When someone is in financial distress, he can rely on an advance or a borrowing – typically known as a personal loan in banking parlance. It is one of the most commonly known advances which investors can take to meet their urgent requirement for money.
Personal loan is an unsecured loan and its proceeds are straight away transferred to the bank account of consumers who are given a free rein of how to use it. One may use the proceeds of the loan for investing in a business, for an emergency, to buy a luxury item or even to go on a vacation. Among all these purposes, one task for which it is ‘appropriate’ to borrow is to spend on the house renovation.
Meanwhile, it is vital to know that one should take a home loan for buying a property. But when you want to get some renovations done and the proceeds of the home loan fall short, you can rely on a personal loan for the same. These are the reasons for which personal loan for home renovation makes a lot of sense.
Personal loan for home renovation
I. Investment over consumption: Investing in a property gives better returns rather than merely spending the money. Instead of spending on consumption such as travel or a luxury, spending on house renovation is far better in terms of long-term returns.
II. Price of property: When you invest a certain amount of money on a property, the appreciation in the property price is generally disproportionately higher. This means you may invest only ₹10 lakh, but the total increase in property could be more. By this rationale, investing in a fixed asset reaps big dividends.
III. Fixed interest: Most personal loans have fixed interest rates, which means predictable monthly payments. This can help you manage your budget better compared to using other loans which charge floating rate of interest.
IV. Complete discretion: Banks usually do not ask for detailed spending breakdowns, so you can use the loan for everything from structural changes and interior design to buying furniture or appliances.
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