Home renovation and maintenance on a timely basis are essential to keep a house in good shape. Regular maintenance work such as remodeling, extension, painting, partial restoration is helpful to preserve the appearance and health of a residential property for a longer period.
According to recent reports, the global home improvement market had a $762.9 billion valuation in 2020. However, with inflation on the rise, home improvement plans can be quite an expensive affair. With a home renovation loan, consumers can easily finance the remodeling costs. Here are some of the best ways to fund a home renovation plan.
Top ways to finance home improvement cost
- Home improvement loans
Various lending institutions provide specialized loans that can help borrowers cover the cost of painting, extension, remodeling, and other up-gradation of residential properties. Home improvement loans are of different types, i.e. secured and unsecured, and borrowers can opt for an extended repayment tenor.
- Top up loans
Apart from home renovation loans, borrowers can also opt for top-ups on their home loans to cater to their home improvement plans. Individuals who already have a running home loan can seek an additional amount from the lender as a top-up.
Borrowers are eligible to receive up to 50% of the housing loan as top-ups. The interest rate is usually the same as that of the home loan. However, some lenders might charge higher interest rates, depending on the credibility of a debtor.
- Line of credit
If the home renovation plan includes minor repairs and purchases, one can complete it using a credit card. Customers can fund a series of home refurbishment works through their credit cards. But they must ensure to pay the amount within the stipulated time to avoid incurring any penalties and hampering their reputation as a borrower.
Besides knowing how to finance home improvement costs, prospective borrowers should understand what they should consider before applying for any of them.
- Personal loans
Personal loans for home renovation are unsecured credits that individuals can use to meet an array of refurbishment works on their houses. This financing instrument is ideal for consumers as the personal loan interest rates are competitive. Additionally, borrowers can select a repayment period at their convenience.
However, to apply for a personal loan and secure the required credit amount depends largely on the credit score and monthly income of an individual.
Home improvement requires a suitable financing plan, and hence one needs to keep the following points in mind before applying for a home renovation credit:
- Finalize the requirements and the loan amount
It is essential to list down everything that requires repairing or the things that need furnishing and upgradation. Once done, borrowers should calculate all the expenses to precisely estimate the fund they require. They need to decide how much they can afford to pay for each item and draw a budget accordingly. Borrowers can, in this way, avoid going overboard with additional debt in the future.
So, homeowners should ideally plan their home renovation and apply for a credit accordingly.
- Compare and opt for a suitable lender
Several lenders offer different types of financial products like personal loans, home renovation loans, and more, with interest rates that vary from lender to lender. So, customers should conduct thorough market research to compare and analyze the lenders before finalizing.
Additionally, one should check the fees and charges to find the most affordable financing option for home renovation.
Furthermore, leading NBFCs like Bajaj Finserv offer personal loans for home renovation with minimal documentation, quick approval, and low processing fee. They also provide pre-approved offers to streamline loan application processes. Such offers are available in a wide range of financial products such as personal loans, business loans, credit cards, and more. Individuals can check their pre-approved offers by entering their name and contact number.
- Keep an emergency corpus
Individuals, while planning for a home renovation, should also focus on maintaining an emergency corpus. It will provide emergency financial support if needed and works as a safety net.
Home renovation loans are tailor-made financing options that can aid one to meet related expenses. At the same time, there are other financing options like a personal loan that can solve the purpose as well. In that case, prospective borrowers can plan personal loan EMIs and apply accordingly to avoid any hassle in the future.
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