Home Improvement Loans

Frequently asked questions

• Will I get a tax benefit on my home improvement loan? >

  Yes, you can get a deduction of up to Rs 30,000 per year on the EMIs of your home renovation loan under section 24B of the Income Tax Act.

• Can I repay my loan before the loan tenure? >

  Yes, you can close the home improvement loan before its tenure ends. This will help you save money on your interest and many lenders allow pre-closure of the home improvement loan without any penalties or nominal pre-closure charges.

• Can I buy new furniture with the home improvement loan? >

  Home improvement loans cover internal and external home renovations like painting, tiling, flooring, waterproofing, etc which are done to increase the value of the property. New furniture does not increase the value of the property and does not come under the improvement loan. Hence, you cannot buy furniture from a home improvement loan.

• Can I take a loan for my house renovation which will go on for 3 years? >

  No, you can only get a home improvement loan for the renovation provided the work is likely to be completed within a year.

• Can I apply for a home improvement loan if I have an existing home loan? >

  Both of these loans are short-term loans with pay-day loans typically due on your next payday cycle and have higher interest rates whereas same-day loans have a slighter longer repayment cycle with different terms and conditions.

• Does the government of India have any schemes or subsidies for home improvement loans? >

  Yes, the government offers subsidies and other benefits to the eligible borrowers of home improvement loans through schemes like Pradhan Mantri Awas Yojana and its Urban and Rural components.

• Are home improvement loans different from home loans? >

  Home improvement loans are generally of smaller amounts as compared to home loans and are purely used for renovation and repair purposes whereas home loans are used to buy and build a home.

• What happens if the renovation cost is less than the loan amount sanctioned? >

  If the actual renovation cost is less than the loan amount sanctioned by the lender, then the surplus amount remains with the borrower. Some lenders have certain policies for the utilisation of the sanctioned amount, so its best to check with the lender for his policies beforehand.

• Can I transfer my existing home improvement loan to another lender for more favourable terms and interest rates? >

  Yes, you can transfer your ongoing home improvement loan to another lender for favourable interest and terms through the process of balance transfer. However, do account for the cost associated with this process such as processing fee and prepayment penalty before making a decision.

• Can I include the architect or interior designer’s fee in my home improvement loan? >

  Yes, you can include professional fees or other consultancy charges like fees of interior designers or architects/engineers in your home improvement loan.