Home remodelling or home improvement loans help in paying for repairs, renovations, and interior updates that need to be undertaken to improve the overall value of our homes. Given the extra space needed for working or studying from home during this pandemic, a lot of people are looking for remodelling their homes and need upfront cash. The home remodelling loans are a perfect way to finance those remodelling plans.And so, in today’s article, we will share with you the 4 best financing options you can look into for your home remodelling project in 2021.
1. Personal Loan
One of the first and best options you can consider for financing your home remodelling project is to take a personal loan. In simple terms, a personal loan can help you borrow a certain amount of money from the lender and pay it back via easy repayment solutions while enjoying a competitive rate of interest and instant disbursement.
Since this is an unsecured loan, your loan eligibility will depend on credit score, your salary, and financial record. One of the biggest advantages of taking a personal loan is the flexibility that it affords. You can use it for any purpose that you want, in this case your home renovation. Since no home appraisals are required, the disbursal is quicker. This is suitable for people who do not want to put up any collateral or do not have any significant asset to take out a loan. Another advantage of personal loan is you can apply for smaller amounts as opposed to perhaps a home equity loan.
Also Read: Quick Guide to Mortgage Loans
2. Loan on Credit Card
The next option available to you for financing your home remodelling project is to take out a loan on your credit card. Most credit card companies in India have the feature of giving out a loan up to 90% of your credit limit right from their mobile apps, thus saving you from the trouble of going the extra mile and filling out a separate application form.
Along with this, once you get the loan against your credit card, you have the option of either repaying the entire amount in bulk or converting it into easy EMIs.|
The only disadvantage of taking out a loan against a credit card is that it can get quite expensive over time and especially if you fail to meet your EMI repayment every month. Thus it is always advised that you check the applicable interest rate along with your credit score beforehand.
Also Read: Personal Loan or Credit Card Which one would you go for
3. Home Renovation Loan
The third option available to you is to use a home renovation loan, which is a financial instrument specifically designed to finance a home remodelling project. Multiple financial institutions in India offer this type of financing, and you can easily avail of up to Rs.1 crore both at metro as well as non-metro locations. Most home renovation loan interest rates are quite affordable, and they also have the added benefits of easy repayment plans and quick disbursal.
4. Home Mortgage Loan
Last but not least, you always have the option of choosing a home mortgage loan. The difference between a home renovation loan and a home mortgage loan is the fact that the former is an unsecured loan, meaning you do not need to pledge any asset or collateral, and the latter is a secured loan, where the loan amount will be disbursed against the value of your house or property.
One of the biggest advantages that a home mortgage loan is the low interest rate and the wider repayment tenure that is offered. You also get a potentially larger amount since you will be putting up a collateral to avail the loan amount.
Most home improvement loan interest rates are low and they arrive with higher loan amounts and longer tenures.
Also Read: Buying a house Here are tips to reduce your home Loan Interest Rates
A couple of points to note
Before you apply for a home improvement loan, consider your budget for the whole remodelling process and how much you can pay off quickly without putting a strain on your finances. Also consider how qualified you are for the loan since credit score and get pre-qualified with lenders who are likely to offer you one.
