Personal Loan

How to Finance Home Renovation Using a Personal Loan


Home renovation loans are available to people who want to fix or improve their homes. This includes putting down new floors, painting, tiling, upgrading, remodeling, repairing, improving, adding on, etc. 

As a type of personal or home loan, many banks, NBFCs, and HFCs (Housing Finance Companies) offer home renovation loans. One can also get a personal loan to fix up, improve, or add on to their home.

Personal loans have no restrictions on how they can be used. People with a home loan can also apply for top-up home loans. These are different loans that can be used to make home improvements. 

Note that personal loans for home improvement are unsecured. In contrast, home and top-up loans are given in exchange for a mortgage on the property that is to be improved.

Why Apply for a Home Renovation Loan?

A personal loan is an unsecured loan that does not need any assets or collateral for approval. It’s easy to get money for different things, and the borrower can pay it back based on the terms and conditions.

Since the borrower doesn’t have anything to put up as collateral, the lender will look at the credit score, credit history, and income to decide before approving the loan. 

On the other hand, personal loans have a higher interest rate than secured ones because they are not based on a fixed rate but on the borrower’s ability to repay the loan. The average annual percentage rate starts at 12% per year and can go as high as 28% per year. It is best for someone to renovate the house. Here are some of the reasons mentioned below why someone has to go for a personal loan to renovate a home.

  1. No Restrictions

When applying for a personal loan, knowing if the money can be used for something other than what was planned is essential. For example, if someone gets a car loan, the money can only be used to buy the car, not for a trip. On the other hand, a borrower can use a personal loan for anything they want.

The money from a personal loan can be spent on anything the borrower wants, as long as it doesn’t break the law. Someone could use that money to pay for their child’s college, wedding expenses, a significant home improvement project, a luxury item, more investments with the hope of making money, and so on.

  1. Easy Process

Personal loans are short-term loans that can help someone get the cash they need quickly and easily. The process for the approval of a loan could take anywhere from 10 minutes to 7 days, depending on the lender and the borrower’s credit history.

Other loans require an evaluation of a financial instrument and a long process. Both of these take time and can slow down the process of getting a loan.

  1. Select Flexible Repayment Terms

If someone works as a salaried employee and wants a personal loan, they should be able to get one with low interest rates. Personal loans let the borrower pay EMIs that are easy to handle, and they can choose a long tenor to spread out their payments over a more extended period. This helps them pay without any burden. 

Lenders usually give borrowers 60 months to repay the loan, so borrowers have plenty of time to make regular payments. When making a budget, use an EMI calculator to determine how much money they need to send monthly for a personal loan.

  1. Get Tax Benefits

Section 24 of the Income Tax Act lets people deduct up to Rs. 1.5 lakh in interest paid on top-up loans for home improvements. This includes the tax break and interest paid on the mortgage.

  1. Flexi Facility

This unique option, which some lenders offer, makes it even easier to pay back loans. People can borrow as much as they need for home improvements and only pay interest on the amount they use. This lets the borrower pay for things as they come up. Also, they can prepay without being charged extra if they have extra money. 

Borrowers can also choose to pay only the interest as the EMI for the first year of paying off the loan. This helps track the money better and lowers the monthly payments.

How to Apply for a House Renovation Loan

The application process for personal loans is easy. One can borrow up to Rs. 25,000,000. However, a personal loan can be used for anything from replacing old tiles to fixing the ceiling. Borrowers can do whatever they want with the approved loan amount, like paying it off early.

Before applying for a personal loan, one should figure out how much money one needs. This way, they will be able to borrow the amount they need.

  • First, fill out the required information. This includes the borrower’s work history, salary, company name, address proof, and bank statement.
  • The second step is to choose a lending partner by choosing a bank with lower interest rates, processing fees, and other facilities. 
  • Next, enter the loan amount and length of the EMI.
  • Lastly, once the loan is approved, the bank will deposit the money into the borrower’s account. 


A home renovation loan is more challenging for banks or NBFCs. Home loans require a lot of paperwork and collateral for approval. Hence, a personal loan for home renovation is the best option. People should research personal loans properly before applying. 

Saving money for home renovations requires a lot of time. If someone wants to renovate their home quickly, they can go for a personal loan. It is easy to get, and people can opt for easy monthly installments. Piramal Finance is one of India’s largest financial institutions. It funds people in all sectors, like wholesale and retail.

If someone gets a personal loan from Piramal, it will help them with immediate money needs. Someone can use a Piramal personal loan to pay off school fees or buy a gift for someone’s wedding, and the borrower won’t have to worry about prepayment or foreclosure fees.