Banks provide loan to upgrade old house; know eligibility, tax exemption and interest rates

Banks and NBFCs offer specialized loans to cover home improvements. Whether you want to transform your old house or renovate it, this loan helps reduce the cost.

Renovation loans are widely available, offered by banks, NBFCs, and HFCs. They can be used for various home improvement projects like kitchen or bathroom remodeling, adding rooms, enhancing plumbing and electrical systems, and improving energy efficiency.

Loan Amount: For home renovation, personal loans up to Rs 5 lakh and renovation loans up to Rs 25 lakh are typically available, subject to lender policies and property evaluation.

Interest Rates: Interest rates on home renovation loans are usually higher than regular home loans due to higher risk. Home loans have floating interest rates, determined by factors such as credit score, loan amount, employer’s profile, and business details. These rates range from 8% to 12%, with repayment periods extending up to 20 years.

Eligibility: To qualify for this loan, you need to be an Indian citizen with regular income, at least 21 years old, and have a good credit score. Proof of income, employment, and stable financial history may also be required.

Documentation: Documents required include proof of identity, address, income, and employment. You’ll also need to provide ownership and collateral proof, along with estimated repair costs.

Tax Benefits: Borrowers can claim annual interest deductions of up to Rs 30,000 under section 24(b) of the income tax act. This deduction applies to interest payments up to Rs 2 lakh on a self-owned property.

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