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  • Home Improvement Loan (Home Renovation Loan) is Rated as "Great!" by 91150 Users

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    Home Improvement Loan (Home Renovation Loan)

    Home Improvement 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.

    Perfect Personal Loan Deals for you

    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.
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    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 4.5/5 "Excellent!"
      BANK BAZAAR is a one stop solution for all the financial products . The customer service and responses was up to the mark. I use their website which has many option and its user friendly . The web portals accuracy and speed is good . I have tried using the tools like credit score and EMI calculator .
      Was this review helpful? 0
      , coimbatore
      Reviewed on Apr 24, 2018
    • ICICI Bank Personal Loan
      "Need to improve"
      0.5 2.5/5 "Just OK"
      I have my personal loan was taken with ICICI bank. The loan mount was 85,000 and the interest rate was 10,5% which is average . The customer service and responses was really good but the process was not convenient since I had to submit all the documents physically. They have a month of time for the whole process.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Apr 24, 2018
    • Bank Bazaar Personal Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      My experience was really good with BANK BAZAAR.Their customer service and responses was up to the mark. The mobile application was really amazing and suer friendly . Here I have not faced any issues so I would like to recommend to my friends.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 24, 2018
    • HDFC Bank Personal Loan
      "Good"
      0.5 3.5/5 "Pretty good"
      I have my personal loan with HDFC bank. The loan amount was 2.30 lakhs and the interest rate was 16.95% which is bit high than other bank . The tenure period was 45 months ,. The customer service and responses was up to the mark. Here the processing fee was 11,000.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 24, 2018
    • Bank Bazaar Personal Loan
      "Good experience"
      0.5 5.0/5 "Blown Away!"
      BANK BAZAAR is a good platform for all the financial products .The customer service and responses was up to the mark. The loan amount was 80,000 and the interest rate was 12.5% which is average . The customer service and responses was good. They have taken much time and the process got delayed .The processing fee was nominal.My overall experience was good.
      Was this review helpful? 0
      , bhubaneshwar
      Reviewed on Apr 24, 2018
    • Tata capital Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have my personal loan with TATA CAPITAL . The loan amount was 2 lakhs and the interest rate was 12% which is average . The customer service and responses was up to the mark. I had a hassle free process and documentation here. They have provided door step service for collecting documents.My experience was really good.
      Was this review helpful? 0
      , bhubaneshwar
      Reviewed on Apr 24, 2018
    • Aditya Birla Finance Personal Loan
      "Better service"
      0.5 4.0/5 "Great!"
      My personal loan was taken with ADITYA BIRLA . The loan amount was 2 lakhs and the interest rate was 12% which is average . The customer service and responses was up to the mark. They sanctioned the loan with the committee time and the tenure period was 2 years .My overall experience was really good.
      Was this review helpful? 0
      , chennai
      Reviewed on Apr 24, 2018
    • Bank Bazaar Personal Loan
      "Good service"
      0.5 4.5/5 "Excellent!"
      Bank bazaar Is a good platform for all the financial products . The customer service and responses was up to the mark. The website has many good options on banks and interest rate . I am happy with their website so I would like to recommend top others.
      Was this review helpful? 0
      , chennai
      Reviewed on Apr 24, 2018
    • Citibank Personal Loan
      "Very good"
      0.5 3.5/5 "Pretty good"
      My personal loan was taken with CITI bank . The loan amount was 1.5 lakhs and the interest rate was 15.49% which is bit high than other banks . The tnrue period was 3 year . The customer service and responses was up to the mark.,Here he processing fee was nominal comparing with other banks .My experience was satisfactory .
      Was this review helpful? 0
      , chennai
      Reviewed on Apr 24, 2018
    • ICICI Bank Personal Loan
      "Good bank"
      0.5 3.0/5 "Satisfactory"
      I have applied for a personal loan with ICICI bank and the approved loan amount was 2 lakhs. The rate of interest for the loan amount was 14 to 16%. I have negotiated with the bank to reduce the rate of interest, but of no use. The total tenure was for 3 years. The process fee was around 2% of the principle amount.
      Was this review helpful? 0
      , chennai
      Reviewed on Apr 24, 2018
    • HDFC Bank Personal Loan
      "Very good service"
      0.5 5.0/5 "Blown Away!"
      Hdfc bank has offered me the personal loan around 4 months ago,. The customer support service and the response is good with the HDFC bank . I have got the loan amount within a week time. The required loan amount has been given and I am satisfied with it.
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 23, 2018
    • RBL Bank Personal Loan
      "Average service"
      0.5 5.0/5 "Blown Away!"
      Got the personal loan from the RBL around 4 months ago. The customer support service and the response is good with the RBL and they have delivered the loan amount with in a month time. They have offered me the loan amount of Rs,1,65,000 but I have applied for the loan amount of Rs,6,00,000 .
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 23, 2018
    • Capital First Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      The personal loan service is good with the capital first and they have disbursed the loan amount within 15 days of time. The customer support service and the response was good with he capital first. They have approved the lowest loan amount and I haven't got the expected loan amount. The rate of interest and the charges are high with the capital first.
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 23, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      Got the personal loan from the HDFC BANK around 2 years ago. The customer support service is good with the HDFC bank and they have disbursed the loan amount within a week time after the verification process. The required loan amount has been given and I am satisfied with it.
      Was this review helpful? 0
      , bangalore
      Reviewed on Apr 23, 2018
    • Aditya Birla Finance Personal Loan
      "Worst/BAD"
      0.5 1.0/5 "Really Bad"
      They can deduct EMI after your all payment. they did it with me and when I tried to ask they were not able to tell. and now they are not reverting to my email. they are showing me outstanding and there are no dues, think 100000000000 times before taking a loan.
      Was this review helpful? 0
      , new delhi
      Reviewed on Apr 23, 2018
    • Bank of India Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      The BANK OF INDIA has offered me the loan on time, they have delivered the required loan amount and I am satisfied with it. The customer support service and the response is good with the BANK OF INDIA and I am satisfied with the interest rate which they have offered was very low when compared with other banks.
      Was this review helpful? 0
      , chennai
      Reviewed on Apr 23, 2018
    • Citibank Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      Citibank personal loan service has high interest rate. The customer support service is good with the Citibank. The rate of interest and the charges are high with the Citibank personal loan process , it would be good if they can reduce the interest rate.
      Was this review helpful? 0
      , chennai
      Reviewed on Apr 23, 2018
    • Standard Chartered Bank Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      The STANDARD CHARTERED BANK has offered me the personal loan and I have got it within a week time. The rate of interest and the charges are average with the STANDARD CHARTERED BANK personal loan process, I would say I am satisfied with the service I got.
      Was this review helpful? 0
      , chennai
      Reviewed on Apr 23, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      In a week time , I have got the personal loan from the HDFC bank, The customer support service is good with the HDFC bank. The required loan amount has been given and I am satisfied with it. The rate of interest and the charges are average with the HDFC bank.
      Was this review helpful? 0
      , chennai
      Reviewed on Apr 23, 2018
    • review Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have got the personal loan from the KANGRA COOP BANK around 5 years ago. The customer support service is good with the Kangra bank and they give good response to the customers. I have got the required loan amount and i am satisfied with it. The rate of interest and the charges are average with the KANGRA COOP BANK.
      Was this review helpful? 0
      , new delhi
      Reviewed on Apr 23, 2018
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