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  • Home Improvement Loan (Home Renovation Loan) is Rated as "Great!" by 97304 Users

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    Home Improvement Loan (Home Renovation Loan)

    Home improvement loans are designed for the purpose of renovating a house and can be taken by a person who owns the property to be renovated. These loans are given for a maximum term of 15 years and interest charged on these loans lies in the range of 9.5% to 10.5% per year. Processing fee for home improvement loans ranges between 0.5% to 1% of the total loan amount.

    Home renovation loans, as the name suggest, are loans that you can take if you wish to get work done on a property that has already been constructed. These loans help you renovate your house as and when required and works in a fashion similar to the home loan. It can be taken for up to 15 years, or more, and paid back in equated monthly instalments (EMIs). The maximum duration, however, can change depending on the banks policies. Apart from major work that needs to be done in a house, these loans can also be taken to help you furnish your house and pay for things like bathroom fittings, fans, furniture, etc.

    Home Improvement Loan Eligibility Criteria

    Each bank will have its own eligibility criteria for the loans they offer but the gist of these are:

    • You can apply for a home renovation loan as an individual or jointly with the other owners of the house being the co-applicants.
    • Salaried and self-employed individuals can also apply for these loans
    • The minimum age requirement for this loan is that you should be at least 21 years of age. The maximum age is limited to your retirement age. This means that the loan tenure cannot exceed your retirement age. For salaried individuals the age limit is 65 years for most banks.
    • Even companies can apply for this loan provided they have been in operation for a predefined minimum period.
    • Companies applying for this loan may also be required to be in a position where they have been making profits in the last few years.
    • All the owners of the property will have to be co-applicants for the loan.

    Documentation Required for Home Renovation Loan

    The documents that will be required for you to be able to avail the home improvement loan will depend on the finance house that you approach. Some of the common documents needed are:

    • The first document will be the application form for the loan with photographs.
    • Both salaried and self-employed people may be required to submit salary statements.
    • You may also need to provide bank statements covering the last 6 months.
    • You may be asked to provide Form 16s and IT returns or ITAO documents.
    • All the original deeds of the property will also be required by some banks. You may be required to submit just the copies but originals might be required for the purpose of verification.
    • You must also submit a quotation from your architect on the estimate on how much the renovation is going to cost.
    • An address proof will also be required. This can be a drivers license, passports, ration cards, etc.
    • In some cases an identity proof may also be asked for which can be drivers licenses, Aadhar cards, passports, phone bills etc.
    • Pan cards, drivers licenses, Aadhar cards and passports can also be submitted as proof of age, if required.
    • Some banks may require that you take out an insurance policy on the house to cover the loan amount and name them the sole beneficiaries for it. In such cases you will have to provide the policy documents too.

    These are the most common documents that most financiers/banks will ask for. It may be so that in some cases you will have to submit just a few of these documents while in others, more documents may be requested. Such request are made at the bank's discretion and change from one bank to the other.

    Home Improvement Loan Interest Rates

    When it comes to interest rates, most of the banks and finance houses offer you two choices. The first is a fixed rate of interest and the other is floating interest rate.

    • Fixed interest rate

      The fixed interest rate is when the rate of interest is fixed before the loan is approved. This interest rate will remain fixed for the duration of the loan. The general band for this interest is between 9% per annum and 12.5% per annum. The exact rate, of course, will depend on the bank you take the loan from. The interest rate may also change depending on your employment situation. Salaried individuals tend to get offered lower interest rates as compared to self-employed applicants.

    • Floating interest rates

      The floating interest rate is an interest rate that is linked to the prime lending of the bank. This prime lending rate is affected by the repo rate (the rate at which the banks borrow money from the central bank) and can fluctuate. The advantage of the floating interest rate is that it tends to be a bit lower than the fixed interest rates. It does not generally exceed the fixed interest rates and even if it does, it generally does so for a short period.

    If your loan comes with a fixed interest rate and you wish to switch to a floating interest rate, then you can do so by paying a fee. The option is generally provided at the discretion of the bank.

    Features and Benefits of Home Renovation Loans

    Home loans that are meant to help refurbish your house offer a lot of features and benefits that are meant to make the loan easy to take and manage. Some of these are:

    • Many banks offer choices between fixed and floating interest rates that are meant to give you the choice of an interest rate that suits you. This does not mean that you get to choose the amount of interest. It means that you have a choice in the way the interest is calculated.
    • In some cases banks may offer a combination of the two interest rates where in the first few years will be a fixed interest rate and the remaining tenure will have a floating interest rate.
    • For most of the banks, you can apply for the home renovation loan online thus negating the need for you to journey to the bank itself.
    • As far as the loan amounts are concerned, some banks will cover the entire cost of the renovations. There are some banks that wont cover the entire cost but even then they may cover up to 90% of the cost.
    • In certain cases the bank may issue the entire loan amount in one lump sum or in instalments as and when it is needed.
    • Some banks also offer free credit cards with these loans to sweeten the deal.
    • Many of the banks ask for minimum documentation which means less paper work for you.
    • There is no need for you to have a prior relationship with the bank in order to avail this loan however, being an existing customer can have advantages. Some banks offer up to 80% of the required amount to new customers but 100% of the required amount to existing customers.

    Home Renovation Loan FAQs

    Q. What is the loan amount that I can take?

    A. The amount that you can borrow will depend on the banks policy. Some banks will offer up to 90% while others may offer to cover 100% of the cost of renovation.

    Q. Are there any income requirements for these loans?

    A. Yes. Each bank has its own income requirement which are specific to salaried and self-employed applicants.

    Q. If I have taken a loan with a fixed rate of interest, can I switch to a floating interest rate?

    A. Yes. Some banks do allow you to switch between fixed and floating interest rates. However such switching may require you to pay a fee.

    Q. I am 60 years old. Can I take this loan for 15 years?

    A. No you cannot because most banks consider the retirement age to be between 65 years and 70 years and your loan tenure cannot exceed the retirement age.

    Q. Is there a processing fee for these loans?

    A. Yes. These loans do come with processing fees. The exact amount will depend on the bank providing the loan.

    Q. When do I pay the processing fee?

    A. In most cases, you will have to pay the processing fee while applying for the loan. The payment can be made with a cheque which is to be submitted when you submit all the other documents for the loan.

    Q. What happens if my house is destroyed or damaged by a natural calamity while the loan is still being paid back?

    A. There is no doubt that in such an instance you will be at a disadvantage since the repayment of the loan will have to continue and youll need to rebuild/repair your house. It is best to use an insurance policy to cover such eventualities.

    Q. How can I ensure that the loan is repaid even if something were to happen to me?

    A. There are many insurance products that will help you cover the outstanding loan amounts so that your loans dont become a financial burden on your family. It would be best to take one of these insurance policies to cover the loan.

    Q. Is prepayment allowed for home renovation loans?

    A. Yes. However the terms and conditions governing prepayments will differ from one bank to the next so it would be best to consult your bank before deciding on prepayments.

    Q. I dont own the house but want to be a co-applicant for the loan. Is that possible?

    A. Yes. Co-applicants for a loan need not be own the house for these loans however, all co-owners need to be co-applicants for this loan.

    Home Improvement Loan Reviews

    • Bank Bazaar Personal Loan
      "EXCELLENT"
      0.5 5.0/5 "Blown Away!"
      At the beginning i came to know about the Bank bazaar through the credit card score checking, i use the bank bazaar through both the website as well as the mobile application as it is user friendly to access. The customer support is responsive.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Dec 14, 2018
    • HDFC Bank Personal Loan
      "GOOD"
      0.5 4.0/5 "Great!"
      There is no particular reason for taking the personal loan with the HDFC BANK but the process of applying the personal loan is simple ans easy to get the loan. The loan amount is satisfactory what they have offered added on that the rate of interest is with lower.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Dec 14, 2018
    • Bank Bazaar Personal Loan
      "USER FRIENDLY PORTAL"
      0.5 5.0/5 "Blown Away!"
      It is my first time experience with the Bank bazaar as i am using it through the website as the portal is easy and also it is user friendly to access. The customer support is very good with this with this portal and it is satisfactory to me. It is a good portal to use.
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 14, 2018
    • IndusInd Bank Personal Loan
      "EXCELLENT"
      0.5 5.0/5 "Blown Away!"
      There is no particular reason for taking the personal loan with the INDUSIND BANK but the loan amount what they have offered is sufficient added on that they have offered the rate of interest is 12.5% with this personal loan. The process of getting the loan is simple and quick.
      Was this review helpful? 2
      , bangalore
      Reviewed on Dec 14, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      It has been a good experience with this loan and the loan got disbursed in a short period of time. There has not been any hassle faced with the banking services of them, even their customer support has been responsive has been helpful. There has not been any extra charges made by them.
      Was this review helpful? 2
      , kolkata
      Reviewed on Dec 14, 2018
    • SBI Personal Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      It had been a good experience with this loan experience with this loan and the whole process went smooth and simple. Within a short period of time they had given me this loan and there has not been any problem and there has not been any sort of additional charges which they had made.
      Was this review helpful? 3
      , kolkata
      Reviewed on Dec 14, 2018
    • HDFC Bank Personal Loan
      "Easy to get a loan"
      0.5 4.5/5 "Excellent!"
      They have processed the loan immediately. I have received the loan amount of Rs. 1.5 lakhs. I have received the loan on time. I'm happy about the interest rate since its a instant loan. There was no documentation has collected. Total tenure period of the loan is 2 years and I'm about to close it.
      Was this review helpful? 2
      , coimbatore
      Reviewed on Dec 14, 2018
    • review Personal Loan
      "Best Financial Service"
      0.5 5.0/5 "Blown Away!"
      Its instant paperless approval personal loan which i got from Home credit financial service . As the rate of interest is satisfactory based on the market price. Their customer service is way good an response was quick .I have chosen the tenure period of1 years and there are nil processing fees.
      Was this review helpful? 1
      , ghaziabad
      Reviewed on Dec 14, 2018
    • review Personal Loan
      "Best Financial Service"
      0.5 5.0/5 "Blown Away!"
      I have take personal loan from Bussan Auto finance which they approved in 1 day and the amount was reflected in next day and they followed instant approval process. As am satisfied with the rate of interest which they have given and i can make the payment monthly though ECS. There are nominal processing fees.
      Was this review helpful? 2
      , ghaziabad
      Reviewed on Dec 14, 2018
    • SBI Personal Loan
      "Best service"
      0.5 5.0/5 "Blown Away!"
      My personal loan was taken with STATE BANK OF INDIA , and they provide nominal rate of interest and it is nominal in the market . The processing fee is nominal and tenure period is 5year . SO far it has been good experience with this bank . Loan amount is satisfactory .
      Was this review helpful? 2
      , hyderabad
      Reviewed on Dec 14, 2018
    • Axis Bank Personal Loan
      "Very Good bank for personal loan"
      0.5 5.0/5 "Blown Away!"
      I bought my personal loan in the year of 2017. They have offered me a interest rate of 14.5% and the loan amount was Rs. 2.59 lakhs. There was some processing fee which is nominal according to the standard charges. Getting a loan from Axis bank is easy. There is a pre-closure and partial payment is available without any charges.
      Was this review helpful? 2
      , bangalore
      Reviewed on Dec 14, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken a car loan with HDFC bank and my experience was good, the loan amount was based on my requirement and the rate of interest was nominal when compared to other banks. Customer service was good with this bank and the tenure period is 5 years for this loan.
      Was this review helpful? 2
      , coimbatore
      Reviewed on Dec 14, 2018
    • Bank Bazaar Personal Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      It was a good experience so far with bankbazaar, they provide good services when compared to others in the market. Customer service was good with bankbazaar and they responded on time. The website of bankbazaar is easy to use and is user friendly.
      Was this review helpful? 1
      , coimbatore
      Reviewed on Dec 14, 2018
    • Early Salary Personal Loan
      "Looking for less interest rate"
      0.5 4.0/5 "Great!"
      My experience was good with Early salary for personal loan, the loan amount was for Rs 12000 with high interest rate when compared to others. Customer service was good and i received my loan amount on time. Tenure period for this loan is for 1 month.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Dec 14, 2018
    • Bank Bazaar Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I am using the services of bankbazaar from last 3-4 years, the services provided by bankbazaar is good when compared to others in the market. Customer service was good and they responded on time. Mobile app of bankbazaar is easy to navigate and user friendly to use.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 14, 2018
    • Incred Personal Loan
      "Not satisfied"
      0.5 2.0/5 "Expected more"
      I am not satisfied with the services provided by INCRED, the process was smooth and i received my loan amount within 7-10 days. I requested loan amount for Rs 2 lacs but they approved only for Rs 93000 and the rate of interest was high when compared to others. Customer service was not up to the mark with INCRED.
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 14, 2018
    • Bank Bazaar Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      It was a good experience so far with bankbazaar, they provide good services when compared to others in the market. Customer service was good with bankbazaar and they responded on time. The website of bankbazaar is easy to use and is user friendly.
      Was this review helpful? 1
      , ludhiana
      Reviewed on Dec 14, 2018
    • IndusInd Bank Personal Loan
      "Not satisfied"
      0.5 1.0/5 "Really Bad"
      It was not a good experience with Indusind bank for personal loan, the process took 10 days to complete. Customer support was not up to the mark with this bank and there was no proper response. Loan amount was or Rs 2 lacs with high interest rate and tenure period is 5 years.
      Was this review helpful? 2
      , ludhiana
      Reviewed on Dec 14, 2018
    • SBI Personal Loan
      "BETTER"
      0.5 5.0/5 "Blown Away!"
      The personal loan has been taken from the STATE BANK OF INDIA and i am satisfied with the services of this bank as i am using it from many years and the rate of interest what they have given is satisfactory with this bank. The duration to repay this loan is for 5 years.
      Was this review helpful? 1
      , new delhi
      Reviewed on Dec 14, 2018
    • Bank Bazaar Personal Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I know bankbazaar.com from last 2 years, my experience was good so far with bankbazaar. Customer services provided by bankbazaar is good and their response was prompt. The website of bankbazaar is easy to use and is user friendly.
      Was this review helpful? 1
      , new delhi
      Reviewed on Dec 14, 2018
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