If you are planning to get your home refurbished or renovated, it is needless to say that the expenses can be quite high. There are several funding options available to help you cover the costs of repairing your home. One of them is a home improvement loan that you can avail from institutions like Reliance Home Finance. With repayment terms extending up to 15 years and the best interest rates possible, this is one of the best and most reliable funding options when it comes to getting your home repaired and refurbished.
What is a home improvement loan?
Home improvement loans are specially designed loan plans that are offered by banks and NBFCs to cover almost 80-90% of the costs of renovating or repairing your home. These loans are usually offered with the financed property as the security or any other interim security option as deemed necessary by the bank.
In comparison to other financing options available, the home improvement loans offered by Reliance Home Finance are the best option as they give you a long repayment tenure and lower interest rates that usually range between 9-12.5%.
Improving chances of approval on home improvement loans
You can improve your chances of getting an approval on your home improvement loan by following some simple measures. Here are some tips to improve your chances of getting an approval on your Home Improvement Loans:
- Check the eligibility criteria: To get an approval on a home improvement loan, the first thing you need to ensure is that you match the eligibility criteria. This varies from one banking institution to another. Generally, the eligibility criteria for home improvement loans is as follows:
- The applicant should be a salaried or self-employed individual
- The applicant should have the necessary income to make regular repayments
- The applicant must be the owner of the co-owner of the property that he is availing a loan for.
The best option available to check your loan eligibility is an eligibility calculator that is available online. It is not advised to search for eligibility options from individual websites. Multiple searches normally tend to reduce your credit score. Having too many similar searches within a span of 24-48 hours is notified to credit bureaus as your credit reports are usually required on most websites. With an eligibility calculator, you can get this information without an effect on your credit score.
- Ensure that you have a good credit history: Your credit score is the most important factor in assessing your Home Improvement Loan The higher the credit score, the higher are your chances of getting an approval on your loan. Before you apply for a loan, make sure you review your credit score. There are some chances of erroneous information in your credit report. If you do notice any such information, having it corrected before you apply for a loan is a must. Contact the creditor who has reported any wrong information to get it rectified. Sometimes, there may also be certain circumstances that have caused issues in your credit report. A Notice of Correct can be placed on the credit report to have this changed.
- Get your documentation right: Getting the documents right is key to ensuring that your home improvement loan is approved faster. Contact the bank that you wish to apply for a loan to get a list of documents that you will need. This includes property papers, bank statements, salary slips and even a detailed expense sheet for the project. Having all these documents in place will ensure that the appraisal of your loan application is faster and smoother. Having authentic property papers is the foremost prerequisite to get an approval on your home loan. Depending upon the loan amount and the type of loan, you may also be required to provide additional documents.
- Choose a home improvement loan plan that suits you: There are different types of loans that are available for home improvement. The type of security that you need to provide, the employment conditions and the interest rates play an important role in determining whether you will be eligible for a loan and also if you will be able to repay the loan installment regularly. If you choose a loan plan that is not affordable, you automatically become a high risk borrower and the chances of your loan getting approved will reduce significantly
- Opt for a bank that you are a customer with: It is always much easier to avail a loan with an institution that you already have a good relationship with. If you have chosen one institution for your banking requirements for several years, visiting the bank is the best way to get an idea of all the options available to you. These institutions already have a record of your account activity and your overall performance in terms of repayments of outstanding loans. If you have had a good history with a banking institution, the chances of getting an approval on your loan are much higher. If you already have a home loan with a certain bank, getting a home improvement loan is a lot easier provided you have made your previous repayments regularly.
- Show necessary income: The most important factor in determining your chances of approval on a home improvement loan is your repayment capacity. This is reflected by your current income. Your income to debt ratio is very important to consider. With most banking institutions a 50-60% ratio is expected. This means that you must be able to take home at least 50-60% of your income after repaying your EMI.
- Look for references: Getting a guarantor is a foolproof way of improving your chances of getting an approval on your loan. You can ask for any friend or relative who is a customer of the bank to give you a guarantee, preferably. In some banks, even letters from landlords stating that you have been paying your rents on time and a record of regular utility bill payment is considered a good reference.