Home Renovation Loan – Interest Rates, Eligibility, and Documents Required 2026

A home renovation loan helps homeowners finance repairs, upgrades and remodelling without using all their savings upfront. You can explore a secured home improvement loan, an unsecured personal loan or a top-up on an existing home loan, depending on your needs.

• Financing options: Choose from four common routes, including secured loans, personal loans, top-ups and loans against property.
• Eligibility: Income, property details, age, credit history and existing repayments influence approval.
• Repayment: Longer tenures can reduce monthly EMIs but increase the total interest payable.
• Tax benefits: Eligible renovation loan interest may qualify for deductions under Section 24(b), subject to conditions.

Before borrowing, estimate your renovation costs, compare financing options and choose an EMI that fits your monthly budget.

A home renovation loan, also called a home improvement loan, provides funds for repairs, upgrades and remodelling of a residential property. Unlike a standard home loan used to purchase or construct a property, a renovation loan finances improvements to an existing home or a property you are purchasing.

It is available in secured and unsecured forms, depending on the loan product, funding requirement and collateral.

For example, a homeowner in Pune planning to renovate a kitchen, repair bathrooms and replace flooring may need Rs. 8 lakh. Instead of using all their savings, they can compare a home loan top-up with other financing options and choose a repayment plan that suits their income.

The right financing option depends on the renovation cost, property ownership, existing loans and monthly repayment capacity.

A home renovation loan can cover painting, tiling, waterproofing, plumbing, kitchen upgrades, bathroom repairs and electrical work. Structural improvements and extensions may also qualify, subject to lender approval and property-related requirements.

The following table explains common eligible expenses and those not typically covered under renovation-specific financing.

A home improvement loan may have restrictions on eligible work, project timelines and fund usage. Confirm the permitted expenses with your lender before starting renovation work.

There are four common financing options for home renovation in India. Each has different collateral requirements, interest costs and repayment terms.

1. Home improvement loan (secured)

A secured home improvement loan uses an eligible residential property as collateral. Since the lender has security, interest rates may be lower than those on unsecured loans.

Secured financing can also offer longer repayment tenures, depending on the product and borrower eligibility.

However, you must provide property documents, and approval involves ownership and property-related checks. This option may suit substantial renovations, such as structural repairs or major remodelling.

2. Personal loan (unsecured)

An unsecured personal loan allows you to finance smaller renovations without providing property as collateral.

Processing may be faster because property valuation and mortgage-related checks are generally unnecessary. However, interest rates are often higher, and repayment tenures are usually shorter than those available with secured home financing.

This option may suit painting, fixture replacements or smaller kitchen improvements where the required amount is manageable.

3. Top-up on an existing home loan

If you already have a home loan with Bajaj Finance and have maintained a satisfactory repayment record, you can explore a top-up loan for additional funds.

A top-up may offer competitive rates and a simpler documentation process because some property and borrower details are already available.

If your existing loan is with another lender, you can consider transferring the outstanding balance to Bajaj Finance and applying for a top-up, subject to eligibility.

However, compare the revised EMI, total interest and transfer-related charges before making a decision.

4. Loan against property

A loan against property allows eligible property owners to borrow against a residential or commercial property.

It may be suitable for larger renovation requirements, including extensive repairs or extensions. The available amount depends on the property's valuation, income and repayment capacity.

However, the property serves as collateral. Failure to repay can result in recovery action against the secured property. Permitted use of funds also depends on the loan agreement.

For existing home loan borrowers, checking top-up eligibility can be a practical starting point. However, choose the option with the most suitable total repayment cost rather than focusing only on the monthly EMI.

The following interest rates apply to the Bajaj Finance home loan balance transfer and top-up facility.
 

These rates relate to the top-up facility and may differ from those for a standalone secured home improvement loan or personal loan.

A home renovation loan requires applicants to meet age, income, credit history and property-related requirements. Bajaj Finance also assesses your existing loan obligations and repayment capacity before approving eligible secured financing or a home loan top-up.

The following eligibility criteria apply to the home renovation financing information provided by Bajaj Finance.

The upper age limit is considered at the time of loan maturity. Criteria may differ for a balance transfer and top-up facility.

Your CIBIL Score is a three-digit measure of your credit history and repayment behaviour. A score of 725 or higher can support loan eligibility, although it does not guarantee approval.

For a top-up, your existing home loan repayment history and available borrowing capacity also matter.

Check your home loan eligibility to explore the amount you may qualify for.

A Bajaj Finance home loan top-up helps eligible borrowers finance repairs and upgrades without using all their savings. You can access funds with flexible repayment tenures and competitive interest rates. The funds can cover eligible expenses such as painting, waterproofing, kitchen upgrades, electrical work and structural improvements.

Existing Bajaj Finance borrowers may benefit from simpler documentation and convenient processing, as some details are already available. You can choose a repayment tenure that keeps your monthly equated monthly instalments (EMIs) manageable. However, a longer tenure increases total interest costs, so select one that suits your budget and repayment capacity.

To apply for a home improvement loan, you generally need the following documents. The exact requirements may vary based on your employment type and the selected loan product.

• Property documents: Sale deed or allotment letter, possession certificate and applicable society or builder NOC.
• Identity proof: PAN card, Aadhaar card, passport, voter ID or driving licence, as accepted.
• Address proof: Valid address proof, such as an electricity or water bill.
• Income proof: Recent salary slips and Form 16 for salaried applicants; Income Tax Returns (ITR), profit and loss statements and balance sheets for self-employed applicants.
• Bank statements: Bank account statements for the last 6 months.
• Photographs: Recent passport-size photographs, if required.
• Renovation documents: Contractor quotations, renovation cost estimates and applicable approvals.

Existing Bajaj Finance home loan borrowers may need fewer documents, as some records are already available. Additional verification or updated documents may still be required.

Your home renovation loan EMI depends on the borrowed amount, interest rate and repayment tenure. A longer tenure reduces the monthly instalment but generally increases the total interest paid.

Consider a salaried homeowner in Pune borrowing Rs. 8 lakh for kitchen remodelling, plumbing repairs and waterproofing. The following example assumes an interest rate of 9% p.a. over seven years.

The EMI formula is:

EMI = [P × R × (1 + R)^N] ÷ [(1 + R)^N − 1]

Where:

• P = Principal loan amount
• R = Monthly interest rate
• N = Number of monthly instalments

This example assumes a constant interest rate and excludes applicable fees and charges.

Use the home loan EMI calculator to compare borrowing amounts and repayment options before applying.

Interest paid on an eligible home renovation loan may qualify for a deduction under Section 24(b) of the Income Tax Act, 1961. However, the deduction depends on the property type, purpose of borrowing and chosen tax regime.

For a self-occupied property, interest on a loan used specifically for repairs, renewal or reconstruction is generally deductible up to Rs. 30,000 annually under the old tax regime.

The Rs. 2 lakh annual limit applies to qualifying loans used for acquiring or constructing a self-occupied property, subject to statutory conditions. It does not automatically apply to renovation expenses.

Under the new tax regime, the Section 24(b) interest deduction is generally unavailable for self-occupied properties.

For example, if you pay Rs. 45,000 in eligible renovation loan interest during a year, the deduction for a self-occupied property may be limited to Rs. 30,000 under the old regime.

A deduction reduces taxable income, not the interest charged by the lender. Maintain your loan agreement, interest certificates, contractor bills and renovation payment records to support your claim.

Follow these steps:

1. Visit the Bajaj Finance website and select the relevant home renovation loan or top-up financing option.
2. Click Check Eligibility or Apply to start your application.
3. Enter your registered mobile number and verify it using the one-time password (OTP).
4. Provide your personal, employment, income and existing loan details.
5. Enter the property details and required top-up amount.
6. Review the available offer, repayment tenure and applicable charges.
7. Submit your application and provide additional documents if requested.

To explore your renovation loan options, check your loan offer with Bajaj Finance and complete OTP verification.

Renovating your home should not require you to use all your savings or postpone essential repairs. Bajaj Finance offers eligible homeowners additional financing through home loan top-ups and balance transfer facilities.

With top-up amounts of up to Rs. 1 crore* or higher or higher, competitive interest rates and flexible repayment options, you can plan eligible improvements according to your requirements and repayment capacity.

Before choosing the loan amount, compare the renovation estimate, monthly EMI and total interest payable. If you already have a home loan, assess whether a top-up or balance transfer provides a suitable financing option.

Check your home loan offer with Bajaj Finance to explore your available borrowing options.