At the time of a property purchase, homebuyers make sure that their location is well connected to hospitals, schools, highways, etc. Now, while the exterior of a property is an aspect that needs to be focused on just at the beginning, your house is going to require more attention than that. This is because as the years go by, a house goes through normal wear and tear. This could range from anything such as having chipped paint on the walls, problems with a couple of floor tiles, or just wanting a general makeover for the house. These problems can be taken care of when you opt for a home renovation.
Now, before getting things started, it is important to understand that these expenses could cost quite a bit. Your finances need to be in place before beginning any home renovation work. While you may have the savings, it is understandable to not want to spend a lot of it at once. In such cases, a good solution would be to apply for loan against property to get financial cover. You can use the loan amount for the home renovation expenses.
- The interest rate of the loan is low
One of the biggest reasons why borrowers prefer going for a loan against property instead of an unsecured loan such as a personal loan is the varying interest rates between both the loans. Since a lender takes more risk by lending an unsecured loan as compared to a secured one, the interest rate is higher, which increases the cost of the loan. This is why a loan against property can be ideal since a loan against property interest rate is usually lower than an unsecured loan.
- You can get a high loan amount
When you apply for a loan against property, the financial institution will study the market value of your property. The loan amount that they approve would depend on the LTV (Loan to Value) ratio. If your property has a high market value, it is possible for the lender to offer a high loan amount. Based on your financial profile, a lender can give you a loan amount in the range of Rs 10 lakh to Rs 5 crore.
- Lenders offer flexible repayment tenures
If you are to apply for a personal loan, the maximum tenure that most lenders provide to repay the loan is usually 5 years. However, you can enjoy a much longer repayment tenure by applying for a loan against property. Since a loan against property is a secured loan, lenders offer longer tenures. This means that the monthly instalments of the loan against property would be much more affordable.
Now that you know how useful a loan against property can be, go ahead and apply for it to get your home renovation started. Do keep in mind to make use of a loan against property calculator to be aware of the loan’s monthly instalments beforehand. This can help in deciding whether to apply for the loan or look for better options.