Unlike other assets, your home is subject to wear and tear, and extensive repairs are unavoidable. Whether it’s repairs or makeovers, the charges are high. The solution is a home improvement loan.
To know more about home improvement loans, read on.
Home Improvement Loan Explained
Opt for home improvement loans to modify your home, whether big or small. Home improvement loans can help you take care of several expenses:
Fixing leaking ceilings
Painting your house
Making structural changes
Purchase furniture and fixtures
Buy gadgets like air conditioners, geysers, or fans
Eligibility Conditions for Home Improvement Loans
Eligibility conditions differ from lender to lender, but here are some basic criteria that you need to fulfil:
Age: Applicants need to be between 21 and 65 years of age
Employment Status: Professional or self-employed
Credit Score: You need a CIBIL score of at least 611
Income: Form 16 for the last three years for salaried individuals and last three years ITR for self
You can check your eligibility for a home improvement loan using the loan eligibility calculator. Enter the different data into this calculator: Net Monthly Income, Loan Tenure, Other Existing EMIs, and ROI (Rate of Interest). You get the maximum amount of home loan you can apply for.
Home Improvement Loan Application Process
Once you are eligible for a home improvement loan, the next step is the application process. The information that you need to enter into the online application is as follows:
Educational Qualifications Monthly/Annual Income
You may need to provide your PAN card or Aadhar Card details and the above employment, personal, and financial information.
After filling in the application form, you must upload the required documents. Here are the documents required for salaried and selfemployed individuals:
The following documents are needed:
Age, residence, and identity proof (KYC) that includes PAN card, Aadhar card, and Voter ID card
Approved Plan and Title Documents of the property
Last two years, Form 16
Completed application form
Bank Statement for the last six months
Self Employed Individuals
For self-employed individuals, the documents required are:
Age, residence, and identity proof (KYC), including PAN card, Aadhar card, and Voter ID card
Business Existence Proof, including certification
Income Tax return for both business and individual for the last three years. Chartered accountant certified/audited books of accounts including Profit & Loss Account and Balance Sheet
Bank account statement for the previous year
Approved plan and Title Deed copies
After uploading the documents, you must pay the home improvement loan processing fees. This could be up to 1% of the loan amount.
Documents provided as identity and address proof will be verified. This could take around two days and helps determine the borrower’s repayment capacity along with the eligibility criteria.
Approval of Loan
At this stage, you will receive an offer letter from the bank quoting the terms and conditions of the loan. This letter will also have information about the total loan sanctioned and the repayment duration. You need to accept the offer from the bank to proceed to the next step.
Processing Fee Payment
Once you have accepted the terms of the bank, you need to pay the processing fee for the home improvement loan. This fee covers the processing and administrative costs.
After all the documents are verified, and the processing fee is paid, the final step of the process is the disbursal of your loan. This usually takes 3 to 5 working days.
The application process for a home loan for renovation is simple. Make sure you have all the required documents, determine the EMI based on the EMI online calculator, and fulfil the eligibility criteria. Apply for a home improvement loan today!