What you need to know
Banks and HFCs finance repairs, renovation and extension of an existing home through home-improvement loans or a top-up on your home loan. These are priced close to home loans — far cheaper than personal loans — but lenders fund only structural and fixed work, not loose furniture.
Options
| Route | Details | Notes |
|---|---|---|
| Home improvement loan | Separate loan against the property, e.g. IOB up to ₹15 lakh, LIC HFL Griha Shobha, Bandhan Sajavat | Needs cost estimate and property documents |
| Top-up on home loan | SBI Top-up 7.75% – 10.50%; YONO Insta Home Top-up 8.10% | Quickest for existing borrowers |
| Home extension loan | Adding rooms or floors | Needs approved revised plan |
| Personal loan | Unsecured | Much higher rate; no house-property deduction |
Tax benefit (old regime)
- Interest on a loan for repairs or renovation is deductible up to ₹30,000 a year under Sec 24(b) for a self-occupied home, within the overall ₹2 lakh limit.
- Principal repaid on a repair loan does not qualify under Sec 80C.
- For a let-out home, interest is deductible against rent.
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Frequently asked questions
Can a renovation loan pay for furniture?
Generally no — only civil work, flooring, plumbing, electrical, painting and similar fixed improvements.
Is a top-up taxable-deductible?
Only if you can show it was used for purchase, construction or repair of the house, with receipts.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.