The end of February 2020 saw a growth of 17% in the personal loan segment and pushed its total valuation in the loan book to a whopping Rs.25.3 lakh crore. The steady growth of the financial product can be attributed to its multiple features and user-centric benefits. For instance, the flexibility to use the loan amount to meet any financial requirement, including funding home renovation and repair, works in its favor.
Regardless, individuals must familiarise themselves with factors pertaining to specific requirements and terms of usage to make the most of this personal credit. Thus, when availing a personal loan for home renovation, they must weigh in factors that influence the credit’s utility.
Things to check before availing of a home renovation credit
To begin with, individuals must make it a point to know about home improvement loans and all the requirements that accompany it to streamline their application. Subsequently, they should proceed to check these five things to make an informed decision about their choice of credit and lending institution.
- Decide a suitable loan amount
Before applying for a personal loan for home renovation, individuals must find out the amount of money that will be required to complete such renovation. The best way to do so is to make a list of things that need to be repaired or replaced and factor in their cost accordingly.
Subsequently, individuals should look for a lender who extends a substantial loan amount that would suffice their funding requirements for home renovation.
2. Check the eligibility criteria
Individuals must check their lender’s personal loan eligibility criteria before applying for the credit. It will help them understand the requirements they need to fulfill to avail the loan value. Running a check on eligibility requirements will ensure hassle-free processing of the application with reduced chances of rejection.
Typically, a personal loan for home renovation requires applicants to meet these essential criteria –
- Resident Indians who are between the age of 23 and 55 years.
- Should be an employee of an MNC, private or public company.
- Must earn a monthly income that matches the minimum threshold as specified by the lending institution for their city of residence.
- Should hold a credit score of not less than 750.
Notably, a lending institution may require applicants to meet additional criteria to avail a personal loan for home renovation.
3. Compare interest rates
Individuals should also check the rate of interest accompanying the loan option to compare the same with the prevailing rates offered by other lenders in the market. While at it, individuals should also find out about the additional charges to make an informed decision.
Also, they can look for financial institutions such as Bajaj Finserv, who extend a substantial loan value at attractive home improvement loan interest rates.
The lender also provides pre-approved offers to customers to make their experience of availing a loan seamless and time-saving. Such offers can be availed on multiple financial products like personal loans and business loans. You can check your pre-approved offer only with your name and contact number.
Notably, factors such as applicant’s credit history and repayment capability tend to influence the interest rate significantly. Consequently, applicants must get in touch with the lender directly to learn more about the interest rates and negotiate for better rates if they hold a high eligibility.
4. Check for the documents required
It is also recommended to know the important documents required to apply for a personal loan. Usually, financial institutions require individuals to submit these following to initiate the documentation and verification process –
- KYC documents
- Latest bank statements
- Proof of address
- Proof of income
- Passport size photographs
Lenders may also require applicants to submit additional documents to complete the verification process.
5. Analyze the loan repayment options
An individual’s repayment capability plays a vital role in availing and repaying the loan burden. This is why one must analyze the flexibility of repayment that accompanies a loan option. Typically, a personal credit for home renovation comes with a flexible repayment tenure of up to 60 months.
Depending on their income and repayment capability, applicants should thus choose a suitable loan tenor. They can utilize a loan EMI calculator to plan their personal loan EMI payment better.
Besides these five factors, individuals should also weigh in the loan approval process accompanying the funding option. It will help applicants to avail the required financial assistance in time as a personal loan for home renovation.