Whether you’ve recently bought a new home or you’ve lived in a family home for generations, there might come a time where you need to carry out repairs and remodelling work. This work helps to bring your home in line with contemporary living standards. You will need funds for this, and if you’re short on finances, you can begin to explore different solutions.
Your choices
To renovate your home, you can avail of a loan against gold or a loan against securities. You can also take out a home improvement loan.
In the first two cases, you would be tying down assets in the form of gold or securities. Secured loans have assets handed over to lenders as collateral, until you clear off the loans taken against them. This practice is one that might not be welcome by many, especially if you’ve been collecting the gold for your child’s wedding or college fund.
In the case of home improvement loans India, you would need to extend your home loan, or have enough equity on it to borrow money. There are also certain criteria involved. In case you are looking for an extension on your existing home loan, you need to have paid off enough EMIs to have secured a stake on a percentage of the property. This percentage would then be enough to cover the amount you need as a loan. Also, you cannot take out a loan on a property that is in another person’s name. For instance, if your family home is in your father’s name, you cannot borrow against it.
Most home improvement loans are sanctioned only if they improve the value of your home in the event of resale, rent or lease. If you are carrying out cosmetic changes that do not meet this criteria, or if you are undertaking changes according to your beliefs like Vastu Shastra, you may not get the loan.
Why a personal loan for home repairs?
A personal loan is an unsecured loan and is approved more often than not, provided you fulfill their criteria. These loans involve higher interest rates than secured loans, but in certain circumstances, this type of loan is ideal.
Ways in which a personal loan are ideal to fund home improvement
- A personal loan requires no collateral and no explanations
- If you qualify for the loan based on your financial standing and your credit rating, the bank will sanction the loan
- Processing this loan is quick and easy, there is no need to furnish security documents
- You need not submit the cost breakdown of your home improvement project
- You can use the loan to carry out renovations on apartments or independent houses
- You can use it to renovate your old family home even if it is not in your name
- The loan allows you to remodel your kitchen, buy new appliances, or new furniture
A personal loan can be a quick solution in cases where you need unsecured loans for miscellaneous purposes. You can visit financial websites and do a comparison of personal loan offers from different banks and other financial institutions. You can even filter down the choices and pick the best personal loan to suit your needs.