Home improvement is an important expense that you must be planning but it is one that often goes beyond your budget. As soon as you start remodeling your home, you gradually start feeling the need for other work and some other improvements. So choose the home improvement loan amount wisely, so that your work does not get stuck in the middle due to paucity of funds.
You can also use a personal loan for your home improvement as this loan can be used for any expenditure. Bajaj Finserv Personal Loan is one of the best personal loans today, which offers you the lowest interest rate loan and flexible tenor. If you are confused about something, you can use a personal loan calculator to plan your finances as per your EMI amount and tenure. However, there are some important factors to consider before choosing the right financial instrument before choosing a home improvement loan.
4 factors to evaluate before availing a Home Improvement Loan
rate of interest
Various banks and financial institutions claim to offer the best personal loan at the lowest interest rates. Personal loan interest rates generally range from 11% to 22%, depending on the loan amount, tenure and credit history of the borrower. However, personal loan interest rates can also go as low as 6.5% in special circumstances like festive sales.
All the lending institutions follow strict norms for sanctioning loan applications and you need to submit the required documents at the time of applying. Documents/information required include KYC (identity and address proof), salary/income proof (salary slip/bank statement of last 6 months), PAN card, ITR paperwork and your credit score. You can either send the physical copies of these documents to the bank or directly upload their digital formats online for faster processing. While most of these documents are readily available, one thing you cannot influence is your credit score. Next, let’s see how this important factor affects your loan application.
Your CIBIL Score reflects your loan repayment ability and your good/poor track record of meeting your loan obligations. It can be said that your credit score reflects your loan repayment ability and your recent financial transactions. A higher credit score is given to you if you have successfully repaid your past loans – such as home loan, vehicle loan, credit card bill, or business loan – without stopping any payments. This makes it easier for you to get a loan in future.
Banks and lending institutions provide suitable loan tenure to the borrowers based on the loan amount, your monthly/annual income and the interest rate charged on the loan. Longer repayment tenure means that your EMI will be lower but the principal amount will have to pay higher interest. While shorter tenure means you have to pay higher EMI but the total interest earned will be saved.
As you can see, it is difficult to decide the tenure of the Home Improvement Loan as you need to maintain a fine balance between high EMI or exorbitant interest. Your credit score and monthly income play an important role in determining your loan tenure. If you have a solid credit rating, you can discuss the entire tenure with your agent and increase or decrease it as per your convenience. Using a personal loan calculator is a great way to find out the ideal tenor.
Thus to ensure smooth completion of your home renovation work with enough funds to meet all the requirements, you can apply for a Bajaj Finserv Personal Loan if you meet the basic eligibility criteria of the lenders.