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HomeLoansIs Renovating Home with Personal Loan is a Good Idea?

Is Renovating Home with Personal Loan is a Good Idea?

At the time when we think about home renovation/improvement, the first thing that comes to mind is the required money. And multiple questions like – How will you arrange that money? Do we have that fund for the renovation? Can we avail/borrow personal loans from any of the banks to carry out the renovation work?

So, if you want to renovate your home and want to make essential repairs/ maintenance work with enhancing your comfort in the home.

There are things that you can do with your home to greatly improve your appearance without spending too much money, such as adding glass closet doors and glass room dividers.

These fancy details can be the difference between potential buyers making a bid or looking elsewhere.

So, these things can come with substantial financial expenses. And for fulfilling these expenses without any compromise, you should consider applying for a home renovation loan personal loan. Here we are describing how renovating your home can add value.

Home Renovation with collateral-free Loan:

We know for availing of home improvement, or renovation loans are required to give our home property as collateral. But, in case we are availing personal loan then we have not supposed to provide anything as collateral.

In case we fail to pay the EMIs of the home renovation loan on time, the lender will eventually foreclose the loan and cease our collateral property. Also, the lender has all the rights to sell that collateral property to get its borrowed money back as we have given that property as collateral.

In that case, our collateral property is at risk every time in a home loan or loan against property. But, in a personal loan for home renovation, we will face different circumstances if we fail to pay the loan EMI that will affect our credit score and this is far better than losing your property and getting ceased. Here we are not supporting defaulting on any kind of loan also this is not a good option, but as we all know in personal loans our property is at a lower risk.

You May Like to Read: Home Loan EMIs

2. Lesser Amount to be Paid as Interest:  

As we know that interest rates are higher on personal loans, but still we have to pay a lesser amount in personal loans as interest. Here in home renovation, you will get the amount maximum for 5 years, but if you will avail housing finance or a top-up amount for the home renovation then you will get that loan period tenure for 10-20 years depending upon the tenure of your home loan.

3. You can Avail as much as you want:

On a personal loan, you can avail as much amount as you want for your home renovation. Here, the limit is in accordance with your monthly salary but does not depend upon the property’s value.

You can avail of a lower amount or a higher amount as a loan in a personal loan for home renovation. There is no limit for some categories, despite your creditworthiness. So, you can avail of a personal loan for home renovation as per your requirements. If you want to borrow a smaller amount you can avail of that as well.

You May Like to Read: Difference between Personal Loan and Home Loan

4. Be Debt-Free Sooner and Get Relaxed:

If you are not availing of a personal loan for maximum duration and borrowing it for just two years or three years you will get debt free soon. Besides, if you will borrow any home improvement loan you will avail of it for a longer period, which will increase your financial liability and debt tenure for a longer period.

5. No Need for Property Verification as Collateral:

If you are thinking to borrow a home improvement loan or a home loan or loan against a property then you are required to get your property verified before availing of that loan. In this case, the bank executive will visit personally to verify that property.

But, in a personal loan for home renovation or home improvement, you are not supposed to get any verification done for your property because a personal loan is an unsecured loan.

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