For renovation of the house

If the person want to renovate their house and still the person is paying an EMI, in that case, the person should take a home improvement loan instead of the personal loan. The person has existing home loan, then also person can pledge the value of the house/land/property for arranging funds for renovation purpose.

Eligibility Criteria

The property value increases as the customer repays the loan amount or complete the loan tenure. The loan amount will be 60% -70% of the remaining value of the property, and if the property is not pledge, then it will be treated in the same way as the fresh home loan.

The interest rate of home improvement loan is low; normally it ranges from 10% to 12% while the personal loan, interest is high, i.e. from 14% to 25%. The interest rate of home improvement loan depends on various factors, i.e. the loan tenure, loan amount, seasonal factors, and repaying capacity. One can take a loan for longer tenure; also, i.e. up to 15 years, whereas, in case of the personal loan, the loan tenure is up to 5 to 7 years. The person can also prepay the loan amount.

The home improvement loan is disbursed in a lump sum. Many banks offer a home improvement loan for a specific reason only. The loan is given on the terms that the work must be completed within 1 year. The maximum loan amount that the person can avail for renovation or improvements is Rs.50lacs. All profile people can avail the home improvement loan; i.e. salaried individual, self employed person and self employed professionals. This loan is for residents of India and the person should have a regular source of income. The person cannot claim tax rebate on this loan unlike in the home loan.

One can also avail top up on his existing home loan, and the customer does not have to specify anything to the bank, for what the person is availing this loan. If the existing bank does not provide the facility of top up on the existing home loan, then the customer can shift from one bank to another, i.e. balance transfer and avail top up loan on the existing home loan. The interest rate is little higher in this case, i.e. from 12% to 14% depending upon the requirement. However, the person has to give a certificate that person is not taking a loan for speculative purpose.