In addition to ensuring a high quality of living, clean surroundings, and a healthy life, routine maintenance and periodic renovations ensure a healthy valuation for your property.
When you buy a house, you take on the responsibility of maintaining it for the rest of your life. In addition to ensuring a high quality of living, tidy surroundings, and a healthy life, routine maintenance and periodic renovations ensure a healthy valuation for your property. It protects the property from normal wear and tear, thereby extending its useful life. In addition, renovation has the potential to give the property a more modern appearance and atmosphere.
Funding options for home renovation
The maintenance of a dedicated recurring deposit (RD), in which you save a predetermined amount on a regular basis in preparation for meeting this expense at some point in the future, is one of the most effective methods for financing home improvements.
This relieves the pressure of a very large expenditure. Borrowing money from the bank is yet another choice you have. If you have a significant need for cash, you can get in touch with one of the many banks that provides loans specifically for home improvement projects. You also have the option of applying for a personal loan if the amount you need is less than $10,000.
You have the option of taking out a top-up loan home loan even if you are currently making payments on another mortgage. Checking the eligibility requirements, interest rate, and associated fees of various types of loans and comparing them to one's own requirements is the most effective way to determine which kind of loan is right for one's financial situation.
Eligibility Criteria and loan terms
The following are the qualifications necessary to obtain a loan for the purpose of home improvement or renovation:
Home improvement loan
It is recommended that salaried individuals do not borrow more than two times their total annual salary when applying for a loan. The maximum amount of the loan is equal to up to two times the applicant's annual net income (based on the average of the applicant's income over the past three years), plus any depreciation that was claimed in their individual capacity.
For the equitable mortgage, the borrower is responsible for paying a margin equal to 25 percent of the total estimated cost of renovation, which includes the cost of furniture, repair, extension, furnishing and fittings, as well as the stamp duty.
A mortgage was taken out on the property as a form of security
Typically, a loan for home improvements has a maximum repayment term of ten years.
Home mortgage top-up loan
The maximum amount of money that can be borrowed is equal to 80 percent of the current market value of the home if the loan is for less than 75 thousand rupees, and 75 percent of the market value if the loan is for more than 75 thousand rupees. The currently outstanding balance of the home loan is also reduced in comparison to the maximum amount that is allowed.
The borrower must have a positive repayment history over the previous year.
The borrower's mortgage must be in favour of the bank.
Loan comparison
It is better to check the loan interest price with major banks like SBI, ICICI, Axis Bank, HDFC Bank and go for the better loan interest rates.
What’s your best option?
If you are already making payments on a home loan, getting a top-up loan for your mortgage is unquestionably the smartest financial move you can make in order to pay for home improvements. The application process is straightforward, and the interest rate is more affordable compared to that of other loan alternatives. If you do not currently have a home loan, another option available to you is a loan for home improvements (also known as a loan against property). The interest rate on this type of loan is also not excessively high, and the repayment period can be extended to a maximum of ten years if you so choose.
A personal loan is an option to consider if you do not wish to put the property up as collateral and the amount of money you need is not excessive (for example, up to two lakh rupees).
Nevertheless, it is a good idea to carefully plan out your expenses and to save your own money so that you can pay for them when they come up. As a result, the best way to reduce the strain on your finances is to put money aside over a prolonged period of time using an RD and always keep getting loans as a backup plan.
