Personal Loan

How to Finance Home Renovation Using a Personal Loan?


Often, one would like to make some changes in their home. It can be anything like changing colour, getting expensive furniture or many more. From time to time, one would want to change the look of their house. If in an Indian family, then during celebrations or festivals, it is a general notion to change the look of one’s house. After this is noted, the festivals in themselves have a cost implication. So, renovating on a tight budget is not a great plan. This would affect the quality of the renovation. This is the reason personal loans for home renovation are taking over the market. 

What Does One Mean by a Home Renovation Loan?

A home improvement or renovation loan is a type of unsecured loan. This means that no security or collateral is needed for these types of loans. This is different from a mortgage loan or housing loan. That is why no deed of one’s home is required. 

Mostly, a personal loan for a home renovation can be repaid without much problem. One gets to repay it in monthly instalments, i.e., EMI. The period can vary between 12 months to 60 months. The EMI is decided based on many factors. The principal amount is one factor, processing fee and rate of interest are the others. 

If the person fails to repay the money within the given time, then a penalty is levied. A person can also choose to close the loan before the completion of tenure. But some banks and agencies charge a penalty for that. It is essential to read the fine print before opting for any personal loan for home renovation.

What are the Eligibility Criteria for a Loan Application?

  1. Should be a citizen and resident of India. 
  2. The age bracket should be between 21 years to 60 years. 
  3. Needs to be either salaried or self-employed to apply for a personal loan for home renovation.
  4. The credit score should be good. Preferably above 750. 

Why Should a Person go for a Personal Loan for Home Renovation?

There are several options with the help of which one can finance their renovation goals. A credit card is an excellent option for a person who aims to achieve short-term renovation goals. But then, credit cards do not offer the stability that a person provides. The home improvement loan offers a much lower APR than credit cards. It also ensures that there are no fluctuations in EMI during repayment. 

But most renovation plans are high budget. So, a personal loan for home renovation serves the purpose most accurately. The amount gets disbursed to one’s bank account. For petty expenses, one uses a personal loan to give cash payments. 

This loan also adds to the property value. Here is how:

  1. Property value helps to increase with home renovation: No matter if a person plans to sell their place or continue using it. This renovation helps one to increase the value of the property. Real estate prices are rising, so renovating it would get one great deal. 
  2. For maintenance, the renovation of a home is a must: All types of houses need maintenance. If taken care of at regular intervals, one can avoid the massive problem in the future. 

What are the Benefits of This Loan?

  1. One can opt for a collateral-free loan: This being unsecured, does not need any type of security or collateral.
  2. The application process is simple: Today, almost all personal loan for home renovation provides an online form fill-up facility. This hardly takes 15 minutes. Even uploading documents and verification have been digitalised. With this, the application gets approved quite fast. The approval and disbursement can take as less as 24 hours. 
  3. Unexpected expenses can be taken care of as it gets tough to provide an extra amount when needed during renovation. And it is impossible to know exactly how much would be spent on the entire process. Mainly one can have a rough estimation of the expense. So, when the renovation starts, one needs to be prepared for unforeseen costs. If a person has taken a loan, they need not worry as the loan amount will cover all those expenses. 
  4. Loan details can be tracked online: Almost all the loan information can be accessed online. One is provided with a set of login details that stay unique. With the help of that, the person can track their loan. 

How Can One Apply for a Loan?

  1. The application form needs to be filled out. 
  2. The loan amount needs to be selected.
  3. Necessary documents are to be submitted: 
    • KYC documents, i.e., address and ID proofs.
    • Salary slips for salaried persons. Financial statement and audited income for a self-employed person. 
    • Statement of bank accounts for the past 3 months. 
    • Employee ID for salaried person. Business proof is needed for a self-employed person. 
  1. Now the loan gets approved, and the amount is disbursed. 


Home renovation is a dream project for many. Unsurprisingly, One would want to take great care in renovating their house. In such a case, no one would want to face any financial problems and compromise the outcome. A Personal loan for the home renovation is the best option in such a situation. Banks and many financial agencies provide this facility. If a person is looking for a financial option then “Piramal Finance” is a good personal loan/financing option for buyers.