Periodic home improvement is required to enhance the value of your house and to meet your family’s evolving needs. You may also renovate your house to make it eco-friendlier and energy-efficient. However, these upgrades can cost you a hefty amount and add pressure to your short-term finances. However, there are various ways to fund your home refurbishment including using a credit card, applying for a top-up on your existing home loan, or opting for a customised home renovation loan or home improvement loan, depending on the scale of your activities.
Take a look at some of the top ways to finance your home improvement costs based on your financial requirements.
You can cater to home improvement costs by funding them using your credit card. However, you must pay your credit card dues in full before the deadline in order to avert any penalties or a reduction in your CIBIL score. Also, keep in mind that as it is ideal to keep your credit utilisation ratio below 30% as exceeding this can harm your credit score. Therefore, credit cards are an excellent source of financing only for small projects.
Savings and investments
You can fund your home renovation activities with your personal savings and earnings from investments such as mutual funds, fixed deposits, and stocks. However, opting for this option may require you to wait for a substantial amount of time to gather an ample amount. In addition, dipping into these savings and earnings can make a dent in your retirement finances. So, choose this option only if you have sufficient savings that do not affect your financial planning for other goals.
If you already have a home loan that you are currently repaying, you can finance your renovation project by availing a top-up loan. Top-up loans are loans given over and above your existing home loan to fund your additional financial needs such as home improvement. Since the lender already has your documents, which were submitted when you were applying for the home loan, you will not have to furnish additional documentation for this loan. You can get a high-value top up loan if your property’s value is high and if you have repaid your home loan for a certain amount of time without any delays.
If your current lender does not offer top-up loans, then you can transfer your outstanding home loan balance to a lender who does and finance home renovation. Do note that you can claim tax deductions on the interest paid on top-up loans of up to Rs.50,000 and Rs.2 lakh under Section 80EE and Section 24 of the IT Act respectively.
Home renovation loan
A home improvement loan, also called a home renovation loan, can prove to be one of the best ways to fund the costly endeavour of home renovation. As a home improvement loan is a personal loan, you can get it without having to pledge an asset as security. This not only makes it faster for you to apply for it, but also allows the lender to disburse the sanction in no time as there is no need of valuation of the collateral. You can, therefore, rely on a home improvement loan to tackle urgent repairs of your home such as fixing the roof, plugging a plumbing problem or getting a state-of-the-art home security system installed.
Depending on the lender you borrow from, you can get a large amount at competitive personal loan interest rates along with attractive features. For example, Bajaj Finserv offers a home renovation loan of up to Rs.25 lakh on simple terms for a lengthy tenor extending up to 5 years. Here, you can get your online loan application approved within just 5 minutes and receive the loan amount you qualify for in just 24 hours after the verification of your documents. Bajaj Finserv also provides a free online EMI calculator to let you compute affordable EMIs for your loan by choosing the tenor and loan amount. This can also help you plan for repayment before you even apply for the loan.
What’s more, when you choose this home improvement loan, you can also benefit from the Flexi Personal Loan facility. This is an ideal way to borrow funds on the go for renovation activities as your needs may be unpredictable. With this facility, you can withdraw funds from your total sanction as and when the needs arise sans multiple fresh applications. Interest is charged only on the withdrawn amount, enabling you to free up cash flow and focus on home improvement.
To avail a home renovation loan without any delay, don’t forget to check your pre-approved offer from Bajaj Finserv. This will allow you to view a tailor-made deal for you to facilitate your home improvement activities.