Home improvement can be expensive. Everyone may not be able to afford a home renovation as per their wish. And if it is urgent, you may not want to delay it till the next salary increment. Whether you want to replace old furniture in your hall, remodel your kitchen, need new fixtures and fittings, or even change electrical wiring, the renovation can be easy with home improvement loans. No need to not use your savings or withdraw your investments prematurely for your home renovation…simply apply for a home renovation loan that comes at affordable interest rates.
Unsecured home improvement loans are personal loans without collateral. Let us find important things about these loans that an individual should know.
Important Things about Unsecured Home Renovation Loans
- Home Improvement Loans can offer a high amount of credit.
Lenders can offer as much as Rs.25 lakhs for your home improvement personal loan application. It makes most individuals get a personal loan to meet various types of expenses involved in home renovation. The lender will credit the loan amount soon after loan approval. Your loan eligibility, as per the lender’s terms and conditions, will decide the loan amount.
- Unsecured loans need good credit.
Financial institutions can offer the best loan based on your financial standing and credit behavior. Home improvement personal loans are easy to apply against minimal documentation and easy to meet eligibility criteria. One of these is a credit score. If you have maintained a good credit score, ideally 750+, you can finance a host of purchases for remodeling, interior change and costly repairs to your home with a high loan amount. Since the lender provides you with the required funds without any collateral, they ask for a high credit score to determine your credit behavior towards your previous loans or debts.
- Unsecured Home Improvement Loans are short-term loans.
When you realize ‘I need a personal loan’ for home renovation, you should consider applying for a suitable loan tenure to increase loan approval chances. Home renovation unsecured loans are offered for a shorter term than home or property loans. You can get a loan for 12-60 months tenure from leading non-banking financial companies (NBFCs).
Also Read : Top 10 Myths About Loan Against Property
- Home Improvement Loans do not pledge your home.
One of the advantages of unsecured home improvement loans is that these loans do not pledge your home. In the case of a home loan or property loan, lenders treat your home or property as a mortgaged asset. You are free from such worries in case of a home renovation loan. You just need to provide documents to obtain home renovation or improvement loans.
- The income requirement is predefined.
Lending institutions verify your employment and income history to ensure that you can repay the borrowed funds conveniently and timely. You should have a steady income. Salaried individuals residing in Mumbai or Delhi should earn Rs.25,000 per month. For other states’ residents, the limit is Rs.20,000 per month. For self-employed persons, the annual turnover differs depending on the respective industry.
- Your debt-to-income ratio (DTI) is considered.
Lenders also check your current debts using the debt-to-income ratio (DTI) – a metric to assess your current debts. It is based on all your monthly debts concerning your credit cards, mortgages, etc., and your income. Lenders prefer a lower percentage (maximum 40%) for your DTI. Therefore, you should maintain a low DTI and increase your income for quick personal loan approval. Use your credit limit up to the maximum limit of 30% to keep your DTI low.
- Personal Loans for Renovation are quick to obtain.
Technology has simplified loan processing. The documentation process is hassle-free, online and smooth. Quick disbursal is possible as leading NBFCs follow a 100% paperless application process. The seamless application process and quick fund disbursal allow you to start your home renovation projects soon.
Thus, if you need to carry out much-needed repairs or improve your home’s aesthetic appeal or want to spice things up a little, you need not worry about costs. Whenever you realize ‘I need a personal loan’, find an NBFC and apply online. Unsecured loans are an effective option for home improvements without dipping into your savings.