Lending institutions give up to 90% of the project cost as home renovation loans. These loans are obtained for repairs or expansion of an existing property. Because buying a home  does not necessarily mean purchasing a new plot or a newly constructed house. You can go in for an already existing one. However, there is a probability that the property is not as per your requirements. It may need some urgent repairs, revamp, etc. This is where you can take a home renovation loan for upgrading the property as per your desire. 

Top Home Renovation Loan Lenders

Top Bank 

Interest Rates 

PNB Housing Home Renovation Loan 

8.75% to 11.15% 

HDFC Home Renovation Loan

8.50% to 9.00% 

Bajaj Finserv Home Renovation Loan 

8.50% to 14.00% 

Kotak Mahindra Home Renovation Loan 

8.85% to 9.40% 

Bank of Baroda Home Renovation Loan 

9.15% to 10.60% 


Features of A Home Renovation Loan

  • Loan Amount:  The loan amount can vary across banks and can range anywhere between INR 25,000 up to INR 50 lakhs. Most banks lend 70% to 90% of the loan amount for home renovation. This is subject to eligibility criteria, such as borrower’s income, LTV ratio, or margin. 
  • Margin: Banks charge 15% to 30% of the project cost as margin. This will depend on loans applied with or without security, applied with guarantor or co-applicant, and the repayment tenure. 
  • Repayment Tenure: The amount and repayment capacity on home renovation loans have a duration of up to 15 years, including a moratorium period, and up to 20 years without a moratorium period. Your relationship with the bank is very crucial. 
  • Processing fee: Home renovation loans come with a processing fee starting from 0.25% to 3% of the loan amount. But, some banks have waived this fee for borrowers employed in a government establishment. 
  • Pre-closure charges: Up to 4% on the fixed rate of interest.  Nil on floating rate of interest.
  • Credit score: Credit score is a very important criteria for home renovation loans. Banks consider individuals with a credit score of 700 and above as reliable borrowers. But, those with a credit score equal to or below 600 or Nil can also apply for home renovation loans. They will be approved depending on the relationship with the bank. 
  • Concession on Interest Rate: Most banks provide women borrowers with concession rates of 0.05% to 0.10% if the women are house owners or joint owners. Some banks also provide a discount up to 0.10% for refurbishing a green building.
  • Moratorium Period: Home renovation loans come with a moratorium period between 3 to 6 months.  
  • Guarantor: A guarantor is a person who guarantees to make the payments if the primary applicant does not pay the EMI. The guarantor will have to submit documents like proof of income, address proof, and identity proof. 
  • Security or Collateral: Home renovation loans do not need security or collateral unlike home loans for construction or buying a plot of land. However, for a higher loan value, banks may ask you to pledge a security as collateral. This is usually the claim to your property. Security can also be pledged against premiums paid to National Savings Certificate (LIC), Life Insurance Corporation (LIC), Kisan Vikas Patra (KVP), and mutual funds. These secured loans attract lower interest rates, and applicants will have to produce assets and liabilities statements to the bank. 
  • Co-applicant: A co-applicant is optional. But, loans applied to along with a co-applicant accrue a lower rate of interest. An individual must be above 18 years of age to be a co-applicant. The person has to submit his or her proof of income, address, and identity. 
  • Insurance Cover: It is recommended to add insurance cover on renovation loans, and such an insurance is similar to the home loan scheme. Borrowers will have to pay the premium amount directly to the insurance provider during the duration of the loan. 

Here Is A List of The Best Home Renovation Loans in 2023 

PNB Housing Home Renovation Loan


  • PNB Housing offers loan amounts up to 90% of the market value of the property. 
  • Interest rates are in the range of 8.75% to 11.15% per annum for salaried applicants and professionals. 
  • For businessmen, the interest rates range from 8.75% to 11.15%. 
  • There is no upper cap on the amount available as a home renovation loan. 
  • The maximum repayment tenure available is 30 years (Property should be mortgaged to avail of this facility)

Bank of Baroda Home Renovation Loan 

  • Loan amounts upto Rs. 1 crore in semi-urban centers, Rs. 5 crores in metropolitan cities, and Rs. 10 crores in Mumbai. 
  • A moratorium period of 36 months is provided on these loans with the maximum repayment tenure being 30 years. This is including the moratorium period
  • Interest rates are linked to MCLR
  • No foreclosure charges were levied by the bank.

Bajaj Finserv Home Renovation Loan

  • Loan amounts up to Rs. 25 lakhs 
  • The maximum repayment tenure is 60 months. 
  • Minimal processing time for applications as it is an unsecured loan
  • Minimal documentation. 
  • Interest rates range from 8.50% to 14.00% per annum onwards 
  • Processing fees of 0.50% of the loan amount. 

HDFC Bank Home Renovation Loan 

  • Interest rates range between 8.50% to 9.00% onwards for women applicants 
  • interest rates range between 8.50% to 9.00% onwards for other applicants
  • The maximum loan-to-value ratio is 90% for properties up to a value of Rs. 30 lakhs 
  • The maximum loan-to-value ratio is 80% for up to Rs. 75 lakhs 
  • The maximum loan-to-value ratio is 75% for 75 lakhs or more. 
  • The maximum repayment tenure available is 15 years. 

Kotak Mahindra Bank Home Renovation Loan

  • The maximum repayment tenure is 15 years
  • The amount available is based on the value of the property
  • LTV ratio can go up to 90% of the value of the property
  • Interest rates are linked directly to the MCLR.


If you desire to renovate/repair/refurbish the structure of your existing property, a home improvement/renovation loan is the apt product for you. So, take one and reap the benefits. 

FAQS Top 5 Home Renovation Loans For 2023 in India

1:What type of interest rates are offered on home renovation loans?

Most banks offer floating rate of interest on home renovation loans but some banks provide fixed rates. 

2:Is the home renovation loan tax free?

With a home renovation loan, you will get a tax benefit on the interest component of the loan. You will get a deduction of Rs. 30,000 per annum on the interest that you pay for these loans (under section 24).