As your family grows and sharing rooms is no longer comfortable, you can either change your house or consider extending it. The home extension process allows you to add more space and amenities with growing needs.
However, extending your home can be a huge expense that can rapidly exhaust your savings. Therefore, instead of denting your hard-earned savings, the better way to finance a house extension is by availing of a home extension loan.
What is a home extension loan?
Home extension finance or loan help you expand your existing house by adding another room, garden, balcony or even a floor. These loans are different from home improvement loans that are meant for renovations, repair and refurbishment of your house.
House extension loans generally cover 70% to 90% of the construction cost, which can be a huge amount. You can either apply for a home expansion loan as an individual or along with some other family members as your co-applicants.
Benefits of taking a home extension loan
Here are some of the advantages of taking a loan for home extension:
Easy documentation process
There is minimal documentation for home expansion loans, and the process is hassle-free. You have to submit some necessary documents that prove home loan eligibility.
- Photo identity proof (Voter ID /Passport/Driving License/ Aadhaar card)
- Address proof (Ration Card/Electricity Bill/ Passport)
- Bank statements for the last three months
- Employment certificate stating two years of continuous employment
- Salary slips for the past three months
According to Section 80C, the principal repayment amount on house extension loans is eligible for a tax deduction up to Rs. 1,50,000. If the home is self-occupied, the interest payments are also eligible for tax deduction up to Rs. 2 lakhs per annum (Section 24). Also, there are no hidden costs on house extension loans, making them more affordable and convenient.
The repayment tenure for paying off a home loan for house expansion depends on the borrower’s age and repaying capacity. Financial institutions offer flexible EMI payment plans to help you in the repayment process. Thus, you can choose the repayment method that suits you and pay off the loan with ease.
Low processing fee
The processing fee charged by the lender is minimal in case of house extension loans. Hence, you don’t have to spend much on availing it and can direct the funds you save towards building your sweet abode.
Taking a house extension loan can help your growing family and their needs without compromising on space. It is an ideal way to finance your home extension and equip your existing house with the required facilities.
A few lending institutions let you apply for this loan online. If you are not sure about the loan amount and subsequent EMI you can afford, calculate it by using a home loan EMI calculator available on a lender website.