A definitive guide to apply for a house renovation loan
A home is more than a place for residing and indeed it is the place where the heart dwells. As the years fly away, there arises a need to renovate and rehaul the home and its decor. More often, we delay such projects due to the lack of adequate finances. Well not anymore, because just like home loans, banks and financial institutions offer a loan for the purpose of house renovation and 80-90% of the amount is sanctioned for repairing. There are provisions to get both secured and unsecured loan to renovate your house. A house renovation loan is quite affordable for its lucrative interest rates and flexible repayment options.
Fundamental features of house renovating loans:
Fast and simple steps: Application for a home renovation loan is quite simple as it requires minimal documentation. The interest rates charged on these loans are also much less compared to a personal loan. Submission of few documents like income statement, residential proof, property-related documents, identity proof, photograph, and the approximate cost of renovation are required at the time of loan application. Some banks and NBFCs disburse the loan within the shortest period of 24hours after the loan application gets approved.
Flexible repayment tenure: According to the financial needs and conditions, banks and financial institutions provide flexible repayment options to their customers. These include EMIs, post-dated cheques, payment after 10years, repay as per capacity and convenience, etc. These facilities may vary from bank to bank and therefore, a borrower must check these facts properly at the time of loan application.
Captivating interest rate: Nowadays, thebanks have lowered the interest rate on house renovation loans. Other than comparing the interest rates, various factors such as terms, conditions, tenure, foreclosure charges, and other aspects should also be scrutinized before finalizing a financial institution.
Guide to apply for a house renovation loan
Property documents: When you are planning to apply for a home renovation loan, you must possess the original document of the property deed. The estimated cost of the rehauling and repairing work by an architect or civil engineer is also required.
Co-applicant: Much like the home loan, there are provisions for co-applicants in a house renovating loan as well. The co-applicant can be a blood relative or immediate family member as per the norms of the bank. There is no need for a co-applicant to be a co-owner of the property but in case of any legal dispute, the co-applicant is equally held accountable.
Documentation: The application form must be appropriately filled and signed by the borrower along with the co-applicant if any. Documents required are identity proof, residential proof, the income statement, and photographs of both the borrower and co-applicant.
Processing fees: A nominal amount is charged as processing fees by some banks and financial institutions. This is basically a small percentage of the loan amount sanctioned. The processing fees have to be paid in a cheque at the time of loan amount approval.
Loan procedure: After the submission of the application, if all the required documents are found in order, the loan gets sanctioned. Repayment tenure of 15years is provided to the borrower. Some banks extend this period up to 30 years.
Important fact: While house renovation loans are approved for restructuring and renovating your house, there are certain things where the loan amount will be not applicable. Renovating the exterior portion of the house and purchasing mobile furniture, etc cannot be funded through this loan.
Now with easy availability of house renovating loans, it is possible to design your home the way you have wanted. A home renovating loan is designed in a way to make life easier for people, but the borrower must be aware of specific criteria like the source of income, the applicant’s age, and credit history. These might affect the profile of the borrower from getting a house renovation loan.