Renovation Loan

A renovation loan (or home improvement loan) is a type of loan you can take to upgrade, repair, or renovate your existing house. It's often offered as part of a home loan product by banks and NBFCs.

So instead of using your savings to remodel your kitchen, repaint, or fix plumbing—you can take a renovation loan and pay it back in EMIs.

What can you use it for?

• Painting or tiling
• Kitchen or bathroom upgrades
• Electrical and plumbing work
• Flooring
• Structural changes
• Furniture and modular kitchen (in some cases)

How does it work?

You have two main options:
• 1. Top-Up on Existing Home Loan
  • If you already have a home loan, you can apply for a top-up loan for renovation.
  • Usually lower interest than a personal loan.
• 2. Separate Home Renovation Loan
  • You can apply for a standalone loan just for renovation.
  • Tenure is shorter than regular home loans (often 5–15 years).
  • Interest is higher than a home loan but lower than a personal loan.

Key Features

Feature Details
• Loan Amount ₹50,000 to ₹30+ lakhs (depends on need & eligibility)
• Interest Rate~8% to 12% (varies by lender)
• Tenure 1 to 15 years
• CollateralMay be secured (home as collateral) or unsecured
• Tax BenefitsYes, under Section 24 (up to ₹30,000/year interest deduction for self-occupied homes)

What to keep in mind:

• You’ll need to show proof of renovation (estimates, invoices)
• Bank may send someone for property inspection
• Good credit score and repayment history helps
• Some banks club renovation loan with home loan balance transfers too