There is no denying that home renovation is expensive, and when you are the sole breadwinner in the family, the dream of renovating your home can take a back seat. However, when you come across leakage or crack in the roof, then it becomes hard to ignore, considering the major implications it can have on the structure of your home. So, if you have been putting off a home renovation project thought for months but now couldn’t do so anymore due to the aforementioned reasons, then taking credit for the home renovation can help you without causing a setback in your finances. Funding home renovation via credit card is only beneficial when the expenses involve a few thousand rupees as repaying the amount by the due date is possible with fixed or limited income. However, home renovation expenses can sometimes run into lakhs and in this situation, opting for a personal loan is a better idea. For example, one could get home improvement loans such as from Kotak Personal Loan from Rs 50,000 up to Rs. 20 lakh.
Tax benefits
One could claim tax deduction under section 24(b) for interest paid on the loan if the personal loan was used for home renovation. To avail of the deduction, the individual has to prove the actual usage of the personal loan by establishing linkage between loan amount credited in your bank and corresponding use for making payments for renovation. For example, if you have availed Kotak Personal Loan for home improvement, it is recommended to keep the invoices for renovation done in case of an inquiry by tax officers.
Minimal Documentation
While taking a home improvement loan under home loan, some lenders require additional documents such as qualification where it is mandatory for the applicant to be graduate if working with the private limited company, have all original title deeds of the property, and much more. The loan is disbursed only when the applicant fulfils the eligibility criteria. This is not the scenario when you avail personal loan as it involves less paperwork than the former one. For example, Kotak Personal Loan comes with a hassle-free application process and minimal documentation where one has to submit income proof, but a requisite for title deed is not necessary, and loan amount is disbursed quite quicker if compared with the former option. Due to this, you can do home renovation if you are living in a rented house without having to state the reason to the bank.
Quick disbursal for time-sensitive repairs
It isn’t uncommon to run into home renovation emergencies such as retiling the roof before the monsoons or repairing the leakage. These are time-sensitive repairs and require immediate attention from the house owner as failure to do can damage a major part of the house. Under a personal loan, the amount gets disbursed from the financial institution quickly. The quick disbursal time is one of the many benefits of availing of a personal loan from the right lender. With Kotak Personal Loan and competitive Kotak Personal Loan Interest rates, the amount can be disbursed in under a day in most cases which proves to be a huge blessing when you have a home renovation emergency to cater to. The time taken for a home improvement loan under a home loan is considerably more as it is a secured loan and thus, involves more time to release funds.
No restriction on the end usage of funds
When you are applying for a home improvement loan under a home loan, most of the lenders might ask you to submit an estimate of the proposed work from an Architect to gauge the estimated expenses you will incur on home renovation. This is not a prerequisite when applying for a personal loan. One of the many benefits of a personal loan is there is no restriction on the end usage of funds. You could use it to fix your roof, do kitchen remodelling or even spend on home décor pieces. It is up to the individual how they choose to spend the amount. However, if you want to avail tax benefits on the interest paid for the home renovation, then make sure you have the invoices showing the related expenses.
Shorter Payback period in personal loan
The repayment term in a personal loan is usually between 12 months to five years, whereas a home improvement loan under a home loan can go up to 15 years. With longer tenure available in renovation loans under home loans, one might be tempted to choose longer tenure and end up paying even more amount at the end. A shorter repayment period does mean a higher monthly payment, but in this way, you can easily close the loan amount without stretching it to a longer duration. Many lenders, for example, Kotak Personal loan, offers flexible EMI options spread over a tenure of 1-5 years, and with attractive Kotak Personal Loan Interest rates, one can easily plan their loan repayment and foreclose it timely.
Interest rate
The interest rate on a Personal loan for home renovations is widely competitive and most economical depending upon the tenure and repayment schedule selected by you. Kotak Personal Loan Interest rates, for example, start from 10.75%. If you have a high CIBIL score, close to 900, you can even get a higher loan amount at a low rate of interest. Or, if you are looking for a way to improve your CIBIL score, then paying off a personal loan on time can hugely impact your CIBIL score to increase.
One can check their personal loan eligibility online within a few minutes by selecting the chosen lender’s mobile application. For example, with Kotak Personal Loan, you can check whether you are eligible for the loan in under one minute by filling up the form online. This is not only convenient but allows you to plan home improvement-related expenses quickly without waiting. Under personal loans, the loan application process for a personal loan is pretty straightforward. For example, the Personal loan of Kotak Bank charges 2.5% of the loan amount as a processing fee, and other charges are applicable only if you default on the payment. If you know the expenses for home renovation could run into lakhs and you have other home-related expenses to take care of at present, then opting for a personal loan is a better option as it doesn’t have any restriction on the end usage of the funds. With a competitive interest rate, Kotak Personal Loan Interest rates, for example, start from 10.75%; one can spread the loan amount to 12 months to five years and not get burdened by the home-improvement expenses all at once.
