We all love to keep our homes up to date and well maintained. But sometimes the maintenance does not stop at fixing a few broken tiles and pipes. This is when your home needs a serious renovation. A renovation need becomes even more tricky to handle when it falls during the festive season.
Auspicious occasions like Dussehra and Diwali can financially upset you which is why most people avoid making additional expenses during this period. However, if your home needs renovation, then there are chances it cannot be avoided any further. So, to deal with this type of financial crisis, you can try taking a loan against property for home renovation.
If you are wondering if taking a loan against property in India is the right choice, then this article will help clear your doubts.
Loan Against Property Types
Taking a loan against property for home renovation does not mean that you have limited choices. Instead, there are various types of financing services that you can opt for while getting your home renovated.
Some of the loan types that you can avail under this category are mentioned below.
1. Secured Loan
Secured loans are an option which is readily available for everyone. It is a loan against property for home renovation which can be used any which way possible.
2. Top-Up Loans
If you require additional funds after taking a home loan, then this is the best choice. It involves a top-up facility given to customers who have paid their previous loan instalments regularly.
3. Home Improvement Loans
In case you’re looking for an extended repayment time frame then a home improvement loan is an excellent selection. It is a loan against property for home renovation which has been designed with reasonable interest rates.
Loan Against Property Eligibility
Keeping up with the eligibility criteria while taking a loan against property for home renovation is crucial. This type of credit facility is available for both self-employed as well as salaried individuals.
Here is a list of a few other criteria that you must keep in mind while applying for the loan.
- Your age should be between 25 to 70 years
- You should have a regular source of income whether from a salary or business
- You must be an official resident of the country
- You should have a good Credit Score and history
Loan Against Property Interest Rates
The rate of interest is a critical factor while deciding the most suitable loan against property for home renovation. You might think that a loan is an expensive alternative for getting your renovation expenses sorted. But with adjustable Mortgage Loan Interest Rates, it becomes one of the most feasible options.
The following are the factors which help decide the interest amount.
1. Floating Interest
With this kind of interest calculation method, the instalment amount can change depending on the market.
2. Fixed Interest
Fixed interest rates provide you with a more systematic outcome since they never change during the repayment tenor.
3. Risk-Based Interest
When, the interest rate for a loan against property for home renovation, is calculated based on risk. The amount is decided by the organisation depending on the risk involved in the transaction.
Loan Against Property Documents Required
There are not many documents which you require while taking a loan against property for home renovation.
The few basic ones which you need to submit to the organisation along with your application are the following:-
- Identity proof
- Permanent residence proof
- Official property documents
- Income proof
- Bank statement
- Tax return statement
By Alisha Antil
who is a financial advisor and have vast experience in finance and loans segment.