A home improvement loan is meant to fund renovations of a house. This loan can be useful if your house requires repairs, a revamp, additions like a room or a floor, new flooring, painting, etc. There are many reasons for choosing to get this loan. Have a look at some the reasons why you should be looking forward to avail this loan:
A way to pay for renovations
Your house may need renovations, but you may be unable to handle the expense. Paying for the home improvement expenses may be difficult if you are short on liquidity or prefer to keep your funds as they are. Getting a loan for these expenses can allow you to spend as much money as required without worrying about your current liquidity.
Low rate of interest
Loans for home improvement are secured and, thus, available at a low-interest rate. While some people may go for a personal loan to finance their house renovations, a loan specifically for home improvement is a better option in terms of the interest rate. Interest rates of personal loans are much higher and can make the loan costlier. You can check a housing loan interest calculator to gauge the amount you will pay in interest and overall for this loan.
Lower EMIs with a longer tenure
If you choose a longer tenure, it can reduce your EMIs. It can make paying off the loan relatively easy. You can check how much the EMI might be and decide the tenure accordingly.
Flexible use of the loan amount
You can use the loan amount in various ways for your home improvement. Improvement can include new furniture, reconstruction, woodwork, plumbing, new fittings in the bathroom, construction of new rooms, balconies, a garage, etc. Once you have the permit for the additions (wherever required), you can use the loan amount for any of these and more. Your lender will tell you the ambit of activities the loan can cover.
Improves your house’s value
Revamping your house, beautifying it, giving it a modern look, or simply doing maintenance work can increase your house’s value. Your house will be in better shape than it was before. It will be stronger, require less maintenance work in the future, and will look more attractive. These factors help add to the market value of the house. It enables you to get a higher rent if you rent the house and a higher sale price if you plan to sell it. A home improvement loan can, therefore, be quite beneficial.
Benefits in taxes
Just as interest on a home loan allows for a tax deduction, interest on an improvement loan also has this perk. Interest on home loans is tax deductible up to INR 2,00,000. Interest on a home improvement loan is deductible up to INR 30,000, which is included in the INR 2,00,000 limit. If you already have a home loan, you can get more tax benefits with the new loan’s interest. To know your exact interest amount, you can use a housing loan interest calculator and check to what amount you can claim this tax benefit.
Minimal paperwork and faster loan processing
This loan requires minimal paperwork, which can lead to a faster process time. In addition, if it is a lender from whom you have taken a home loan, the process maybe even faster.
It can improve your credit score
A home improvement loan may be lower in amount than a home loan. It is, therefore, relatively easier to pay off. If you are searching for methods to improve your credit score, this loan can be an effective way to do so. Paying the EMIs on time and paying off the loan as scheduled by the lender can improve your creditworthiness. A higher creditworthiness can make it easier for you to obtain a loan in the future.
A home improvement loan can provide the necessary cash for repairs you have put off for years. You don’t need to wait anymore. You can opt for this loan and get your house to look the way you want.
Conclusion
So, here were some of the reasons why applying for a home renovation loan is good. It helps you avoid your fund crunch and makes it easier to provide your home with a whole new look in just a matter of time.
Also Read: 4 Tips to Make Your Home Summer-Friendly
