Your home is a reflection of your thoughts, personality, and identity. Its four walls reckon the life you’ve built for yourselves and your family. A home should be comfortable, welcoming, and filled with warmth to take your stress away after a long day at work. As your family gets bigger, so do their needs and dreams, and you aspire to have a more comfortable home to give your family a better quality of life.

No matter how carefully you’ve built your house, there is always a need for an expansion, renovation, or makeover. A personal Loan for home renovation or a home improvement loan is the financial answer to your funding issues while ensuring your home mirrors your dreams.

A home renovation loan helps you acquire instant and easy funds for home expansion, renovation, making structural changes, home repairs, or an upgrade. A home renovation loan is an unsecured loan explicitly availed for home refurbishment. You should avail of a Personal Loan for home renovation if:

• • You want to go for a home renovation or expansion and lack adequate funds for it.
  • You need a large sum (not more than 25 lakhs) to repay over a long period.
  • You want to avail of tax benefits on loan EMIs.
  • You don’t want to break open your savings for home refurbishment.

Home Improvement Loan Eligibility

To have a better shot at getting approved for a personal loan for home renovation, it is essential to know and understand the eligibility criteria of your chosen lender. Traditional personal loans have given way to easy and instant personal loans that enable borrowers to access instant funds following an easy online personal loan application process and criteria.

Speaking of Personal Loan Eligibility, here are the prerequisites that an applicant must possess to qualify for a home improvement loan:

• • You should be a residing citizen of India.
  • Your age at the time of applying for the loan should fall between 25 and 58 years.
  • Your minimum monthly income from all sources should be greater than or equal to INR 25000.
  • If you’re a salaried professional, you should possess a total work experience of 12 months and be employed with your current organization for a minimum of 6 months.

Though eligibility criteria for a personal loan for home renovation vary for all lenders, it is advisable to research, compare, and choose the lender with relaxed eligibility criteria. Ensure you know the factors that affect or improve your eligibility to apply for a home renovation loan.

Factors Determining Your Personal Loan Eligibility

• 1. Your Credit Score

Your credit score is the most critical factor determining your loan application outcome and what rate of interest you would be offered. Your credit score is a 3-digit score that reflects your creditworthiness to the lenders. Simply put, it goes on to show the lender whether you’re a responsible borrower and efficient with managing credit if sanctioned.

A credit score ranges from 300-900, and a score of 725+ is considered favorable to get a positive response from the lenders on your loan application. It is a combined sum of your credit history, loan repayment history, and any loan default cases.

In other words, the higher your credit score is, the stronger your loan application is to the lenders. However, if you check your credit score and find it to be less than 725, your chances of getting a personal loan approval get slim, or even if you get approved, you will end up paying a higher rate of interest.

If you’ve some time at hand before applying for a home renovation loan, it is recommended you work on improving your credit score. Get regular with your existing loan or credit card payments to work in your favor and improve your credit score eventually to avail of a loan in the near future.

• 2. Your Income

Your income from all sources is another crucial determining factor in your personal loan eligibility quotient. The simple reason – if your income is higher, it shows the lenders that you’re capable of repaying the loan without any difficulty. If you’re a salaried person, your minimum take-home income shouldn’t be less than INR 25000 per month.

When you apply for a home renovation loan, your lender checks the submitted income proofs to assess your financial standing. They also check if you’ve any previous loan commitments, as that decreases your available income to repay the EMIs. No matter what income group you belong to, your monthly EMI and expense obligation, also called Fixed Obligations to Income Ratio (FOIR), shouldn’t exceed more than a specified percentage of your total income. Lowering your FOIR is critical to getting approved for a personal loan application. Also, if you have additional sources of income, make sure you factor them in before submitting your loan application.

• 3. Your Age

Your age is also a crucial factor when it comes to determining your personal loan eligibility for a home renovation loan. If you’re young at the time of applying for a loan, you’ve better chances of getting approved for the same. Most lending institutions tend to believe that a loan applicant in his younger years is more capable of repaying the loan than in his later years.

• 4. Your Employer & Job Stability

The reputation of the employer you’re working for at the time of personal loan application is essential for lenders to gauge your credibility and loan repayment capacity. If you’re working in a top-notch MNC or an established organization with a higher turnover, it is advantageous for you to get approved for a personal loan for home renovation.

This is because the employees working with such reputed organizations are believed to be having a secure and stable future with a steady flow of funds. This goes on to make them responsible applicants with lesser loan default chances.

Also, employment stability is another critical factor that helps lenders gauge your personal loan eligibility. Your lender analyses your financial health based on your job stability before granting you a loan. Your longstanding stability at the current employer goes on to show that you’re a stable applicant and will be responsible for handling loans as well.

Your personal loan eligibility is determined by how the above factors appear in your loan application. Having the right and extensive information at hand before applying for a home improvement loan gives you enough time and scope to improve on them if you’re lagging. This will ensure your loan application doesn’t leave lenders with any chance to reject, and you’re instantly approved for a home improvement loan.

Clix Capital is the choicest lender in India, offering diverse loan products to appeal to Indian consumers in all areas of life. Be it home loan, personal loan, or business loan, our loan solutions are aimed at making easy funds instantly accessible to all who meet our simple eligibility criteria in a hassle-free manner. Apply for a loan now and move an inch closer towards financial freedom!

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