A fresh coat of paint, better lighting, new flooring, maybe even a complete kitchen redo – all of it adds comfort and value to your home. But renovation is expensive. Even small upgrades can cost more than expected. And if you’re not ready to use up your savings, borrowing makes sense.

This is where a home renovation loan comes into the picture. It’s a way to get the funds you need without dipping into long-term investments or emergency savings. Here’s a closer look at the different types of loans you can consider for home repairs or upgrades. Each one suits a different need and budget.

Home Improvement Loan From a Lender

This is the most direct option if your goal is simple – renovate, repaint, or fix things around the house. A home renovation loan is designed exactly for that. Most lenders offer this as a personal loan tailored to home upgrades. You usually don’t need collateral unless you’re borrowing a large amount.

These loans work well if you already own the property and have a good CIBIL score. The approval depends on your income, credit history, and how much you want to borrow.

Top-up Loan on Your Existing Home Loan

If you already have a home loan and need funds for renovation, asking for a top-up can be a smart move. It’s often cheaper than taking a fresh personal loan. Since the lender already has your property details and repayment record, the process tends to be quicker and easier.

This works best when your original loan is in good standing, and your property has enough value left for an additional loan.

Taking a Personal Loan for Renovation

This is a flexible option and quite popular, especially when you need money quickly. A personal loan doesn’t require you to explain what you’re using it for. That means you can apply for Rs. 2 lakh and use it for bathroom upgrades, lighting, or furniture – no questions asked.

Many salaried people and even self-employed individuals prefer this for smaller renovation projects. Let’s say you plan to replace your kitchen fittings and upgrade some appliances. You could take a personal loan, repay it over 12 to 24 months, and avoid taking money out of your savings.

This is also where small personal loans are helpful. For projects under Rs. 1.5 lakh, applying for a large home renovation loan might not be necessary. A quick personal loan covers the cost and gets processed faster.

Loan Against Property

This one’s a bigger step and only makes sense when your renovation budget is high. Say you’re planning a major structural change or expanding your house, and the cost is over Rs. 10 lakh. You could consider a loan against property.

Here, you pledge your home or another property as collateral. Because the loan is secured, the interest rate tends to be lower. But keep in mind that the paperwork is heavier, and approval takes more time.

If you cannot repay, the lender has the legal right to sell your property. So, it’s not a decision to be taken lightly.

This could be a suitable option for someone redoing an entire bungalow or adding new rooms to a ground-floor home. But for mid-size work, it’s better to look at smaller loans.

Using Credit Cards for Minor Repairs

Not everyone needs Rs. 2 lakh for renovation. Maybe you just want to replace a geyser or fix the flooring in one room. For costs between Rs. 10,000 and Rs. 40,000, many people simply use their credit cards.

But don’t rely on this for big projects. The interest rates, if you don’t repay on time, are much higher than other loan options.

Government-Backed Schemes for Specific Cases

In some situations, you might be eligible for financial help under housing-related government schemes. These aren’t the most common routes for home renovation, but they do exist, especially for lower-income families, senior citizens, or rural households.

You won’t find this as an option in regular lending apps or websites. But if your household income is below a set limit or you’re renovating in a rural area, you can check with your local panchayat or urban housing board. The paperwork might be more than a personal loan, but the cost of borrowing is significantly lower if you qualify.

When Do Small Personal Loans Make More Sense Than Renovation-Specific Loans?

There are many cases where people apply for a home improvement loan, but they don’t really need something that formal. If your work is minor, like changing curtains, fixing lighting, or updating bathroom fittings, you can skip the renovation tag altogether.

In these cases, small personal loans are often a better fit. They’re fast, require minimum documentation, and don’t ask for property papers or estimates. Apps like Zype offer this kind of credit with flexible repayment terms and quick transfers, so you can start the work without delays.

Conclusion

Renovating your home is an investment – not just in the property but in your lifestyle. Choosing the right loan makes that process smoother, whether you’re updating one room or rebuilding half your house. You have choices. From full-fledged home renovation loans to flexible top-ups and secured options to quick personal loans, there’s something for every kind of budget. The key is knowing what suits your situation best.

Before you apply, look at how much you need, how quickly you can repay it, and what kind of repayment works for you. And always read the fine print. The right loan can help turn your ideas into action without becoming a financial headache.