Home Improvement Loan - Everything You Need to Know
04 Jul 2022
Table of Content
As per an old adage, ‘a person’s house tells you a lot about them’. Your home mirrors your taste and your lifestyle. It tells your guests how you lead your life. But like anything you own, your house, too, goes through some wear and tear every few years. Now, it may not be possible to sell off your home just because it has suffered some minor damages. But you can always renovate or remodel it and give it a facelift. One way to do so is through Bank of Baroda’s Home Improvement Loans. The below article explains the various benefits of taking a Home Loan to spruce up your house. Read on.
What is Home Improvement Loan?
A Home Improvement Loan, also known as a Home Renovation Loan, is a type of loan that enables you to carry out any repair or renovation work to your existing house. It is a type of Home Loan through which you can make big and small changes to your house. Whether you wish to conduct essential repairs, make structural changes, fix leaky ceilings or simply paint your house, you can use the funds from the House Renovation Loan to do it all. You may also use the funds to furnish your house with furniture and fixtures and other gadgets such as fan, geysers, air conditioners etc.
Salient Features and Benefits of Bank of Baroda Home Renovation Loans
Here are the critical aspects of the Bank of Baroda Loan for Home Improvement.
Both Resident and Non-Resident Indians can apply for the loan, as can Persons of Indian Origin (PIO) and individuals holding Overseas Citizenship of India (OCI).
- for salaried persons: retirement age
- for others: 65 years
- You can spend the loan amount flexibly to fund your various house-related expenses.
- You can enjoy competitive interest rates with flexible repayment terms leading to budget-friendly EMIs.
- The documentation process for the loan is not elaborate either. You can obtain the funds with required documentation.
- You may apply for the loan individually or jointly, and the co-applicant could be a close family member, including your spouse, parents, siblings, etc.
Minimum age - Minimum age of the applicant must be 21 years
Maximum age (age + repayment period) –
Maximum age can be considered beyond above on case to case basis.
You should apply for the loan if you need funds to repair, renovate, remodel or improve your existing house. You may also use it to conduct paint or repair work and purchase furniture and fixtures and other gadgets such as fan, geysers, air conditioners etc.
• Interest Rates
Bank of Baroda offers home improvement loan on pricing of home loan based on the applicant’s age, income, and credit score. The bank revises interest rates frequently, and you can visit the Bank of Baroda website to check the latest rates.
• Loan Amount
The loan amount you can obtain depends on your income & repayment capacity. Maximum loan limit is Rs.50.00 lacs. You can repay the amount borrowed and interest component in affordable Equated Monthly Instalments (EMIs).
Mortgage of the property to be repaired / renovated.
You do not have to bother with elaborate documentation. You simply need to provide your basic documents like your ID, address, and income proof documents along with your property documents and estimate / quotation for improvement work. You can click here to check the accepted list of documents based on your eligibility.
You can enjoy EMI holiday or moratorium period on your Bank of Baroda Home Improvement Loan. During this time, you need not pay any EMIs. Maximum moratorium period is -6- months or one month after completion of repair / renovation work whichever is earlier. However, the total repayment tenure, including the moratorium period, is -15- years.
Reasons To Opt For A Bank of Baroda House Renovation Loan?
Here’s why opting for a House Renovation Loan can prove worthwhile.
Apply for a Home Improvement Loans with Bank of Baroda
Now you can easily apply for a Loan for Home Renovation and improvement with Bank of Baroda. You can visit your nearest Bank of Baroda branch or sign up for the loan online. You can download the loan application form from our website and use our Home Loan EMI Calculator to compute your potential monthly payable EMI. So, go on and give your home the makeover it deserves with Bank of Baroda Home Renovation Loans.
Gold Loan vs Personal Loan - Which is Better & Why?
A home not only provides a roof over your head, but also doubles up as an investment. Your property can be sold for money at some point in the future. It can also function as collateral for a loan. Home loan is one of the best ways to finance the purchase of your dream flat or house. A home loan helps you safeguard your savings and gives you all the required flexibility to repay the cost of your property with comfort and ease by the way of EMI.
Now, there are so many options of home loans available out there. Choosing just one among all these can be quite confusing. To help you get the best option, here are a few home loan tips that can prove helpful.
1. Check your CIBIL score
Home loans are typically of high amounts and long tenures; thus, they can only be given to individuals who have a good credit history. The minimum home loan credit score required by most of the banks in India is ranges between 650-750. Furthermore, your CIBIL score is directly proportional to the loan amount you are eligible for. This means that having a higher CIBIL score helps you procure loans of higher amount. Generally, having a CIBIL score of 750 and above is considered ideal for procuring a good and substantial value of a home loan. If you check your CIBIL score and find it to be below 650 or just at par with 650, it is better to work on increasing your score before applying for a home loan. Having a good CIBIL score can also help you procure a loan at a relatively lower interest rate.
It is recommended to check your CIBIL score every 3 to 6 months. This will help you keep track of your creditworthiness and devise a strategy to increase your score.
2. Start saving for a down payment
It is important to plan your finances and save up for the down payment before initiating your application for a home loan. This is, perhaps, the best home loan advice that anyone can give you. Lenders typically require you to pay 10% to 30% of the total purchase value of the house or property as down payment depending on your loan amount.
With increasing expenses, it can be quite difficult to save for your home loan down payment. However, making small changes in your monthly budget can ensure that a portion of your income is put aside in a savings account/Investment account etc. to build a corpus for the down payment.
3. Get your financial documents in order
When you take a home loan, you will be required to provide your lender with certain documents such as your recent salary slips, ITRs, and bank account statements, among other paperwork. It helps to keep these documents ready in advance so that you do not have to rush at the eleventh hour to find what you need.
The list of documents required for a home loan can vary between lenders. The documents required can change slightly depending on whether you are salaried or self-employed. Hence, it is better to check with the lender about the records that are required by them. You can easily get a list of required documents by visiting the lender’s website or by calling them up directly.
4. Use a home loan EMI calculator
Understanding your EMI payments is one of the most important home loan repayment tips to keep in mind. Calculating your monthly EMI payments before applying for a home loan can help you avoid taking on debt that you cannot afford to repay.
EMI calculations are dependent upon the interest rate charged and tenure of the loan among many other factors; hence, EMIs are not that easy to calculate manually. Fortunately, you can use the lender’s home loan EMI calculators online to get an idea of the loan amount that you can afford to borrow.
5. Select the right type of home loan
There are many different types of home loans offered by every lender. Bank of Baroda offers its customers different types of home loans including top up loan, home improvement loan, and a home loan takeover scheme, among others. Each type of home loan offers different benefits to borrowers. Hence, it is better to compare bank loans and choose the right home loan that best suits your needs.
When taking a home loan, you can also choose between a fixed interest rate home loan or a floating interest rate home loan. While a fixed interest rate loan will have a constant interest rate throughout the loan tenure, the floating interest rate will see the interest rate change as per the market.
6. Compare the different home loan offers
The cost of procuring a home loan varies between lenders too. When selecting a home loan, you should consider the interest rate charged, home loan processing fees, application fees, technical valuation charges and other such expenses before starting your application process.
To get the best home loan in 2022, do make sure to compare the different loan offers and the other ancillary costs that are associated with borrowing. This research will help you make a smart choice. Remember that a home loan is debt that you take for a long term – generally between 20 to 30 years. So, you would want to pick the best loan provider who fulfils your financial needs for peace of mind.
7. Stay connected with your lender
After you submit your loan application, the lender may require some additional information from you before processing it ahead. Giving quick responses to the lender will help you get the loan amount disbursed swiftly.
It is also imperative to stay in touch with your lender throughout the loan tenure. This will help you build trust with the lender and get the timely help if needed.
8. Keep your credit score maintained during the loan processing period
Lenders typically check your credit score before accepting your loan application. However, they can also pull up your scores again before sanctioning the loan. This helps them ensure that you are a creditworthy individual and are consistent in repaying your debts. Hence, do not get lax on your payments after the lender has accepted your home loan application. Rather, pay more attention to your credit card bills and ensure that they are paid on time. It is also better to avoid applying for new loans until your home loan is sanctioned. This will help you maintain your credit score.
9. Read all the loan related documents carefully
It is particularly important to understand the different terms and conditions of the home loan before signing the documents. Ensure that you go through the documents and get comprehensive knowledge of what you are signing up for. You can contact your lender and ask them for any help you need in understanding the fine print.
How to Get a Personal Loan Without a Salary Slip in India?
Personal loans can prove helpful in consolidating your existing debts and helping you meet financial emergencies. You can even procure a personal loan to finance special occasions such as a marriage ceremony or an anniversary holiday. It is one of the
most popular types of loans available in the market today.