Home improvement loan can help you add new features to your home, like an addition or porch, or renovate your kitchen, bathroom or living room. These loans can be secured with your property itself as collateral and are available to those who are salaried, as well as self-employed homeowners. Here’s what you need to know about getting a home improvement loan when you’re salaried.
Qualifying As A Salaried Employee
Salaried employment typically offers flexibility and stability, but it also means your income is more difficult to predict. Unlike hourly workers, salaried employees generally don’t get paid for overtime or work-related travel. It all comes down to qualifying as a salaried employee. Here are three steps to take: When determining whether or not an individual is a salaried employee under federal law, regulators focus on two key points:
(1) how much control does an employer have over how, when and where an employee performs his duties; and
(2) how predictable is an employee’s annual income?
To qualify as a salaried employee, you must be able to answer yes to both of these questions.
Bank of Baroda
Government-owned Bank of Baroda offers home improvement loans up to Rs 50 lakh (up from Rs 30 lakh earlier). The eligibility criteria is similar to other banks or firms, but you don’t need any collateral. If you have high disposable income and own your house, then consider applying for an unsecured home loan.
Interest rate: 6.85% p.a.
Tenure: Up to 30 years.
Processing fees: 0.50% of the loan amount
TATA Capital Home Renovation Loan
Upgrade your home by getting a new kitchen, redoing your bathroom or converting an attic into your dream master bedroom suite, you might need some extra financial help. That’s where home renovation loans come in. These loans will give you access to funds that you can use towards home improvement projects large and small. The loan amount is based on what you want to do with your house, but it also depends on how much equity you have in your home.
Interest rate: 10.99% p.a.
Tenure: Up to 6 years.
Processing fees: Up to 2.00% of the loan amount
Canara Bank Home Improvement Loan
Canara Bank offers home improvement loans of up to INR 3 lakh. They have set no minimum income requirement for salaried applicants. They also don’t require you to pledge any property as collateral for the loan. Canara Bank home improvement loans are available to salaried individuals. They have no income-based eligibility criteria, but they do require you to have an existing housing loan with them. If you don’t already have a housing loan from Canara Bank, you can apply for one at the same time as applying for your home improvement loan.
Interest rate: 6.90% p.a.
Tenure: Up to 5 years
Processing fees: Up to 0.50% of the loan amount.
HDFC Bank Home Improvement Loan
HDFC Bank offers personal home improvement loans for individuals looking to make home renovations. While most salaried individuals may think they are unable to qualify for one of these loans, that’s not true. The application process is straightforward, and if you have an existing relationship with HDFC Bank, you can apply for your loan online through its online portal and receive your funds within five business days.
Interest rate: 7.55% p.a.
Tenure: Up to 15 years
Processing fees: Up to 0.50% of the loan amount
PNB HFL Home Improvement Loan
Getting a home improvement loan for salaried employees is not always easy as you might think. Your income plays an important role in determining how much money you can borrow from your bank and what interest rate you will be charged on your loan. PNB Housing Finance Ltd., part of one of India’s largest financial institutions, offers home improvement loans for salaried people at competitive rates.
Interest rate: 9.10% p.a.
Tenure: Up to 30 years
Processing fees: Up to 0.50% of the loan amount
A mortgage lender will analyze your financials, but they also look at other factors when considering whether or not they’ll give you a loan. They want to ensure that if something goes wrong with the loan, they’ll be able to recoup their losses and that’s where your credit score, payment history, and debt-to-income ratio come into play. Here’s how those factors affect salaried workers’ chances of receiving home improvement loans You have an excellent chance of qualifying for a home improvement loan if:
credit score: 700 or plus
Age: Min. 18 Max. 65
Residence: Indian or NRI
Employment: salaried or self-employed
Documents required for Home Improvement Loans
If you’re applying for a home improvement loan, you will probably be required to provide several different documents at application, such as :
1)Identity Proof(any one from the following)- Aadhar card, PAN card, Voter ID, Passport, Driving license.
2) Residence Proof (anyone)- Copy of electricity bill, telephone bill, Passport, Aadhar card, and Driving license.
3)Income proof- IT papers, Salary slip of 3 months, Bank statement of salaried account.
4) Property/Home Improvement-related documents- title deeds of the property.
The first step is talking with your bank about getting a home equity loan. Banks typically will require you to have an existing line of credit in order to get one, and some are also stricter than others. One other option is applying for a home improvement loan through a peer-to-peer lending platform like Lending Club or Prosper. These platforms match borrowers directly with investors who want to lend money, so it may be easier (and cheaper) than trying to go through a traditional lender. But note: Peer-to-peer lending isn’t right for everyone—read more here before deciding if it’s right for you!
Loans from banks are often given out with added requirements and regulations that can be difficult for salaried individuals to meet. Thankfully, as you’ve seen above, there are some financial institutions out there that make it easy for salaried individuals in good standing to receive home improvement loans. If you’re interested in obtaining one of these loans, consider applying for one at your local bank or credit union first. After all, if they don’t have a loan program available specifically for salaried individuals, they may have other loan programs that could help you achieve your goal.
If nothing else works out, turn to online lenders—they offer more flexible terms than traditional lenders and may be able to provide what you need. After all is said and done, remember: Whether you choose an online lender or apply directly with your bank or credit union, getting approved for a home improvement loan is just the beginning!