Home renovations are part of the process of owning a home from time to time. Many people go ahead with home renovation plans to enhance the value of their homes and also meet the needs of their families. While the need for increased comfort can be one of the most common needs for home renovation, some of the other common reasons are attempts to make the home more eco-friendly and sustainable. There can be many benefits of renovating a home. However, one of the aspects that gets many worries is the financial aspect.
The financial requirement for renovating a home has been increasing over the years, especially due to inflation. To meet these financial requirements, many opt for a home renovation loan. In this article, we have a look at the different elements of a home renovation loan and how you can finance your home with one.
By availing of a home renovation loan with an interest rate and EMI that suits your financial capacity, you can renovate your home in any way you want. It is important to check for certain aspects before going ahead with purchasing a home renovation loan. Let us have a look at each of these different aspects.
First, it is very important to check for the eligibility requirement of the home renovation loan. Different types of loans have different eligibility requirements. The home renovation loan eligibility can vary from a personal loan. So, it is important to check for these requirements before applying for a loan. By making sure that you meet the eligibility criteria, you can improve the chances of your home renovation loan being approved.
Another key factor to check while applying for a home renovation loan is the interest rate offered. The home renovation loan interest rate can determine how much finances you would need to repay the loan and can also be an estimate of the financial burden you may experience. The interest rate that you receive on your home renovation loan can also help you calculate the EMI along with the tenure.
The tenure of the home renovation loan is also important to consider as it will allow you to understand the flexibility you have to repay the loan. Having a longer tenure allows you more time to repay your loan with smaller amounts of EMI on a monthly basis. On the other hand, having a shorter tenure will require you to pay larger amounts of EMI over a shorter period of time.
With a home renovation loan, you can also experience tax benefits on the interest portion in addition to the loan amount. Under Section 24 of the Income Tax Act, you can avail of tax benefits up to Rs. 1.5 Lakhs on your interest amount. Moreover, if your home renovation loan amount is used on home-related expenses, you will be eligible to avail tax deductions on the principal amount of your loan as well. You can avail of a maximum deduction of Rs. 1 Lakh on the principal.
Typically, the home renovation loan provides you access to funds at a lesser interest rate compared to a typical home loan. Hence, it is considered to be a much more affordable option in comparison to a personal loan or any other similar loan. You can also opt for a longer tenure that thereby makes the repayment process less stringent.
Availing of a home renovation loan can help you renovate and redesign your home with less financial stress. You can opt for a home renovation loan ensuring that you meet the eligibility criteria. By meeting the eligibility criteria, you can increase the chances of getting your loan application approved. Moreover, it is also important to check the tenure and interest rate of the home renovation loan before applying to ensure that it aligns with your financial capacity.