While a home loan finances your home purchase and allows you to realise your dream of becoming a homeowner, your home needs constant upkeep and care. Whether you need to address the needs of growing family, make your existing space more comfortable, or undertake major repairs, you are likely to need sufficient funds for home repair and maintenance. While using your savings is an option, you can take home renovation loan or home improvement loan and keep your savings intact while meeting your requirements with ease.
In this case, you can either apply for a Top Up Loan, which is offered over and above your existing home loan or get a personal loan that you can use as a home repair loan. However, before you choose one over the other, understand the difference between the two.
How is a Personal Loan different from a Top Up Loan?
A personal loan is an unsecured loan that you can use as a home improvement loan. Lenders usually allow you to borrow up to Rs. 25 lakh, which you can use to finance your home renovation costs. However, the drawback to this option is that the interest rates may be higher as this is a collateral-free loan, the eligibility criteria are more stringent, and the amount you are offered may be less substantial.
Additional Read: How to Finance your Home Renovation?
How to Use Home Repair Loans?
Whether you want to change the tiles across your home, repair the plumbing system or add a new wing in your house, you can use a top up loan for any type of home renovation and repairs.
Note some of the ways that you can use this type of home remodel loan:
- Give the floors a makeover by changing the tiles or replacing them with wood or bamboo flooring
- Repaint your interiors and exteriors or add wallpaper as an accent
- Add a garage for greater convenience
- Build a patio or backyard
- Convert a balcony into a covered space to enlarge an existing room
- Add a new wing or a mezzanine floor
- Remodel your kitchen or opt for a modular kitchen
- Add cabinets and modular cupboards to your living room and bedroom
- Change the furniture, upholstery, and soft furnishings
- Get new fixtures for the bathrooms or add a bathtub
- Repair a leaky roof or change the roofing completely
Salient Features of a Top Up Loan
Bajaj Finserv offers a top up loan over and above your existing home loan. You can use it to fund expenses related to repairs, renovation, improvement and expansion of your home. If you don’t have a Home Loan with Bajaj Finserv, you can apply for a Home Loan Balance Transfer to avail a top up loan. This way, you can not only benefit from easier repayment of your home loan with a longer tenor and a pocket-friendly interest rate, but also get a substantial top up loan on cost-effective terms.
Read on to know the prominent features of the Bajaj Finserv Top Up Loan.
- You can access a high-value sanction of up to Rs. 50 lakh that you can use to spruce up your home
- You pay a low interest rate, which reduces your total cost of borrowing and allows you to carry out repair or renovation without compromise or delay
- You don’t have to submit any extra documents for approval of this home renovation loan as your details are already in place
- Apart from funding renovation and repairs, you can use this loan to meet your other expenses to.
- You can access and monitor your loan transactions through an online account
- You can choose to foreclose and part-prepay your home remodel loan before the tenor ends at no extra cost
- You can use the top up loan calculator to calculate your EMIs beforehand and repay the loan via affordable EMIs stress-free
Is Home Improvement Loan Tax Deductible?
Just like a home loan, a home renovation loan also allows you to enjoy attractive tax benefits. You can claim tax exemption on the interest repayment. However, in order to claim a tax deduction, you need to have the necessary documents that prove that you have used the loan for repairs, renovation or expansion of your home. If you are able to prove this, you can claim a tax deduction of a maximum of Rs. 30,000 under Section 24(b) on the interest that you pay towards home remodel loans.
This amount is included in the total eligible deduction of Rs. 2 lakh that you can claim on a home loan. The limit of Rs. 30,000 only applies in case you renovate a self-occupied home. There is no limit on the maximum deduction if you renovate a let-out property.
How to Get a Home Remodel Loan?
You can apply for a Bajaj Finserv Top Up Loan for Home Improvement easily via an online application process. All you have to do is fill up a concise online form and submit it to initiate the process.
Additional Read: Home Decor Items for All Types of Home
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