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Golden Rules to Follow When Taking a Personal Loan for Home Renovation

Clix February 10, 2021


A personal loan can come to your aid when you face a financial crunch and need money or financial help urgently. You can use a personal loan for any purpose of your choice, such as travel, taking care of medical expenses, expenses for education, wedding expenses, or home improvement. Even if you are short of finances, a home renovation loan can fund your home improvement or expansion plan without much ado.




With advancements in technology, applying for a personal loan and getting funds is now a matter of minutes. You can apply for a loan online right from the comfort and privacy of your home and use the funds the way you like.

Here are a few golden rules to follow when taking a personal loan for home renovation.

Opt for the Shortest Loan Tenure

Many borrowers tend to choose a longer loan tenure because of the lower amount to be paid as EMIs. But by doing that, they end up paying a much higher amount to the lending institution than the amount they borrow in the form of interest payments. When you keep the loan tenure short, the EMIs may be higher, but you will repay your loan much earlier and pay less towards interest amount on your principal loan amount.

Borrow Minimum Amount Required

Although online lenders have made the borrowing system easier and faster than before, it doesn’t make sense to take a loan when you don’t have a need for such an amount or to apply for a bigger amount than you actually require. You may be happy to take surplus funds as a loan, but repaying it may prove to be a hassle. If you are taking a loan for home renovation, calculate the amount you would need for the project and borrow funds accordingly.

The amount you borrow has a direct impact on your EMIs. So, it’s best to borrow an amount that you can repay easily. Ideally, your EMIs should not be more than 20-30% of your monthly earnings, you should have enough money to meet your household expenses after paying your EMIs.

Don’t Skip on Repayments

Delayed or missed loan repayments are considered as indiscipline, as a result of which you may end up paying penalties and adversely affecting your own credit score. Your credit score is the representation of your financial history and your creditworthiness. Check your Experian credit score here for free and see where you stand. Late EMI repayments reduce your credit score and affect your future borrowing capability. So, always be on time with your EMIs.

Do your research

You will find several banks, NBFCs, and money lending institutions offering attractive personal loans with one lucrative feature or the other. But the charges and rates may vary from one lender to the other. You need to choose a lender that has an easy loan application and approval process with the favorable eligibility conditions and documentation requirements.

At Clix Capital, we offer personal loans up to ₹ 25 lakhs for a loan tenure ranging from 12 months to 48 months. You can apply for the loan online for your home renovation project and get funds in as less as 15 minutes!*

Calculate the EMIs Before Applying

Use a Personal Loan EMI Calculator to calculate your EMIs with just a few clicks. Doing that in advance can give you an estimate of your loan EMIs so that you can ascertain how the loan will affect your monthly budget. You can check different loan amounts, loan tenures, and interest rates using an EMI calculator and choose the one that best suits your financial standing.

Understand the Terms and Conditions Properly

If you find a good loan offer, don’t be in a hurry to sign in it quickly. Don’t accept a loan offer without reading all its terms and conditions carefully, especially the fine print written on the sides or at the bottom. The words written in the agreement are very important and help you understand the terms and conditions of the loan. Not understanding them properly may bring surprises in the future, often in the form of unexpected penalties and charges.

Repay Your Existing Loan Before Applying for Another

Applying for personal loans one after the other without repaying the previous ones indicates that you are credit hungry and may lack financial stability. As a result, the lenders may end up rejecting your loan application, thereby bringing down your credit score to affect your borrowing capability in the future.

Check the Eligibility Conditions Before Applying

Whenever you apply for a loan and it gets rejected, it gets recorded in your credit report and affects your credit score. Loan rejections may make other lenders wary and make them to think twice before approving your loan. Applying for a loan and getting rejected just because you were not eligible is the worst situation to be in. So, it’s better to check the lender’s eligibility conditions and apply for their loan only after ensuring that they don’t have a reason to reject your loan application.

Keep Documents Ready

Earlier, you had to procure and submit a whole bunch of documents to the lenders to get small loan approval. But these days, NBFCs have made it easier for borrowers by minimizing their documentation requirements. They ask only for a few documents that are really needed to establish a borrower’s identity and repayment capacity. So, it’s best to go through the list of documents they want to see and keep them ready at the time of loan application. Some of the documents that lenders want to see for a personal loan include the following:


    • Duly filled online application form
    • Recent passport size photograph
    • Identity proof like Aadhaar card or Pan card, or government ID for government employees
    • Address proof like Aadhaar card, voter ID, passport, driving license, etc.
    • Income proof, including your last month’s payslip or current year’s Form 16


Planning a home renovation or expansion? Apply for a personal loan with Clix Capital and complete your project without any financial crunch.


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You can also reach out to us at or call us at 1800 200 9898

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