Should I Take Out Loan For Home Improvements?

It is often thought that your home reflects your inner self. So renovating it is the best way to give it an all new look and ensure that it is a cozy place to live adding its value. However, renovating your home comes for a hefty price and the question is about arranging the funds. You need to check whether you have sufficient funds to pay for it or you need to borrow. If you consider borrowing, then opting for personal loan for home improvement is a good judgment. However, you need to check the commercial loan rates if you have business expansion plans.

Reasons to take loans for home improvements

• Collateral free loan: When you choose to opt for personal loans to renovate your home, you are not required to pledge your property as collateral. It is repaid through EMIs and the tenure generally ranges from 12 months to 60 months. It gets processed much faster requiring minimal documentation.
• Lesser interest: In spite of higher interest rates in personal loans, you have to pay less amount of interest in total because you need to repay the loan maximum within 6 years. In case of loan against property, the tenure is longer ranging from 10 to 20 years to repay the loan where you actually pay a higher amount as interest altogether.
• Borrow as much you require: In case of personal loans, you can borrow the amount you require. However, the maximum amount that you can borrow depends on your annual income and not your property’s value. So when you go for personal loan, you can even borrow a smaller amount or a higher amount. You can make use of the EMI checker to find out your eligibility for the loan.
• Quick disbursal of funds: With the reputed finance company, you can apply online requiring minimal documentation, get your loan approved, and funds released within 24 hours.

Types of loan available for home improvement

• Personal loan: It is a type of unsecured loan which you can borrow for any personal reasons. Personal loan is approved based on your credit score and annual income and does not require any security.
• Home improvement loan: It is a popular option for home renovation having a tenure of about 15 years and interest rates start from 9.55%. For woman applicants, additional discount of 0.05% is applicable.
• Home loan top-up: You can go for this option only if you have an existing home loan. When you choose this option either the payback period gets extended or amount of EMI becomes higher. Due to lower interest rates, it is considered as a better option.

Choosing the best option

Loans can broadly be categorized into secured and unsecured loans. To avail secured loans, you need to collateralize your property and the lender holds the deed until the loan is repaid. Secured loan is the most popular option because of lower interest rates, longer repayment tenure, and higher borrowing limits. Unsecured loans are approved on the basis of credit history, available resources, and do not require any collaterals. However, unsecured loans have higher interest rates as the risk associated is higher.

Reema Sharma is a professional content writer specializing in blogging, press releases. I would like to share some knowledge by that Articles.