3 Types of Home Renovation Loans You Can Take in India

3 Types of Home Renovation Loans You Can Take in India

Modern homes are much more than just a cozy little space with adequate aesthetics. If you want a home with a décor that truly matches the year on the calendar, you will need to step up your renovation plans.   

Think beyond than just a painting project; look out for stylised lighting, smart gadgets, and modern interiors.   However, making this plan a reality will cost you a great deal. A typical homeowner might take months or even years to collect savings fit for such home renovations.   

A better way to approach such a significant house makeover would be to apply for a Home Renovation Loan. Whether you want to transform your home into a modern masterpiece or restore it, there are many loans available in the market to fund your needs.  

Here is a quick look at 3 types of loans for home renovations and improvements, to help you pick one that best suits you.  

Personal loans

  A personal loan could be used to fund any personal need, including your home renovation needs. Unlike other forms of home renovation loans, it’s an unsecured loan.   

You do not require pledging a personal asset as collateral, so there’s less risk associated with them. Both banks and financial institutions offer some of the best personal loan options.

You could then choose to use the loan as you please without revealing to the lender how exactly you intend to spend the loan amount.    Personal loan approvals are quick too, as they do not need much documentation. You can also apply for them online. All you need is a good credit score and a regular monthly income to get a low-interest personal loan.  

Home Loan

  Banks and financial institutions also offer a specific type of loan called a home improvement loan to finance home renovations. This loan is given to the registered owner of the property.   

Typically, the lender funds up to 80% of the renovation costs based on the work estimate you submit to them when applying for the loan. Unlike personal loans, where you don’t need to specify how you plan to use the funds, with a home improvement loan you might have to submit a plan with a proposed quotation from a senior architect.   

Additionally, you may have to submit some documents when applying for the loan. Nevertheless, this loan comes with the benefit of tax exemption under Section 24(b) of the Income Tax Act, where you can claim deductions on the interest paid.  

Top-up loan 

  If you already have an existing home loan, you can take a top-up loan over and above to renovate your home further.   

However, there is a criterion that you can only take this loan after a certain number of years once your home loan has been sanctioned. Taking this loan through your existing loan avoids the hassle of applying and maintaining multiple loans.   

Additionally, it also speeds up the loan availing process as the lender already has your documents. A top-up loan is also eligible for tax benefits under Section 24(b) of the Income Tax Act.   You can also use EMI calculator to check out which EMI option best suits your needs.  


  Each of the loans mentioned above can help you fund your home renovation but they all differ in nature. Consider their features to pick the one that best suits you.   

While a top-up loan might be better if you already have an existing loan, a home improvement loan might be a good choice if you’re looking for a long-term loan that funds maximum costs. However, a personal loan is also a good choice as it much easier to avail.


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