Home Improvement Loan is an outstanding idea to add more value to one’s residence by upgrading its overall outlook. However, with labor costs increasing at a pace of 25%, renovating one’s home has become a rather costly affair.
A home renovation loan can come to the rescue in such a situation. Such a financing option lets individuals upgrade their homes without depleting finances. Further, with a personal loan for home renovation, one can manage urgent home repairs conveniently.
Individuals planning to obtain a home improvement loan can consider the following factors to make an informed borrowing decision:
1. Set the renovation goal
Before proceeding with the loan application, individuals need to consider the cost of borrowing, as it will help them quickly pay off the loan. Thus, one must first determine the essential requirements and borrow only the required amount.
Since there are no end-use restrictions with personal loans for home renovation, borrowers can use the quantum for a host of purposes, including:
- Painting the house
- Upgrade to smart home appliances
- Add or remove structures and more
With a personal loan for home renovation, individuals can get a new look for their homes, increasing their asset value.
2. Look for a lender with simple eligibility terms
In recent times, personal loan applications have witnessed a surge, owing to their collateral-free nature and ease of availability. However, before making a borrowing decision, one must understand how the CIBIL score is important for personal lending. It is one of the basic eligibility parameters that lenders consider while determining a prospective borrower’s creditworthiness.
That said, while availing of a home improvement loan, borrowers would notice that different lenders extend different eligibility parameters. To avoid loan application rejection, one needs to meet/exceed the home loan eligibility.
One can easily obtain this credit option if they:
- Fall within the age group of 21 and 67 years
- Are an Indian resident residing in the country
- Earn a steady monthly income
- Maintain a healthy credit score
- Match the city-based minimum salary requirements
Apart from these, some lenders might add a few more criteria, which the borrower must stay informed.
3. Compare lenders and look out for pre-approved offers
Before individuals apply for a personal loan for home renovation, they must conduct proper market research and compare the offers of different lenders. One must consider looking at the lowest interest rate personal loan and various features that can make borrowing more affordable.
Some financial institutions offer doorstep document collection and easy online application procedures. Besides, many leading NBFCs in the country, such as Bajaj Finserv, extend pre-approved offers to existing customers. Such offers are available on various financial products, such as personal loans and business loans. They significantly help in simplifying and streamlining the loan application procedure. Further, individuals can conveniently check their pre-approved offers by entering just their names and contact details.
Meanwhile, a few lenders also extend seasonal offers, further facilitating the loan application process by easing out the documentation.
4. Check the additional fees and charges
Keeping the personal loan for home improvement fees and charges in mind before proceeding with the application is crucial. Considering this factor can help one in making an informed borrowing decision, while staying updated with the loan’s terms and conditions.
That said, most financial institutions levy the following additional costs on personal loans:
- Statement charges
- Processing fee
- EMI bounce charges
- Foreclosure charges
- Part-prepayment charges
- Penal interest and more
Ensure that the preferred lender offers 100% transparent terms and conditions, free of all hidden charges. This way, individuals can make the right decision towards availing of a home renovation loan.
5. Plan repayment
To avoid last-minute hiccups, individuals must plan the loan repayment before applying for a personal loan. This way, one can ensure that the monthly instalments would not strain their budget. A convenient way to make this decision is by using a personal loan EMI calculator. This online tool computes the EMI obligations in relation to a chosen loan amount, interest rate, and repayment tenor.
Using this online tool before individuals apply for a personal loan would assist them in choosing the right loan tenor concerning EMIs. For instance, when one chooses a shorter repayment tenor, the EMI is on the higher side. Meanwhile, a longer repayment tenor attracts lower EMIs. However, with an extended tenor, the interest burden on the borrower increases significantly. Thus, one must note all these considerations before making a borrowing decision.
Considering the above-mentioned factors would assist prospective borrowers in obtaining a home renovation loan that is right for them. Following this, the loan repayment would become convenient without straining one’s finances. Individuals must also remember to keep a low FOIR to avail of affordable terms regarding personal loans.
Read Also: Easy Ways to Avail of a House Renovation Loan with Bajaj Finserv
