How to Choose the Right Home Improvement Loan for Your Project

By: Homeloan0 comments

A Home Improvement Loan is a loan that is available for the purpose of making improvements or renovations to your home, such as adding rooms or floors to your home, painting your home, doing external or internal works or alterations, remodeling your home, etc. Owing to this, they are also known as home extension loans.

There are several types of Home Improvement Loans available.

  • A Home Improvement Loan

A Home Improvement loan can be taken out on top of your existing home mortgage. When this is done, you have a much better chance of obtaining up to 100%.

A new customer may be approved for only about 70% to 80% of the expected cost of a home improvement. With the lowest home loan interest rate, HomeLoans4U is at the forefront when it comes to loans of any kind.

  • Top-Up Home Loan

A top-up home loan is another type of loan that can be used for home improvement. However, this type of loan comes with an open-ended use, meaning that it can be used for any purpose, such as financing education or starting a business.

  • Personal Loans

A personal loan is one of the easiest and most convenient types of loans. It can be used as a loan for home improvement, but it can also be used for any other purpose.

Documentation

A personal loan requires minimal documents, such as a salary/income statement, address, and identity proof. There is no collateral requirement.

Interest RateA personal loan has a higher interest rate, ranging from 12-25%.

Processing feeA processing fee is higher and ranges from 2-3%.

Fixed-rate Personal Loans

A fixed-rate personal loan has a penalty if you prepay the loan.

Tenures

Personal Loans have shorter tenures of up to 5 years.

  • Gold Loan

Loans can be obtained against the security of gold held by you. This comes across as an easy way to put into use an illiquid asset like gold. This loan is easier on documentation as it is availed against the security of a pledged asset.

  • Loan against Property

If the property you want to improve/change is free of the previous loan, you may also want to consider a loan against it. This type of loan involves mortgaging the property to the lender and allowing a loan of 50% to 60% of the value of the property. This type of loan is ideal if you need a lot of funds to improve your property.

Conclusion

A home improvement loan with your current lender is the best option in terms of tenure, interest rate and tax benefits. If you are unable to get a loan from your current lender, it is advisable to look for other loans. HomeLoans4U, the trusted leader in various kinds of loans, provides you with loans at the lowest interest rates.

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