Can I Finance My Home Renovation with a Home Loan

Planning a home renovation? From renovation loans to top-up loans on your existing home loan, here is how to choose the smartest financing option for your needs.
Home Loan
2 min
30 January 2025

Home renovations are exciting but can be expensive. Whether you want to redo your kitchen, upgrade your flooring, or carry out major repairs, the cost can run into lakhs. The big question is: Can you get a home loan for renovation?

The simple answer is yes. There are multiple ways to fund a renovation. Some people opt for a home renovation loan, which is designed specifically for such expenses. Others go for a personal loan—quick and easy to get but often more expensive due to higher interest rates. Some even use their credit cards for smaller upgrades, though this can turn costly if not paid off quickly.

But if you are already repaying a home loan, you have a much smarter alternative—a top-up loan. Instead of taking a separate loan, you can simply borrow extra funds on your existing home loan.

And what if your home loan is with another lender? That is where a home loan balance transfer can help. By shifting your loan to Bajaj Housing Finance, you not only get better loan terms but also the option to avail a top-up loan to cover your renovation costs.

This option gives you higher loan amounts, lower interest rates, and easier repayment than a standalone renovation loan or personal loan.

What is a top-up loan for home renovation?

A top-up loan is an additional loan amount that you can borrow on top of your existing home loan. It allows you to finance home renovations without applying for a new loan. Since it is linked to your home loan, it comes with lower interest rates and longer repayment tenure.

If you have an ongoing home loan, you can apply for a top-up loan with your current lender. But if your loan is with another bank or NBFC, you can transfer your home loan to Bajaj Housing Finance and get a top-up loan for renovations.

Who can apply for a top-up loan?

If you already have a home loan, you can apply for a top-up loan, provided you meet these conditions:

  • Your existing loan repayment history should be good.
  • Your outstanding loan amount should be within the lender’s Loan-to-Value (LTV) ratio.
  • You must meet the lender’s income and credit score requirements.

When should you consider a home loan balance transfer with a top-up loan?

If you are repaying a home loan with another lender and need funds for renovation, transferring your loan to Bajaj Housing Finance with a top-up loan can be beneficial in these situations:

  • Your current home loan interest rate is high. A balance transfer will help reduce EMIs.
  • You need extra funds for renovation. Instead of applying for a separate loan, a top-up loan provides additional money at a lower interest rate.
  • You want better loan terms. A balance transfer can help you get better tenure and repayment flexibility.
  • You want tax benefits. Interest paid on a top-up loan for renovation is eligible for deductions under tax laws.

Are there alternatives to a top-up loan?

If you do not qualify for a top-up loan, here are other ways to finance your home renovation:

  • Personal loan – This is an option but comes with higher interest rates and shorter tenures.
  • Credit Cards – You can utilise your cards for minor home renovations.
  • Government schemes – Certain government programs provide low-cost home improvement loans, but eligibility criteria apply.

Among all these options, a top-up loan remains the most cost-effective choice if you already have a home loan.

Benefits of Bajaj Housing Finance Home Loan Balance Transfer & Top-up

Here are a few benefits of opting for Bajaj Housing Finance Home Loan Balance Transfer & Top-up Loan:

  • High top-up loan amount: Transfer your existing home loan to Bajaj Housing Finance and enjoy a top-up loan of Rs. 1 crore* or higher to cover your remodelling expenses.
  • Low interest rates: Benefit from affordable interest rates starting at just 8.30%* p.a., keeping your EMIs low.
  • Convenient repayment tenure: Enjoy a flexible repayment period of up to 32 years, ensuring your EMIs remain affordable and manageable.
  • Easy process: Our home loan balance transfer process is simple, with minimal paperwork required for a quick and smooth experience.

Make the smart move and upgrade your house by selecting a home loan top-up to maximise your savings right now.

Frequently asked questions

Do we get a home loan for renovation?
Yes, home loans for renovation are available. You can either apply for a home renovation loan or opt for a top-up loan on your existing home loan. These options provide funds for upgrading, repairing, or expanding your home at competitive interest rates.

Is a loan taken for renovation of a house eligible under section 80C?
No, loans taken for home renovations are not eligible for tax deductions under Section 80C. However, interest paid on a renovation loan may be eligible for deduction under Section 24(b), subject to certain conditions, if the loan is secured by the property.

Which loan is best for renovation?
The best loan for renovation depends on your financial situation. A top-up loan on an existing home loan often offers lower interest rates and longer repayment periods. Personal loans and renovation loans are also viable, but they typically come with higher interest rates and shorter tenures.

What types of home loans are available for renovation purposes?
Home loans for renovation typically include home improvement loans, top-up loans on existing home loans, and personal loans. Home improvement loans are specifically designed for renovation expenses, while top-up loans allow additional borrowing on your current home loan with lower interest rates and longer tenures.

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