Buying a home is one responsibility, and maintaining it is another. Homes need upgrades to maintain their visual appeal and increase their comfort level. Investments in real estate, whether it is about buying a home, giving it a modern look, extending it to accommodate the growing family or improving it for a better living space, come with a significant expenditure. Understanding the varied financial needs of different customers, lending institutions provide home loans, like home renovation loans.
A home loan is a generic term for avail a home loan for purchasing or constructing a property. These loans can be used to buy land, constructed property or apartment, the extension of a house, etc. Customers can take a loan depending on the exact need and fund that particular need. Two loans that fall under the category of home loans are Home Renovation Loans and Home Extension Loans.
About Home Extension Loan
A home extension loan is a loan specifically for home extension purposes. It is an ideal choice for homeowners who wish to extend their homes as they can utilise the space in the existing house without employing funds from their pockets. As the family grows or children in the family grow older, there can be a space issue. Shifting to a new bigger place is only an option for some. Therefore, individuals can apply for a home extension loan for a home extension.
Features and Benefits of Home Extension Loan
- Easily Available: Customers can follow a straightforward online process to apply for a home extension loan and receive the amount. The entire application process can be completed digitally.
- Convenient Repayment: Home extension loans are available with flexible loan tenure, making them convenient to repay in small EMIs.
- Avoid Huge Costs of Shifting: Shifting to a new house can be expensive. On the other hand, using a home extension loan, adding a floor or a room to the existing home can help individuals meet their living space requirements with greater convenience.
About Home Renovation Loan
Home improvements are required from time to time to maintain its good condition, and it adds to a comfortable living style. Homeowners can apply for a home renovation loan. It is also called a home improvement loan and can fund repairs, remodelling, painting, and even construction work such as adding a floor. Whether homeowners want to remodel their kitchen or design study room for their children, a home renovation loan can be beneficial.
Features and Benefits of Home Renovation Loan
Leading banks offer home renovation loans at a low-interest rate against minimal documentation following an easy online application process.
- Loan Amount: The loan amount can be up to 90% of the fund requirement for home repair.
- Long Loan Tenure: Home Improvement Loans can have a long tenure. Maximum loan tenure is 15 years. It is flexible enough to repay the loan EMIs conveniently.
- Ownership Type: These loans can be availed of as joint loans with co-owners.
- Low-rate Financing Option: Banks offer these loans at a low-interest rate, depending on the applicant’s credit profile and nature of employment.
- Minimal Processing Fee: Leading banks charge around 0.5% of the total loan amount as home loan processing fees.
To get the right loan amount and choose a suitable loan tenure for a convenient repayment schedule, customers can use a home loan emi calculator – kotak.
Key Differentiating Points – Home Renovation vs Extension Loan
Rebuilding and Structural Changes
Home renovation loan seekers often aim to give a new look to their homes without structural changes. On the other hand, home extension loans are utilised by homeowners to fund structural changing costs as the homeowner builds the extended part for the first time. Structural changes can include adding a room, washroom, balcony, connecting two floors, etc.
The Flexibility of a Personal Loan
Borrowers can take up and use home renovation loans as personal loans and use the loan amount per their requirements for flooring, ceiling repair, waterproofing, etc. On the other hand, a home extension loan is primarily sanctioned for specific construction work and extending living space in a house.
This way, home loans can help customers bear massive home repair and construction costs. Hold all necessary documents and maintain a good credit score for a smooth online application process and fast approval.
