Reasons to Opt for a Home Improvement Loan | Kotak Mahindra Bank - Home Loan Stories

17 JUNE, 2022

Your home is said to reflect your personality and life stage. So, as you grow and change, it’s only natural that you would want the same to be reflected in your home. Whether you want to tear down a few walls to have an open kitchen or redo the flooring to be wooden for a more earthy aesthetic, you can do so by applying for a home improvement loan with Kotak Mahindra Bank. Let’s discuss the reasons why this could be a great option.

1. Maintains the value of your home

When you undertake home improvements, you are preserving the value of your home. In fact, the right home improvements can also enhance the resale value of your property. This is in addition to making your home more comfortable and functional for you and your current needs.

2. Affordable financing option

A home improvement loan is usually secured against the property itself. Hence, being a secured loan, the interest rate of a home improvement loan is usually lower compared to unsecured loans. Also, when you use a home improvement loan to fund the upgrades and renovations your home needs, you can bear the cost irrespective of how much they cost since you will be paying it back in small amounts in the form of Equated Monthly Instalments (EMIs).

3. Flexible usage

You can use a home improvement loan for a wide range of home improvements including repairs, flooring, tiling, painting, extensions, plumbing, etc. The best part is that you can avail a maximum of 90% of your home value. This allows for all the home improvements you want to undertake in one go so that you do not have to go through the hassle again after a few years for some other purpose.

4. Long-term tenure

When you apply for a home improvement loan with Kotak, you can get a loan tenure of maximum 20 years. This means that your EMI burden can be low, and you do not have to worry about fitting it into your monthly budget. That’s because the longer the loan tenure, the lower is the EMI amount.

5. Tax benefits

Another benefit of a home improvement loan is that you can claim tax deductions for the interest component of your home improvement loan EMIs. Under section 24 of the Income tax Act, 1961, you can claim a deduction of Rs 30,000 per annum. This means that you can lower your taxable income and hence your tax liability.

Once you have your home improvement plans in place and a rough estimate of how much that will cost, you can use Kotak’s home loan EMI calculator to figure out what your EMI obligation will be and what your total cost of borrowing will amount to. This is essential because it will allow you to have a solid repayment plan in place before you apply for the loan and will help you meet your EMIs comfortably.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.