Everything You need to Know about Home Improvement Loan

Dev Singhraha

Relocation Expert

Buying a house begins a new exciting journey for the home owners. To keep the happiness of the house keeps going, at some point, one will thrive on getting some home improvement done. Be it due to personal needs and requirements or just a need to improve the changes in your house, is a financial burden too. The banks now offer loans for the same. Home improvement loans are not only an excellent option to get those changes done in the house, but they also have tax benefits.

We discuss everything you need to know about home improvement loan:

There is stiff competition among the loan lenders. To be the best in the market, they keep coming up with a new offer every day, trying to provide cheaper lending rates than the other. Most often, the lower price offered by another bank can compel you to switch your loan to another bank. Be mindful, that it is not an easy task.
If you are willing to change your loan lender to a new one, remember that the new lender will treat your application as a new loan lender. You will have to do all the process of applying for the loan as before. You will have to submit all the necessary documents, get all the permission all over again etc.
The new lender will also ask you to get a NOC from the old lender.
The processing fee is the part of the process which you will have to pay.
As the new loan lender will treat your application as a new loan application, they will send a person to inspect the house physically. They will also make sure that the loan you are applying for is necessary. For example, if you are applying for a loan that is of Rs 30 lacs and the person who has come for inspection concludes that you are applying for more loan than required, then they may reject your application.
The home improvement loan is not issued for properties that are 35 years old.
The highest limit for home improvement loan tenure is 15 years.

The home improvement loans generally have a floating rate of interest. But one can always negotiate with the loan lender and make it a fixed rate of interest. But remember that the bank has the freedom to increase your fixed rate of interest.

Under Section 24 of Income Tax Act, within the Rs 2 lacs deduction limit that a borrower gets to enjoy against the interest paid on home improvement loans, Rs 30,000 can be claimed as a deduction against the taxable income in that financial year.

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