Planning to Take a Home Renovation Loan: Get Started with these Five Steps

Home Loan

Purchasing a house is a one-time affair but requires maintenance, repair, and upgrades throughout its life. Since one’s abode reflects the homeowner’s personality, taste, and class, most people like to keep their home well-maintained and comfortable. One may also want to extend or refurbish the house to increase its resale value. However, redoing a house requires a sizable amount of money. 

A home renovation loan can take care of the expenses related to home renovation, repair, and redesign. These days, leading lenders are offering loans for renovation at a low home renovation loan interest rate, making it the most attractive option to remodel one’s home.  

What is a Home Renovation Loan

A home renovation loan is a collateral-free loan that a person can avail of to finance home improvement. One can use it for repairs like faulty plumbing, upgrading the electrical system, painting the interior and exterior walls, changing the floor tiles, or restyling, like furniture and home decor. One can get a home loan in Chennai and other parts of the country and apply for a home renovation loan to beautify the residential property. These days, several leading lenders offer home improvement loans at low-interest rates, customer-friendly loan terms, and short processing times to benefit customers.

5 Steps to Get Started with a Home Renovation Loan Application

A planned approach to applying for a home renovation loan can help a borrower speed up the loan processing and avail of a loan without any hick-ups and delays. Here are the steps one can follow to apply for a home renovation loan:

Step 1: Decide the loan amount required: Before applying for a home renovation loan, the homeowner should list repairs and other expenses. He should set a budget that includes all the expenses he would incur in the renovation process. It will help the homeowner calculate the amount he needs to renovate the house. Knowing how much money one needs can save a person from applying for an unreasonably high loan amount, which has a high chance of getting rejected. If the high loan amount gets approved, the borrower will pay extra interest charges for a loan he did not need.

Step 2: Look for pre-approved home renovation loan offers: Leading banks extend pre-approved loan offers to their existing customers. The documents required for pre-approved loan offers are very few, and the processing time for such loans is less. Moreover, the home renovation loan interest rate for pre-approved loan offers is relatively lower. Banks usually offer pre-approved home renovation loans to customers having good past loan repayment records and healthy credit scores. 

Step 3: Check the eligibility criteria: Various lenders have different eligibility criteria for granting a home improvement loan to loan applicants. One can visit the financial institution’s official website to check the eligibility criteria. One can check the loan eligibility criteria and ensure he meets them to save his loan application from rejection. If there are shortcomings like a low credit score, lesser salary than required, or multiple debts, one can rectify these issues before applying for a home renovation loan. It will help him get lower interest rates and quick loan processing.

Step 4: Look for a lender with flexible terms: To have a pleasant borrowing experience, selecting the right lender for a home renovation loan is crucial. Look for a lender with low-interest rates and transparent loan processing. Consider the loan processing fee, other charges, and the loan interest rate. The loan duration should give one enough room to make a comfortable loan repayment. One can look for a lender with prompt customer service to ensure hassle-free loan processing. 

Also Read: Six Things I Wish I Had Known Before Purchasing My First House

Step 5: Calculate the loan repayment amount beforehand: One can use the EMI (Equated Monthly Instalment) calculator to calculate the monthly payment amount. It can help the borrower plan the repayment accordingly. The loan EMI should easily fit into the borrower’s monthly budget to avoid payment defaults.

A well-maintained house brings comfort and convenience to the homeowner. It also keeps the property’s value high. A home renovation loan can help a person comfortably manage the expenses related to home repairs and renovation.