Ways in which a personal loan can help in home renovation?
After a few years, you would definitely require some renovations or extensions in your house. Most of these renovations take place before any significant function like marriages, in order to put a good impression.
The condition and look of your house create the much crucial first impression in the mind of your guests. Your home is always a reflection of your personality. But such an undertaking is a very costly affair. This is the reason why people go for a personal loan or home renovation loan.
The prime benefit of a home renovation loan is that it allows you to upgrade your existing home as per your wished design. It creates a more comfortable living space, customized as per your wishes and preferences.
These renovation loan are similar to house loans. A home loan enables you to acquire a house, while a home renovation loan is meant for improving and renovating the home that you already own.
Personal loan is much flexible than renovation loan. A personal loan can be used for multiple purposes, but it charges a high rate of interest, and it is a short term loan. Thus putting the home renovation loan on an advantageous position.
Below is a list of benefits for opting home renovation loan for renovation purposes:
There many ways to fund a home renovation but home renovation loan as certain advantages, which makes them must better option to opt.
Lower interest rates
While you can use a personal loan for the purpose of your home renovation, the interest in such type of loan is very high because it is an unsecured loan. A home renovation loan is usually available at the lower rates. Thus making it an attractive option as it is secured against your homeownership.
A renovation loan gives you a tax benefit on the interest component, that is, you can get the deduction of up to Rs. 30,000 per annum (under section 24) on the interest that you pay on these loans.
The deduction of Rs. 30,000 is within the limit of Rs. 2 Lakh is available on loan interest payment of self-occupied homes. Which means that interest payments on the home purchase and home renovation loan put together will qualify for the deduction of Rs. 2 lakh. The Rs. 30,000 deduction will help in a tax saving of Rs. 10,300 thus reducing the overall cost of borrowing.
Renovation loan requires relatively simple documentation when compared to other modes of financing. It only requires essential documentation like identity/income proof, photographs, a property title deed, etc. If you apply for the home renovation loan from the housing finance company from where you have taken a home loan, the documentation becomes even easier.
Home renovation loan are processed very quickly as the documentation is minimal and hassle-free. So you are going to do some renovation work on an urgent basis, do not wait for your home loan application to be approved. Apply for a renovation loan.