Should You Use Personal Loans for Home Renovations

Some people find personal loans for home renovations to be daunting. They withdraw from the thought of personal loan as they are uneasy with the thought of high interest rates and debt. But if you don’t have the money for the home renovations, personal loan is one of the best solutions.

Personal loan for home renovations can be a help or a risk, depending on how and where you get the finance help from.  These three important questions will be answered below-

1. Is personal loan worth it for home renovations?
2. Banks for personal loans?
3. What are the alternatives for personal loan?

Is Personal Loan worth It for Home Renovations?

If your house is in need of renovations but you don’t have the finance, personal loan is a good option. There are banks that offer personal loan for low interest rates. These banks don’t take collateral as personal loan is considered an unsecured loan. The repayment tenure is quite flexible too. Most bank give 48 months for the repayment of the loan.

Interest rate depends on the bank you want to apply the loan in. Some bank charge interest rates as low as 2.99% while some charge more than 20%. That’s why research before applying for any personal loan.

Rather than avoiding the required renovation of your home, get a personal loan. It is better to repair the damages or it can cause further financial loss (if left as it is) in the future. You can pay back the loan steadily every month.

Some of the best personal loans for home renovations in UAE are-

ADCB Personal Loan

With ADCB personal loan, you can get finance up to 3 times your salary overdraft. You get up to 48 months to pay back the loan. The interest rate for this loan starts from 5.25% per annum. This personal loan comes with a free credit card.

An added benefit of this loan is the awarded touch points. For every AED 1000 of the loan amount, the customer gets 200 touch points if the loan amount is AED 1,500,000 and less. While the customer with AED 1,500,000 or more gets 300 touch points.

HSBC Personal Loan

HSBC personal loan offers finance amount up to AED 750,000 for UAE nationals. Expats can get finance up to AED 600,000. The interest rate on this loan starts from 7.49% p.a.

To be eligible for this loan, your age should be between 21- 65. You should also earn a minimum salary of AED 7500.

RAKBANK Personal Loan

The interest rate for RAKBANK personal loan starts from 5.99% p.a. Customers get up to 48 months for repayment tenor. But the Staff of Armed force get up to 60 months as repayment tenor.

Customers of the RAKBANK personal loan also get free debit card, cheque book and credit card. The credit card comes with no annual fees and low interest rates.

FAB Personal Loans

FAB personal loan offers finance up to AED 5,000,000. The repayment term for this loan is 60 months for the staff of the armed forces and 48 months for others. FAB personal loan also offers comprehensive coverage of personal life insurance.

To apply for FAB personal loan, the applicant should be 21 years and above and have a minimum salary of AED 7000 per month. The applicant must also be an employee of a reputable company, government or semi-government.

Noor Bank Personal Loans

The applicant for Noor Bank personal loan should be 21 years or above. The minimum salary required for this loan is AED 8000. The repayment tenor is 48 months. Noor bank also offers a free credit card with this loan. The free credit card has lifestyle benefits worth AED 50,000.

What are the Alternatives to Personal Loan?

1. Credit Cards- You can pay for the renovation of your home by using your credit card. Credit card can be good option if you can pay off the debt in a short amount of time. Although credit card is a good option, it comes with its own set of risks too. If you are late in paying your bill, you will see a rise in your interest charge every few months. Also, this delay in payment of your credit card bill and the debt can affect your credit Score too.
2. Savings- You can save up the money to renovate your home. Your savings will have no interest charges or any other fee. The only downfall is that it can take a long time to save up the money for the renovations.

In conclusion

Personal loan for the renovation is a good option. You can easily pay back the loan on a monthly basis. Note that one of the most important factors that can affect your application for the personal loan is your credit score. Make sure to always maintain a good credit score. Credit score can affect your loan amount and the interest rates.