A home is the pride of the homeowner. With Home Renovation Loan you can upgrade your home easily without paying a high-interest rate. You can opt for lower EMI with longer tenure thereby making Home Renovation Loan far more affordable than Personal Loan.
A home renovation loan can be availed to reshape and modernize your home. Home improvements, such as kitchen developments and extra rooms or even an extra floor, all enhance a home. The development comprises of change for the current structure of the home to include additional room, for example, building another room, a story, or inserting a gallery. While a home loan empowers you to own a home, a home renovation loan is intended for improving the home that you effectively own.
Benefits of Home Renovation Loan:
- Lower Interest Rate than Personal Loan: One of the greatest benefits of a home renovation loan is a lower and fixed rate of interest. With a Personal Loan, you pay the higher loan rate if interest & fee. You can save a major amount of money.
- Less Documentation: If you have availed the loan on a lower rate of interest for a more extended period, your EMIs will be of a lower amount. You will pay a lower EMI consistently when compared with getting a loan on a higher rate of interest. If you are a salaried individual with a limited source of income, getting a loan at a lower rate of interest with the lowest EMI will be a blessing for you.
- Lower EMIs: If you have availed the loan on a lower rate of interest for a more extended period, your EMIs will be of a lower amount. You will pay a lower EMI consistently when compared with getting a loan on a higher rate of interest. If you are a salaried individual with a limited source of income, getting a loan at a lower rate of interest with the lowest EMI will be a blessing for you.
- Long Tenure: Home renovation loans generally come for a long tenure period which ranges from five to fifteen years which makes the repayment easier for the borrowers.
Tax Benefit of Home Renovation Loan:
People who buy or build a house can benefit tax deduction. It additionally incorporates loans taken for fix work as well as the renovation of the house. However, luxury things, for example, chimneys or a pool generally not qualified for a tax deduction. Under Section 24 of the Indian Income Tax Act, the interest payable on home renovation loan is tax-deductible for up to Rs 30,000 every year.
In this way, if you are paying the home loan and also availing the tax benefit then the total tax deduction would account to ₹ 1,50,000 for both the interest paid on home loan as well as a home renovation loan. If the interest on a home loan is ₹ 1,20,000 or less per year then the maximum benefit would be ₹ 30,000 on home renovation loan will be applicable.
It is to be noticed that one can’t avail of any tax benefits on the principal amount of the house improvement loan under section 80 C of the Income Tax Act which gives some provision for a tax deduction in the case of home loans.
Eligibility for Home Renovation Loan:
- It can be applied individually or jointly with another owner of the house.
- Both salaried and self-employed can apply for it.
- The minimum age requirement should be 21 years of age however maximum age is limited to the retirement age.
- All the owners of the property will have to be co-applicants for the loan.
- Application form with latest passport size photograph
- Bank statements for the last 6 months
- IT/ITAO documents
- Original title deeds of the property.
- A quotation from your architect on the estimated cost of renovation.
- Address proof and KYC documents.
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