Renovating a home might be less important than buying a new one, but only slightly. Renovating a house or flat is needed for more than one purpose. First, it preserves and enhances the life/value of a dwelling unit. Two, it offers satisfaction to the residents who can make their lief a little more comfortable and aesthetic through renovation of the home.
But renovation needs money and it might not be readily available in the form of cash in hand. What would you do if you are in need of renovation but stuck in the absence of ready surplus funds? Let’s find out.
Personal loans
One can always take a personal loan to fund renovation. Personal loans can be quickly taken, needs no collateral and carry no condition on the end use of funds. But they bear higher interest rates compared to home-related loans.
If a person owns any property, he/she can easily offer it as collateral to secure a loan with a far lower interest rate than a personal loan. These are called loans against property and one can borrow a bigger amount, which can be utilised for renovation purpose.
Topping up home loan
Since home loans are often taken for long periods like 20 or 25 years or even more. Therefore, it might so happen that a person who is already servicing a home loan needs to undertake renovation. These borrowers can also think of topping up their loans and use the new funds for renovation. This rate of interest will be far lower than that of personal loans.
Points to note
As in the case of any other loan, the applicant should only take loan for the minimum amount in order to minimise the EMI. One should consult vendors to get a fair idea of the costs involved, and if necessary, prioritise the expenditure and proceed accordingly.
Explore lenders for rates
One has to compare between lenders for best rates and terms and conditions. Rushing to the nearest institution can eventually end up extracting a lot of extra payments that could have been avoided.
Though it often takes a backseat compared to home loans which are for buying property, renovating old homes is one of the unspoken needs of many and can be explored by lenders more aggressively. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
