Term Of The Day: Home Improvement Loan
Home improvement loans are intended to finance the renovation of an old house, or of a purchased house or apartment.
PropTiger Explains Home Improvement Loan
Many home buyers do not fully understand how often a house requires maintenance, painting, tiling and other forms of renovation. Renovating your home is, at times, expensive. But, home improvement loans are becoming increasingly popular in India, especially tax deductions are available on the interest payment. To obtain a home improvement loan in India, you should create a rough estimate of the amount that is required to renovate your home, and submit it to the bank at which you are applying for a loan.
Home improvement loans are available for all types of construction work done inside your home, and for painting, plumbing and external elevation. Some banks provide loans for buying furniture too. The loan process would be easier if you apply at the same bank from which you had obtained the home loan. The bank may give the money to the contractor, or to you, when you submit the receipts and bills. Though this is not necessarily the case, some banks verify whether renovation is done as you had mentioned while applying for the loan. Most banks, however, do not.
Indian banks will provide up to 80% of the total expenses, while the rest has to be met by you. The loan period may extend up to 15 years. For instance, HDFC's home improvement loans are for tiling and flooring, internal and external plaster and painting and other forms of enhancement. HDFC extents home improvement loans to both existing and new customers with repayment through monthly installments, at home loan interest rates.
The amount you would receive will depend on the estimate of a certified architect, your ability to repay, and the total value of your home. Your credit history matters too. Your credit history should be good for at least the past six months.
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