House Renovation Loan – A Smart Way to Finance Your Home Upgrade

Upgrading your home often calls for more than just design ideas. It needs careful planning and adequate funds. While smaller changes like painting or fixture replacements might be managed through savings, major repairs or expansions usually need financial backing. 

That is where a house renovation loan can help you bridge the gap between plans and execution, without disturbing your long-term finances. Let us walk through how it works, what it offers, and how you can go about applying. 

What Is a House Renovation Loan?

A house renovation loan is offered to homeowners to upgrade or refurbish their existing property. These loans can be used for structural repairs, interior modifications, or utility upgrades. 

In most cases, these loans are offered as Top-up Loans, especially if you already have a Home Loan with the lender. If your repayment history is clean and you meet the eligibility criteria, you may qualify for a top-up without much hassle. 

How to Get a Loan for House Renovation?

If you are wondering how to get a loan for house renovation, here is how you can go about it: 

• If you already have a Home Loan with your lender, you may be eligible to apply for a Top-up Loan.  
• You can consider transferring your Home Loan balance to a new lender and apply for a top-up as part of the transfer. You can apply for a Home Loan Balance Transfer with Bajaj Housing Finance and avail of a Top-up Loan of Rs.1 Crore* or more, based on eligibility.  

Benefits of a House Renovation Loan

A loan for house renovations provides several key advantages: 

• Lower interest rates – As compared to unsecured loans, such as personal loans, Top-up Loans offer a competitive interest rate.  
• Quick disbursal – Since a Top-up Loan is offered to a borrower who has already availed of a Home Loan, the document verification and approval process does not take much time.  
• Flexible end-use – The loan can be used for all housing-related expenses.  

House Renovation Loan Interest Rates

The interest rate on house renovation loans varies based on the lender’s policies and the borrower’s profile. With Bajaj Housing Finance, salaried applicants can benefit from competitive interest rates starting at 8.90%* p.a.  

What Can You Use the Funds For?

This is where the flexibility of a house renovation loan comes through. You can use the funds for a range of purposes such as: 

• Structural repairs (walls or roofing) 
• Painting and flooring upgrades 
• Room remodelling 
• New furniture or built-in storage 
• Smart home installations 

House Renovation Loan Tax Benefits

House renovation loans also offer tax savings. Under Section 24(b) of the Income Tax Act, 1961. If you have availed of a house renovation loan, you can claim deductions of up to Rs.30,000 per year on the interest paid. Note that this benefit is available only for a self-occupied property 

Key Factors to Consider Before Applying

Planning to apply for a house renovation loan? There are a few important things to keep in mind, especially if you are thinking about availing of a Top-up Loan on your existing Home Loan.  

• Start with your EMI and loan tenure. An additional loan will impact your repayment schedule. So, it is worth asking whether the new EMI still fit comfortably into your budget.  
• Check the lender’s policy on fund usage. Some lenders only allow top-up funds to be used for housing-related expenses, such as repairs or remodelling. 
• Also, think about the loan repayment and assess whether your income can comfortably support the new EMI.  

A house renovation loan offers a structured and cost-effective solution for homeowners planning to upgrade their living space. Whether the objective is to improve functionality or address structural repairs, a house renovation loan can provide access to timely funds at a competitive interest rate.