Documentation:

Besides income statements and KYC, you also need to provide a cheque for the processing fee, a bank statement for the last six months, an original title deed, NOC or No Objection Certificate from a development authority like DDA or MHADA and lastly, an estimate of construction cost certified by a civil engineer or architect

Tenure of a home improvement loan

A home improvement loan is generally available for a tenure that can last up to 15 years.

Advantages of opting for home improvement loan

Interest

The rate of interest on a home improvement loan is much lower than the interest on a personal loan. It is worth noting, that a personal loan for home improvement, would fetch a higher rate of interest as it is considered as an unsecured loan. A home improvement loan, on the other hand, is secured against your home ownership and is usually available at the same or lower rates as a home loan.

Tax benefit on renovation home loans

A loan taken for renovating an existing house after the completion certificate is issued, or after the house has been let out/occupied is not eligible for tax deductions under Section 80C. However, the interest component is eligible for deduction under Section 24(B) under the head, 'income from house property'. You are eligible for tax deductions up to Rs. 30,000 per annum on the interest paid on a home loan improvement.

Minimal documentation

The documentation ask for a home improvement loan is a lot simpler compared to other ways of financing. If you're applying to a bank or financing institute where you already have an existing loan/KYC, your loan process is a lot faster.

Quick processing

Since documentation is relatively minimal, the processing time is shorter. Lenders usually grant existing customers up to 100% of their improvement estimate subject to a specified ceiling on the market price of your home.

A hassle-free home improvement loan can address the funding constraint that might hold you back from fulfilling your dream of a comfortable, personal living space. Click (link) to know more about home improvement loans.

Learn more about your Home Loan Eligibility here.

DISCLAIMER

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.



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