Thursday, 3 August 2017

My home my way- Get your desired home renovation loan

Do you want to add a room to your house, or change the interiors to keep up with the latest trends and designs? Is there a structural repair in the house that requires immediate attention?  Renovating a house is a costly affair. Sometimes our plans for remodelling take a backseat because of lack of funds. But with home renovation loans all your dreams can turn into reality. There are many banks and NBFCs that offer you financial assistance and help you cover for these expenses. So you no longer need to constrain your plans because of budget issues.
Kind of loans you can avail for home renovation
Home loan top up- Some lenders offer renovation loans under the banner of home loans. If you have an existing home loan and you have been paying your EMIs regularly, then you can become eligible for a top up loan. Your payback period will be extended and you will have to pay a higher EMI on your home loan. It is a good option if you have availed a home loan at a lower interest rate.
Home renovation loan – These loans have become popular in recent times. To get an approval one must ensure that one has a healthy credit profile, good employment history and a stable monthly salary.
Personal loan- You can also avail an unsecured personal loan to cover for the renovation expenses. You can even use these funds to buy furniture and electronics for your house. This option usually turns out to be much cheaper than the EMI option with the retailers or purchase through credit cards. But these loans can be obtained only if you have a good CIBIL rating.
Preparing for a home renovation loan
Estimate the cost of renovation- To determine the amount of loan required, one needs an estimate of the total cost of renovation. You can get an estimate from multiple contractors to arrive at an average and then make an allowance of 15-20% of the amount to meet any unexpected costs that may arise in the future. Also take into consideration your capacity to pay the monthly EMIs. You may either reduce the loan amount to fit your budget or increase the tenure of the loan if you cannot afford the specific EMI.
Check your credit score- Your CIBIL rating plays a major role in determining whether you will be approved for a loan or not. So check your CIBIL score and report before applying for a loan. If you notice any discrepancy or fraudulent transactions then you need to take steps to get the errors corrected.
Benefits and features of home renovation loan
Easy application- The process of applying for a home renovation loan is quite straightforward provided you have all the documents, low debt-to income ratio and an excellent CIBIL score. The documents required for the loan generally include KYC documents, income proof, property documents, employment proof and details of the work that you need to carry out.
Loan amount- The loan amount for which you are eligible depends on several factors like age, educational qualification, income, savings, potential to meet the new obligation, assets and liabilities and credit history. If you wish to get approved for a higher amount you may consider getting a co-applicant.
Interest rate- Home renovation loan interest rates vary from bank to bank. It is not necessary that the bank with which you have a relationship will give you best deals on interest rates. In order to avail the best interest rates one needs to have an excellent credit score. A rating of 750 and above will give an assurance to the lenders that you are a responsible borrower who makes repayments diligently. Since the risk of lending money to you will be very less, lenders will be ready to offer you lower interest rate and better terms and conditions.
Loans for Bad credit
You know that a good CIBIL rating is necessary for getting a loan approval. But what if you have a bad credit history? Is there a way you can qualify? Surely there is. A co-signer with a good credit standing can help you get an approval. You can also use your home as collateral to provide assurance to the lender that his investment is safe. Home equity line of credit can make you eligible for a higher loan amount even if your CIBIL rating is not very impressive. You can also try approaching online lenders who provide loans for bad credit but charge a high interest rate.
So do not hesitate anymore to undertake that extensive d├ęcor and furniture re-design that you have always wished for. Increase the value of your home and satisfy all your passions, hopes and dreams with a home renovation loan.

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