You can get the home renovation loan to upgrade interiors, change tiles, do flooring, and paint rooms to make your living space modern and more comfortable.
Some banks and financial institutions allow you to use the renovation loan to purchase new furniture, fixtures, and white goods like modern taps, showers, refrigerators, and even air conditioners.
Below you can find the list of 11 banks and financial institutions offering the best home renovation loan in India.
Best Home Renovation Loan in India 2020
#1. HDFC Home Renovation Loan
HDFC Ltd offers home renovation loans for both salaried and self-employed persons. The loan can be availed by existing as well as for new customers.
If you are a co-owner then you need to apply for the loan jointly. HDFC mandates that all owners will have to be co-applicants for the home improvement loan.
The Amount of Loan For Existing Customers
| Loan Amount | Maximum Amount |
| Up to Rs. 30 Lakhs | 100% of the improvement estimate (subject to 90% of the market value of the property) |
| Rs. 30.01 Lakhs to Rs. 75 Lakhs | 100% of the improvement estimate (subject to 80% of the market value of the property) |
| Above Rs. 75.01 Lakhs | 100% of the improvement estimate (subject to 75% of the market value of the property) |
Amount of Loan For New Customers
| Loan Amount | Maximum Amount |
| Up to Rs. 30 Lakhs | 90% of the improvement estimate |
| Rs. 30.01 Lakhs to Rs. 75 Lakhs | 80% of the improvement estimate |
| Above Rs. 75.01 Lakhs | 75% of the improvement estimate |
HDFC Ltd home improvement loans come with a maximum tenure of up to 15 years.
Rate of Interest on Home Improvement Loan
| Loan Slab | For Women Borrowers | For Other Borrowers |
| Up to Rs. 30 Lakhs | 6.95% to 7.45% | 7.00% to 7.50% |
| Rs. 30.01 Lakhs to Rs. 75 Lakhs | 7.20% to 7.70% | 7.25% to 7.75% |
| Above Rs. 75.01 Lakhs | 7.30% to 7.80% | 7.35% to 7.85% |
Pros
- 100% loan amount to existing customers
- 0.5% lower interest rate for women borrowers
- Interest rate starting at 7%
Cons
- All co-owners of the property need to be co-applicants
Best for – Existing HDFC Ltd customers & women borrowers
Check out – Best banks for home loan in India
#2. Bank of Baroda Home Improvement Loan
Apart from repairs and renovation, you can use the renovation loan from Bank of Baroda to purchase new furniture, fittings and furnishings like sofas or electronics.
The loan amount depends on the location of your home. In Mumbai, you can have up to Rs. 10 crores as a home improvement loan. Whereas, in other metros, the amount is Rs. 5 crore and Rs. 1 crore in semi-urban and rural areas.
Bank of Baroda offers a 36 month moratorium period and the maximum tenure is 30 years including the 3 year moratorium period.
The interest rate on the home improvement loan is linked to the Baroda Repo Linked Lending Rate(BRLLR) and varies from 6.85% to 7.85%.
Pros
- 36 month moratorium period
- High, up to Rs. 5 Crore of the loan amount
- 30 years or repayment period
Cons
- Repo linked interest rate
Best for – People living in Mumbai and metro cities
#3. Kotak Home Renovation Loan
Kotak Mahindra Bank offers home improvement loans as personal loans, that range from Rs.50,000 to Rs. 20 Lakhs. The loan comes with flexible EMI options that you can repay over a period from 1 to 5 years.
However, the interest rates are on a higher side starting from 10.75% p.a.
For the home renovation loan, Kotak Bank requires you to
- Have a net salary of Rs. 20,000 per month
- Should be a graduate
- A resident of a city for at least 1 year
- Minimum work experience of at least 1 year
Pros
- Flexible EMI option
- Pre-approved loan for existing customers
Cons
- Low, Rs. 20 Lakh loan amount
- 10.75% rate of interest
Best for – Existing Kotak Bank customers with a pre-approved loan offer
#4. DHFL Home Renovation Loans
You can avail the DHFL home improvement loan up to 100% of the estimate or 90% of the market value whichever is lower. The renovation loan estimate will be checked by the Technical Officer.
The interest rate charged by DHFL starts form 9.50% and the loan term can be up to 10 years.
You need to be either salaried or self-employed (businessman or professional) to avail of home improvement loans from DHFL.
Pros
- Rs. 30 Lakh and above of loan amount
Cons
- Interest rate starting from 9.50%
Best for – Salaried or self-employed persons
#5. TATA Capital Home Renovation Loan
You can borrow as low as Rs. 75,000 and up to Rs. 25 Lakhs from Tata Capital to renovate your home. There is no precondition of collateral or security to avail loan from Tata Capital.
You can use the renovation loan for revamping your living space, remodel your bathroom and renovate an outdoor patio.
The renovation loan tenure varies from 12 months to 72 months, but the interest rate is on the higher side, which starts from 10.99%.
Tata Capital gives priority to those applicants who are salaried individuals with Rs. 20,000 per month income and a minimum of two years of experience. For entrepreneurs, they should have three years of business experience.
Pros
- The loan can be used to renovate outdoor space
- Loan amount varies between Rs. 75K and Rs. 25 Lakhs
Cons
- 10.99% and above interest rate
- Requires 2/3 years experience
Best for – Salaried and self-employed persons having 2 / 3 years of experience
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#6. Bajaj Finserv Home Renovation Loan
Bajaj Finserv offers home improvement loans in the form of personal loan for an amount up to Rs. 25 Lakhs with a flexible tenure from 24 months to 60 months period. The interest rate starts at 12.99% onwards.
Bajaj Finserv has an online application and processing option, where you can get the approval in 5 minutes and disbursal of the loan in 24 hrs post verification.
You need to be a salaried individual employed with an MNC, public, or private company with monthly income up to Rs. 35,000 depending on your city.
Pros
- Flexible tenure of 24 months to 60 months
- Online application facility
Cons
- High 12.99% rate of interest
Best for – Salaried individual employed with an MNC, public or private company
#7. ICICI Home Renovation Loan
ICICI Bank home renovation loan in the form of a personal loan for a loan amount of up to Rs. 20 Lakhs.
ICICI Bank requires the least number of documents, provides online application mode and charges interest starting at 11.25% on your home renovation loan. There is no precondition of security or collateral.
However, you will be encouraged to open a savings account with ICICI Bank while applying for the home renovation loan, if you are not an existing ICICI customer.
Pros
- Online application an quick disbursal
Cons
- Loan amount of Rs. 20 Lakh
- High 11.25% rate of interest
Best for – Existing ICICI Bank customers
#8. PNB Housing Finance Home Improvement Loan
PNB Housing Finance provides home improvement loans up to Rs. 75 lakhs (over 75 Lakhs in few cases) with maximum funding up to 75% of market value. The rest of 10% to 25% of the amount will be from your own contribution.
The interest rate on the home improvement loan is as under
| Loan amount | Salaried/ Self employed professional | Businessman/ self-employed non- professional |
| Less than 75 Lakhs | 9.10% to 11.25% | 9.30% to 12.50% |
| More than 75 Lakhs | 9.20% to 11.25% | 9.50% to 12.50% |
The home improvement loan tenure is up to 30 years.
Pros
- Loan amount of Rs. 75 Lakhs and above
- Up to 30 years of the loan tenure
- Online application
Cons
- Interest rates up to 12.50%
Best for – Self-employed professionals & non-professionals requiring large loans and long repayment tenure.
#9. Union Bank of India Home Renovation Loan
Union Bank of India offers up to Rs. 30 Lakhs loan for home repairs, improvements, extensions of the existing residential property.
However, you need to bring 20% of the total cost of repairs and renovation and the rest 80% of the renovation loan will be financed by the bank.
Union Bank of India offers a moratorium period of 12 months and a total repayment period (including moratorium period) of 15 years.
The interest rate depends on the cibil score & the margin amount and ranges from 6.70% to 7.10%.
Pros
- Lower rate of interest up to 7.10%
- Moratorium period of 12 months
Cons
- Low loan amount
- Processing can be slow
Best for – Salaried person looking for a low rate of interest and moratorium period.
#10. IIFL Home Improvement Loan
You can use IIFL home improvement loans for various purposes like kitchen renovation, building an extension, loft conversion, bathroom fitting, garden design and more.
The loan amount is based on your salary, risk profile and estimate submitted. IIFL does not disclose the quantum of the loan upfront.
However, it provides a long tenure of 20 years on the home improvement loans at interest rates starting from 8.70% onwards.
IIFL has a pan India branch network and legal and technical advisory services for home renovation loans to help you in need.
Pros
- Online application & quick processing
- Interest rates starting from 8.70%
- Long repayment tenure of 20 years
Cons
- Amount of loan not disclosed upfront
Best for – Salaried and self-employed person looking for long tenure loans.
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#11. Fullerton India Home Renovation Loan
Fullerton India offers home renovation loan in the form of personal loan for an amount of up to Rs. 25 Lakhs that you can repay in up to 5 years.
Fullerton India covers 90% of the renovation cost and the rest 10% of the cost is the margin that you need to bring.
The loan carries an interest rate that starts at 11.99% and the processing and disbursal take approximately 72 hours.
For the loan application, you need a monthly income of Rs. 20,000 in non-metro areas and for Mumbai and Delhi, the minimum income should be Rs. 25,000.
Pros
- Online application and disbursal
- 90% of the costs are covered
Cons
- A high rate of interest starting at 11.99%
Best for – Individual with at least Rs. 20,000 per month salary.
Procedure to Get Home Renovation Loan in India
You need to finalize the bank or the financial institution for a home renovation loan based on your renovation needs and eligibility criteria.
There are two application option
#1. Apply Online (If the Lender Provides the Facility)
Here you need to get your email and mobile number verified using the OTP sent by the bank. Later you need to provide personal details, employment status, income and bank details.
Then you are prompted to select the loan amount and tenure that you require. After which you need to upload the documents as requested and submit the online loan application form.
The bank/ financial institution will contact you in case they need any additional information or documents. If everything is in order then you will be sanctioned the loan and the amount will be credited into your bank account.
#2. Offline Application
You need to download the loan application form the website of the bank/ financial institution or need to visit the nearest branch for an application form.
You need to fill in the form, attach documents, sign and courier or deliver the loan application form to the bank/ financial institution.
Post receipt, your application will be processed and the RM will contact you if they require additional information/ documents.
Note – Depending on the renovation estimate submitted, you may be called for discussion or the bank may send an official for a technical visit.
Home Renovation Loan Eligibility in India
To be eligible for the home renovation you need to be
- In the age bracket of 21 to 65 years
- You need to be a salaried or self-employed person with minimum Rs. 20,000 monthly salary. This will also depend on the city of residence.
- Need to be the owner or co-owner of the property to be renovated
Home Renovation Loan Documents Required in India
#1. Proof of Identity and Address
You need to submit identity proof documents for KYC. The documents include PAN card, Aadhar Card, Passport, Voters ID, or Driving License.
The address proof documents that you can submit are
- Copy of electricity bill/ telephone bill
- Aadhaar Card
- Voter ID
- Water bill/ Property tax receipt
#2. Proof of Income
The documents in support of your employment and salary income are
- Last 3 months salary slip
- Last 6-month bank statements showing salary credits
- Latest form-16 and IT returns
- IT Return acknowledgment
#3. Home Improvement Related Documents
- Original title deeds and ownership documents of your home
- No encumbrance document on the home
- Estimates and invoices (if any) for the renovation work from an Architect or Engineer
- Proof of margin or own contribution
Any other documents based on the specific condition, (may vary from bank to bank)
- Appointment letter if your employment is less than 1 year old
- Details of any other existing loans and the bank statements showing satisfactory repayment, if any
- Passport size photograph
- A cheque for processing fee
Home Improvement Loan Tax Benefit in India
As per section 24 of the Income Tax Act, up to Rs. 2 Lakhs can be claimed as a deduction in respect of the home loan interest repayments.
The cap of Rs. 2 Lakhs also includes a deduction of up to Rs. 30,000 per annum for the interest amount that you pay on the home renovation loan.
Which means, you can take a home loan and claim additional tax benefits of up to Rs. 30,000 (under section 24) even if you do not have an existing home loan.
Final Words
Home renovation loan is an easy option to upgrade or change your living space to suit your needs and style without worrying much about the finances.
Based on your income, repair estimates and repayment capacity you can select the home renovation loan as per your needs.
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