Renovating a home is an expensive matter. If you consider paying for the renovation from your savings, you can end up bursting all of it. Therefore, financial institutions have come up with an easy solution to all the financial stress. That is to provide a home renovation loan. A home renovation loan can be considered as a subcategory of a personal loan. As applying for a personal loan and home renovation loan is similar. A personal loan interest rate mechanism is followed throughout home renovation loans, as both of them are unsecured loans. To get a better understanding, here are some pros & cons of a home renovation loan: Pros Application Process The application process for a home renovation loan is easy, as it has been shifted online. So, you don't need to visit the lender's branch. However, to get the correct information on the loan amount and interest rates, and the requirement you can visit the branch initially, and then later, you can apply the form online. Multiple Usages There is no limitation on the usage of home renovation loans. Moreover, you can use the sanctioned amount to buy furniture, get walls painted, and many more. However, before applying for a loan, some lenders may ask you for a quotation from the vendors. So, before visiting the branch or applying online calculate the total cost you will require to renovate your home. Tax Benefits The most significant advantage of a home renovation loan is that an individual can take tax benefits on the interest amount paid. Cons High-Interest Rates Since it is an unsecured loan, the interest rates charged are higher as compared to a home loan. The interest rates are similar to personal loan interest rates. Age Bracket There is an age limit to apply for a home renovation loan. That is, if you are above the age of 60 you will find difficulty in applying for a loan. Good Credit Score To apply for any loan you need to have a good credit score, especially in the case of unsecured loans such as personal loans. Therefore, it is important to have a good credit score before applying for a home renovation loan. To know more about personal loans you can visit Bajaj Finserv’s website. Bajaj Finserv provides pre-approved offers to their existing customers, which saves processing time. Additional Read: Everything You Should Know About Home Improvement Loan
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AuthorAman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management. |