According to a study, personal loan grew at a rate of 20.4% between February 2017 and February 2018. In between 2015 and 2018, the unsecured credits grew at a CAGR of 27% in the lending market.
Since personal loans do not come with end-use restrictions, one can use the same for multiple purposes, be it financing a child’s education, family vacation, or wedding expenses.
Additionally, individuals who want to improve their home’s condition can avail a home improvement loan. Apart from no end-use restrictions, these personal loans sport several other benefits as well.
Why choose personal loans for home improvement?
Home improvements are not limited to just renovating old houses, but also involve several functional modifications as well. Such alterations are expensive, which one can arrange by applying for a personal loan.
With such loans, one can avail up to Rs.25 lakh, which can be used to fund various home upgrades. One of the reasons to get such loans is the significant loan amount available to an individual without hypothecating any assets.
Several financial companies offer customers the flexibility to choose from a range of tenors. In case of unsecured loans like these, the tenor can extend up to 60 months. However, borrowers must find the right personal loan tenor to enjoy an optimum repayment experience.
Individuals looking for funds to upgrade their homes should choose a tenor by considering the following factors
- Assessing financial prospects
- Calculating all incomes for a month
- Determining financial obligations
With the flexibility in tenor to choose from, borrowers will be able to avail and repay the loan without straining their finances unnecessarily.
Competitive interest rate
Individuals can acquire credit at competitive personal loan interest rates, which make the loan feasible for customers. Those who wish to improve their home’s condition can use the loan amount comfortably and repay later. Moreover, the affordable rates make the total cost of loan lower, which is beneficial.
Easy documentation process
It is easier getting such an unsecured home improvement loan as the documentation process is minimal. Borrowers need to produce the following documents to complete the loan application procedure.
For salaried individuals
- KYC documents such as Aadhaar card, Passport, Voter ID, PAN, etc.
- Employee ID card
- Salary slips for the previous 2 months
- Financial statement of salary account for the last 3 months
Simpler eligibility conditions
For salaried individuals
- Must be an Indian resident
- A salaried employee from an MNC, private, or public organization
- Minimum salary depends upon the lender and the city of residence.
Amongst these, financial institutions closely check CIBIL score for applicants, which should be above 750 to get loan approval. With these easy to qualify eligibility criteria, it is easier to avail loans by individuals for home improvement.
One of the many reasons for choosing personal loans for home improvement is because they are easily accessible. Financial institutions accept online as well as offline mode of loan applications. Besides, the personal loan verification process starts immediately, and the loan amount can be disbursed within 24 hours. Hence, one can start their home upgrades immediately with such loans.
Further, financial organisations like Bajaj Finserv make the loan application procedure simple for customers by facilitating them with pre-approved offers. Such offers are available on several financial products like personal loans, business loans, etc. Customers can check pre-approved offers instantly by inputting their names and contact number.
Firstly, personal loans availed from authentic financial institutions are not taxable as they do not make a part of one’s income. Secondly, as per Section 80C, tax exemption of up to Rs. 1.5 lakh can be availed on the principle amount of personal loans if the amount is used for home improvement.
Thus, one can avail tax benefits on personal loans if they use the money to upgrade their home. This makes personal loans a preferable option for individuals who are seeking funds for home improvement.
With such reasons in place, unsecured home improvement loans can be more beneficial for customers. They can get tax exemptions and choose a viable credit option. Moreover, individuals can take the help of EMI calculators to determine feasible loan repayment options as they choose a tenor, which suits their financial standing.