Utilising your savings for a home renovation might not be the ideal choice keeping in mind the availability of easy and convenient alternatives. One such healthier and easier alternative to accumulate funds is to apply for a home improvement loan. A rising 20% growth in the application of personal loans between years 2017 and 2018 is observed reflecting its gain in popularity.
Furthermore, availing home improvement loan can be simplified further if you are thorough with all the factors affecting your loan. Understand the below points before acquiring a personal loan –
Things To Keep In Mind Before Applying For A Home Renovation Loan
- Eligibility criteria
Every financial institution offers unsecured loans to candidates who adhere to their prescribed eligibility conditions. Generally, leading lenders seek these eligibility conditions for personal loans –
- Applicants must be an Indian resident within the age of 23 and 55 years.
- Loan applicants must be a salaried employee of an MNC, private, or public limited firm.
- Candidates should withdraw a higher salary than the minimum salary range required by their lenders.
- Documents required
Interested credit seekers must get information about the documents required by financial corporations so that they can arrange for it in due time. Necessary documents required for application and acquisition of home improvement loan are listed below –
- Identity proof.
- Address proof.
- Passport-size photographs.
- Bank account statement for the last 3 months.
- Financial obligations
Every individual has some financial obligations to meet at the end of month. Therefore, before applying for a personal loan, one should make calculations on how much more outflow they can afford for that month. Applicants can make use of an EMI calculator to evaluate the EMIs they will need to pay every month for loan repayment.
- Rate of interest
Interest rates can either be fixed or floating for unsecured loans. The floating rate depends on the MCLR set in accordance with the repo rate determined by RBI. Make sure you choose a reputed lender, loan amount, and tenor to fetch attractive rates of interest that do not stress your financial standing anymore.
Leading financial institutions provide extensive tenor options of up to 60 months. Also, the tenor chosen affects your monthly instalments along with the rate of interest. Therefore, by choosing longer tenor options, individuals can reduce their estimated monthly instalments. However, note that the total cost of loan will also increase as the interest amount paid increases as the tenor extends. Now, give your home an instant makeover with home renovation loan while you reduce your financial burden by making the right decision for tenor.
NBFCs like Bajaj Finserv provide such extended tenor of up to 60 months along with pre-approved offers on loans. These offers apply to various financial products including home loans, personal loans, business loans, etc. Check your pre-approved offer by providing only some essential data such as name and contact number of applicant.
- Estimated monthly instalments
Calculation of estimated monthly instalments should be done before you apply for a loan amount as they can significantly help you plan your finances for the month in advance. Utilise interest rate calculator and input a loan amount, rate of interest, and tenor as variables to evaluate EMIs.
- Cost of loan
Cost of the loan includes the amount charged by financial institutions such as processing fees, EMI bounce charges, part or full pre-payment charges, etc. Consequently, make sure your lending institution maintains transparency in the process and with the additional charges applicable to avail a loan.
These are everything you need to know about home renovation loans. Keeping these under consideration, an applicant can ensure that their unsecured loan applications aren’t rejected. Besides, one can better plan their credits and monthly financial obligations with these in mind. Apply for a home renovation loan and give your home the much-needed upgrade.