Affordable Home Renovation Loans 2026

• Bank of Baroda Home Improvement Loan - Best for Low Interest Rates
  • Interest rate: Starts at 7.20% p.a.
  • Loan tenure: Up to 30 years
  • Processing fees: Up to 0.50% of the loan amount [Min. Rs.7,500 (payable upfront); Max. Rs.20,000]
  • Maximum loan amount: Rs.10 crore
  • Can be availed for renovation/improvement/repair of an existing property
  • 36-month moratorium period available
• TATA Capital Home Renovation Loan - Best for Security/Collateral
  • Interest rate: Starts at 10.99% p.a.
  • Loan tenure: Up to six years
  • Processing fees: Up to 2.00% of the loan amount
  • Loan borrowers need not provide any security or collateral to apply for the loan
  • Better loan eligibility
  • Prepayment Penalty: No prepayment penalty on partial repayment of the loan after 6 months from the date of availing the loan. However, if more than 25% of the outstanding loan amount is being prepaid, a fee of 2.00% of the amount being prepaid + GST shall be applicable.
• Canara Bank Home Improvement Loan - Best for Low Processing Fees
  • Interest rate: Starts at 10.50% p.a.
  • Loan tenure: Up to 5 years
  • Processing fees: Up to 0.50% of the loan amount (Min. Rs.1,500; Max. Rs.10,000)
  • Can also be availed for furnishing the property such as purchase of furniture, home appliances, etc.
  • Simple documentation and quick processing
  • Prepayment Penalty: Zero prepayment charges on housing loans with floating rate of interest.
  • Plus Applicable Taxes
• PNB HFL Home Improvement Loan - Best for Higher Eligibility
  • Interest rate: Starts at 9.45% p.a.
  • Loan tenure: Up to 30 years
  • Processing fees: Up to 0.50% of the loan amount (Min. Rs.10,000)
  • Plus Applicable Taxes
  • Can be availed for complete renovation of your exiting property
• HDFC Bank Home Improvement Loan - Best for Flexible Repayment Options
  • Interest rate: Starts at 7.75% p.a.
  • Loan tenure: Up to 15 years
  • Processing fees For Salaried: Up to 0.50% of the loan amount or Rs.3,000 (whichever is higher)
  • Processing fees for Self-employed: Up to Rs.1.50% of the loan amount or Rs.4,500 (whichever is higher)
  • Home renovation loans at the same interest rate as of home loans
  • Plus Applicable Taxes
  • *Prepayment Penalty:
    • No prepayment charges on both full and part prepayments for loans sanctioned to individual borrowers
    • For others, a fee of 2% of the amount being prepaid plus applicable taxes will be levied if the loan is being prepaid within six months from the first disbursement. If more than 25% of the outstanding principal is being repaid in a financial year, between the 6th and 36th month of the tenure, 2% of the amount being repaid will be charged as prepayment fee. The prepayments will have to be made from the borrowers' own financial sources that the bank deems fit.
• IIFL NRI Home Improvement Loan - Best for NRIs
  • Interest rate: Starts at 8.90% p.a.
  • Loan tenure: Up to 20 years
  • Processing fees: Up to 0.75% of the loan amount or Rs.3,000 (whichever is higher)
  • Plus Applicable Taxes
  • *Prepayment Charges: No charges for individuals. However, a fee up to 5% of the loan amount being prepaid shall be applicable depending on the duration after which the last disbursement was made.
  • Foreclosure Charges: Applicable on the entire loan amount while prepaying the loan completely.
  • Quick documentation and processing
  • Feature-filled improvement loan makes repayment easier

Eligibility Criteria for Home Renovation Loan

Documents required for Home Improvement Loans

Loan-to-Value Ratio in Home Renovation Loans 

The Loan-to-Value (LTV) ratio for a home renovation loan is a measurement of the loan amount in relation to the appraised value of the property. It aids lenders in evaluating the loan's risk.

The loan amount is subtracted from the property's appraised value to arrive at the LTV ratio, which is presented as a percentage. The LTV ratio is frequently an important consideration for home equity loans, which are frequently used for renovation. The percentage of a borrower's home equity may be constrained by the lender. 

Banks and Non-Banking Financial Companies (NBFCs) undertake a credit risk assessment in order to ascertain the final LTV ratio for the borrower. Some of the factors which are taken into consideration during the credit risk assessment procedure are applicant's repayment capacity, credit profile, property's valuation, etc. 

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