Is It a Good Idea to Take a Personal Loan for Renovating Your Home?

One common dream most of us share is to be able to restore our ancestral home to its past glory at some point in time or the other. While there may be many reasons behind this motivation, one of the strongest continues to be the fact that our ancestral home, or even the home that our parents built for us, holds a strong place in our hearts. Most of us have grown up in these homes, and the best memories of our childhood were formed here.

But, renovating an existing property is no easy task, especially given the fact that it is usually an expensive affair. One option we can consider is to take out a personal loan, such that we can conveniently finance the project; however, is it a good idea? We will find out exactly that and more in today’s article.

What Is a Personal Loan?

Before we dive into the details of whether taking out a personal loan would be a good decision or not, let us first understand the actual meaning of the term. In simple terminology, a personal loan can be understood as a financial lending instrument through which you can borrow a certain amount of funds, usually in the range of?10,000 to?500,000, and pay it back via flexible EMIs (Equated Monthly Installments).

One of the most striking features of a personal loan which separates it from a traditional lending instrument is the fact that a personal loan application requires minimum documentation from the borrower and thus arrives with the feature of getting approved in a matter of hours, thus making sure that you have the loan amount in your account when you need it the most.

But why should you consider a personal loan for your renovation project when you can apply for a home renovation loan with ease?

Well, taking out a personal loan, especially in the context of a home renovation project, has several advantages, and the most significant of them are as mentioned below.

1. Easy Eligibility

One of the first and most important aspects any borrower should check before indulging in a loan is the eligibility criteria the loan arrives with. As mentioned in the introduction paragraph, personal loans often require minimal documentation, meaning that you can get easily approved for them. Most lenders in India require you to be between the ages of 25 and 60 years, preferably a salaried employee, and have a good credit history to approve your application almost instantly. Along with this, if you are a self-employed professional, all you need to do is have your latest ITR files in order (upto the last 3 years) along with the latest 6 months bank statement in order to get approved.

With a good enough credit score (above 750 on a scale of 900), and the documents shared above, you can easily get approved for a personal loan, while the process for a home renovation loan is not so easy.

1. Simple and Efficient Application Process

One of the most common complaints of a traditional loan across India continues to be the fact that they have long application processes and approval times. Since most lenders in this domain rely on legacy technology to check your application, more often than not, you are required to wait for extended hours (running up to 1 to 4 business weeks) in order for your application to get approved and the loan amount subsequently arriving in your bank account.

On the other hand, most personal loans in India have a completely online application process meaning that you can apply for the loan right from the comfort of your home. All you need to have is a stable internet connection and electronic copies of all the documents you are required to submit, and you can file the application followed by subsequently getting approved in a matter of hours, and having the loan amount in your bank account in 48 hours or less.

1. Instant Disbursal

Along with a long and tiring application process, another constraint of a traditional loan lies in the fact that they often arrive with extended disbursal times. When you are planning on renovating your home, time is of the essence since you not only need to order a bunch of limited edition spares but also since the process is time-consuming, an hour saved here or there can go a long way in ensuring that your dream project bears fruit within the proposed deadline.

Most traditional loans in India take anywhere from 5 to 7 business days for the loan amount to be dispersed, and finally arrive to your account, and a home renovation loan from a conventional bank is no different.

On the other hand, most personal loans in India take a matter of hours to process your application and subsequently disbursing the amount to your bank account. For instance, Money View, which is a leading lender from Bangalore, provides a 100% assurance of you having the loan amount in your bank account in less than 24 hours post-approval.

The perks of instant disbursement go a long way, especially when you are planning to take a personal loan for renovating your home.

1. Flexible Repayment

Last but not least, one of the most striking features of a personal loan lies in the fact that they arrive with a flexible repayment plan. Essentially this translates into the fact that you can pay the lender a variable EMI on a monthly basis, and the loan amount and interest will be automatically adjusted. This feature is mostly absent from traditional loans since, in this case, the lender will pre-define both the EMI amount you are required to pay every month along with the date of repayment.

By extending this feature, not only do you stand to benefit from better management of your personal finances, but also less stress in the long run.

Important Points to Keep in Mind

Loan Eligibility Criteria

In order to get approved for a personal loan for renovating your home, the following eligibility criteria needs to be met.

• You must be between the ages of 21 years to 60 years.

• You must have your eKYC information present

• You must be a permanent resident of India

• You must be a salaried employee with a minimum monthly income of?13,500

• You must be a self-employed professional with a minimum monthly income of?20,000

• You must have a credit score of at least 600 on CIBIL and 750 on Experian, on a scale of 900.

Documents Required

You will need to present the following documents to the lender in order to get your application approved.

• Your eKYC documents including your PAN Card, Aadhar Card, Driving License, etc.

• Proof of residential address

• Proof of income

• Last 2 salary slips, 3 months bank statements, and income certificate in case you are a salaried individual.

• Last 3 salary slips, 6 months bank statements, and last 2 years ITR reports in case you are a self-employed professional.

• Your personal information as in your name, Aadhar linked phone number, and email address for official communication.

Conclusion:

Getting a personal loan for renovating your home comes with many advantages, not commonly found in a traditional loan. Thus, if you have been considering renovating your house for some time now, go and apply for a personal loan today to enjoy its many benefits. All the best.

In an ideal world, Saahil would spend all his days curled up with a novel. But he found the next best thing and is enjoying his stint as a content writer at Money View trying to help others understand the nuances of all things finance.