Personal loans: Should you opt for it in case of home renovation? | Mint

There could be a number of reasons to raise a personal loan. It could be an emergency or to buy a luxury item or even to pay for home renovation. Although there are some people who go to the extent of taking out a loan for travel or luxury – such practices are best to be avoided.

Renovating a home is seen as an investment and therefore it does not harm to raise a personal loan for the same.

These are some of the reasons when it does not hurt to raise a personal loan for the home renovation.

Home renovation: Choose these options

1. Home loan limit exhausted: When you have raised a home loan to purchase a property, and there is no more scope to get a top up on it. You can, in such a case, raise a personal loan to meet the deficit.

2. Raw house: If you have bought a house to stay or even to rent out, it needs to be in a condition to use. If you want to put the house for immediate use, you could raise a personal loan for this.

3. For renting: You have a house which you need to rent out, thereby giving you a steady income. But the house requires a few changes for which it needs to be renovated.

4. To woo a buyer: There is a house that you want to sell but it fails to draw interest from prospective buyers. As a result, you need to invest some money in its renovation. And if you fall short of funds, you can raise a personal loan for the same.

5. Shifting to a new house: Suppose you own a house in a different city and it remained unused for several years. Since you are now moving cities, you may now begin to use it again. But the house is quite dilapidated and requires some repairs. For such an urgency, it does not harm to rely on personal loan. 

(Note: Raising a loan comes with its own risks. So, due caution is advised)