Living in a beautiful home is a dream that most people cherish. By just buying a property you do not get a dream home – you need to make the house a home by adding your personal touch. This is why many people renovate their houses and make them more liveable. This happens mainly when you purchase a resale house. Also, home renovations are needed when your existing house becomes old and requires repairs and refurbishing. A home renovation project requires a lot of money and this is why people opt for loans. But is this a good practice? Let’s find out?
Taking a loan for home renovation
The most common type of loan taken when renovating a house is a personal loan. you can take a personal loan on very simple terms these days. Also, the loan is processed instantly if you have your documents in place and if you qualify for it. These are some benefits you get. However, you must think very carefully before taking a loan to renovate your house. This is mainly because a personal loan is an unsecured loan and is more expensive than the other loans. Also, failing to repay the personal loan on time can lead to many problems such as a badly dented credit score.
Factors to consider before opting for a loan to renovate your house:
- How much is needed?
If you have a good credit score, you may be eligible to get a high personal loan amount. While it is tempting to take a large loan, you should always remember to borrow only as much as you need. If you borrow too much, you will end up wasting the money and then will struggle more to repay it.
- What is your repayment capacity?
You need to understand your own financial status and capacities before you borrow and choose an EMI schedule. Borrow only what you can afford and repay. If you feel the loan amount is too large for you to repay, make some changes in your renovation plan and settle for a lower personal loan amount.
- Who is offering a better deal?
Compare the personal loan offers before you take the loan. See which bank offers a better rate of interest and go for the most economical option.
If you take the personal loan after considering these factors, you should be able to put the money to good use and satisfactorily renovate your house.
A word of caution
While a personal loan can prove to be very handy when you need funds to renovate the house, you should assess the requirements before you opt for the loan. Make a list of the changes you want in your house. If they are minor changes, such as just a paint job or some furniture changes, you may be able to avoid taking the loan. If however, your house requires massive renovation, taking a personal loan may be a good option for you.
