How do You Smartly Finance a Home Renovation?


You worked hard to save money and are looking forward to giving your house a new look after a long time. Using the funds properly becomes essential when you have a tight budget. Be confident about your other decisions by learning how to finance the home renovation. Renovating an existing property is easier. This is when you have proper insights into the requirements and sections you want to customise.

Learning the steps to ensure you only spend within your budget and adequately utilise your funds becomes crucial. Let’s know more about how you can finance home renovation more effectively.

Stick to the process.

Whether it is expansion, renovation, or repair, you must ensure the optimum utilisation of funds. You should ensure that restructuring your home makes your loved ones feel safe and secure. It becomes equally important to plan out the process, from the requirements to the costs you incur.

  • Make a strict plan

No matter how big your aspirations are, always plan according to the funds you have. Refrain from being tempted by attractive options and spend your money smartly.

  • Observe your requirements

Plan out what parts of your home need repair, renovation, or restructuring. Make a customised plan for your expenditure on those parts so that you don’t overspend on them unnecessarily.

  • Opt for home renovation loans

Home renovation loans are quite beneficial when it comes to financing home renovation options. Most banks, non-banking financial corporations, and housing finance companies also provide this facility through their standard home loan products or as a service within the general category of home loans.

  • Choosing repayment methods 

After observing the renovation improve your home, you need to choose repayment options. You can either opt for EMIs for a fixed period, step-up instalments, or equated instalments to repay the home renovation loans.

Benefits of home renovation loans 

Unlike personal loans, home renovation loans have more accessible repayment options. These leave your credit and financial status unaffected. Home improvement loans have various benefits, as follows:

  • Eligibility – You can easily be eligible for a home renovation loan without income proof or tax documents. You can bring along a family member to improve your eligibility. 
  • Applicable to all – Homeowners applying for loans to finance home renovations could be anyone. From salaried individuals (like government employees) to self-employed persons (like business owners), renovation loans can be availed of by all.
  • Usage – You can avail of home loans to either renovate your house or restructure or repair certain sections of your property without any questions. 
  • Quick financing – After applying for home renovation loans, lenders will review your application. Officials will visit your property. They will authorise the approval. After this, you will be given funds in less than 72 hours.
  • Tax benefits – The EMI burden on home improvement loans is comparatively lesser than that of personal loans. Take advantage of a home improvement loan under Section 24 of the Income Tax Act of 1961. You must choose the best option among those offering competitive interest rates.

Eligibility to avail of home improvement loans 

The primary eligibility criteria to avail of home renovation loans are as follows – 

  • Age limit – You must be over 18 years of age to avail of home improvement loans.
  • Applicant’s status – You can be someone applying for the loan for the first time or an existing borrower looking for a loan to finance the home renovation.
  • Credibility – Your CIBIL score should be around or above 750. It increases your chances of getting a secured loan at a lower interest rate. 
  • Improved eligibility – To increase your eligibility for getting a home renovation loan, get a family member along. Add them as co-borrowers. 

Documents needed

The documents you need to produce to the lender are as follows:

  • Application form, including all the personal details
  • Age Proof – Marksheet, Aadhar Card, etc.
  • Income Proof – ITR documents, etc.
  • Proof of Employment – for salaried Individuals
  • Proof of Business – for Self-Employed Individuals
  • Proof of Address – Electricity Bill, Water Bill, Utility Bill, etc.
  • Property Documents
  • Estimated cost of repair

Schemes to finance home renovation 

Opting for home improvement schemes comes with long repayment tenures at a reasonable interest rate and EMI options. The following schemes facilitate home renovation loan options that you can choose from –

  • Bank of Baroda home improvement loans – 

This scheme offered by the Bank of Baroda is beneficial for individuals looking to finance home renovations. The loans can be used to repair, renovate, and restructure their properties. The residents of metro cities can avail of a loan of up to ₹5 crores (₹10 crores for residents of Mumbai). The interest rate starts at 6.85% with a repayment tenure of up to 30 years.

  • TATA Capital home renovation loans – 

One can avail of a loan of up to ₹25 lakhs at 2% processing fees. This facility by TATA requires no collateral, has maximum eligibility, and easy repayment options through EMI and step-up repayment. The interest rates start at 10.99% annually with a repayment tenure of up to 6 years.

  • HDFC Bank home improvement loans –

This scheme offers an easy documentation process, easier loan approvals, and flexible EMI repayment options. Borrow up to Rs. 75 lakhs at a 7.55% annual interest rate and processing fees of 0.5% (for salaried individuals) and 1.5% (for self-employed individuals). The repayment tenure under this scheme is up to 15 years, with applicable taxes.

  • Canara Bank home improvement loans – 

You can avail of a maximum loan amount of ₹2 lakhs under this scheme. The interest rates start at 6.9% annually with a repayment tenure of up to 5 years. The processing fee for this facility is 0.5% of the loan amount, plus applicable taxes. This scheme also has a smooth documentation process and easy loan approval.


It is ideal to opt for a home improvement loan rather than a personal loan with the risk of an interest spike. There are various home loans; one of them is a home improvement loan. This pays for all of your home’s renovations and the money needed for repairs.

Even these loan types are divided into additional groups based on the individual’s preferences. Through this article, you are now aware that you have the right to know the expenses, charges, and interest you must pay for your home renovation loan. Contact Piramal Finance and get in touch with our consulting experts if you want to know more about home loans and their benefits over personal loans.