DIY : Do your Home Work Well, before Applying for Home Improvement Loan
Only owning a house is not sufficient until it looks very attractive and has all the minimum required facilities. Just as the cost of purchasing a new house is not small, the cost of carrying out improvement or renovation works in your house is not very small.
If you are a home loan borrower and paying off your EMIs on time, you will be easily offered a home improvement loan by the lender from where you have availed your home loan.
Taking a home improvement loan is very easy, especially for those who have never delayed in the payment of their home loan EMIs. Still you must think twice before applying for home improvement loan as it will be a debt for you.
Apply for it, if you really need an improvement in your home
If you really require a renovation or improvement in your existing home, then only should you apply for it. First of all calculate the funds required to carry out the improvement funds and check out whether you really need a loan.
Use your surplus funds in place of home improvement loan
You should first use the surplus funds available with you to carry out any home improvement work. In case, you find that the readily available fund in hand is not sufficient for renovating your home, you may go forward to apply for home improvement loan.
You will get Tax Benefits
Do remember that the amount taken as loan from the bank for home improvement also qualifies for income tax benefits. So do not forget to tax income tax rebate against this loan amount.
The maximum tax rebate allowed in the principal repayment and interest repayment is Rs1.50 lakhs and Rs2 lakhs, respectively.
Prefer Credit Card for very short term home improvement fund requirement
You can make use of your credit card for very short term home improvement fund requirement as in case of credit card, you can get credit for 30 to 45 days without any interest. So avoid getting home improvement loan for very short tenure instead go for using credit card.
Check your Credit Score
Before applying for home improvement loan, check your current credit score. This will give you power to negotiate with the bank over terms & conditions as well as on interest rate in your favour.
Take Home Improvement Loan based on your repaying capacity
This point must always be remembered that you should take that much loan which you are capable of repaying easily after taking into consideration of all your monthly expenses. You should never go for applying for a loan which is beyond your repaying capacity because anyways it is a debt that you will need to pay in future.