A home renovation often begins with a simple plan but quickly turns into a major financial commitment. Waterproofing, electrical repairs, flooring, kitchen upgrades and structural work can push the final cost far beyond the original estimate.
The best home improvement loans in India can help spread this cost over several years without using your entire savings. However, the lowest advertised interest rate does not automatically make a loan the best choice. Borrowers must also compare the repayment tenure, processing fee, funding limit, prepayment rules and expenses covered by the lender.
Here are five home renovation loans worth comparing in 2026. The selection is based on official lender information, borrowing flexibility and suitability for different renovation requirements.
How We Selected These Home Improvement Loans
The lenders were compared using practical factors that directly affect the total borrowing cost:
- Applicable interest-rate structure
- Maximum loan amount or funding percentage
- Repayment tenure
- Processing and prepayment charges
- Renovation expenses covered
- Disbursal conditions
- Suitability for salaried and self-employed borrowers
- Flexibility for new and existing customers
The rate finally offered to you may depend on your credit score, income, existing EMIs, loan amount and property assessment. A stronger credit profile may help you qualify for more favourable terms, but approval rules differ across lenders.
1. Bank of Baroda Home Improvement Loan
Bank of Baroda offers a dedicated home improvement loan for repairing, renovating or upgrading an existing house or flat. It is a practical option for borrowers who want a traditional property-backed loan with a clearly defined loan limit and repayment period.
The loan is available for up to ₹50 lakh, subject to eligibility. Its maximum tenure is 15 years, including a moratorium of up to six months. The interest rate is floating and linked to the bank’s repo-linked lending rate, which means benchmark changes may affect the EMI or repayment tenure.
A useful feature is its wide coverage. The loan can be used not only for repairs and renovation but also for eligible furniture, fixtures, furnishings and household gadgets. Resident Indians, NRIs, PIOs and OCIs may apply, subject to the bank’s conditions.
Why consider it
- Loan amount of up to ₹50 lakh
- Repayment tenure of up to 15 years
- Moratorium of up to six months
- Covers several renovation and furnishing expenses
- Available to resident and eligible non-resident borrowers
Points to check
The mortgaged property must be insured, and the applicable rate depends on the loan amount and credit profile. Since the rate is floating, the EMI or loan tenure may change when the benchmark rate changes.
Best suited for: Borrowers seeking a dedicated secured renovation loan with broad expense coverage.
2. HDFC Bank House Renovation Loan
HDFC Bank’s house renovation loan is suitable for homeowners who want flexible interest-rate options from a large housing finance provider.
Its published home-loan rates apply to house renovation and home extension loans as well. The official rate page currently shows rates starting from 7.75% per annum, although the actual offer depends on the borrower’s profile and loan terms.
HDFC Bank offers an adjustable-rate option and a TruFixed option. Under TruFixed, the rate remains fixed for an initial period before converting to an adjustable rate. This may appeal to borrowers who want some initial repayment stability without choosing a fully fixed-rate product.
Why consider it
- Competitive starting interest rate
- Adjustable and TruFixed rate options
- Suitable for planned renovations and home extensions
- Established housing-loan servicing network
- Useful for borrowers who value rate flexibility
Points to check
The advertised starting rate is not guaranteed for every applicant. Ask for the applicable rate, spread, processing fee, tenure and total repayment amount in writing before accepting the loan.
Best suited for: Borrowers who want a choice between floating and partly fixed interest structures.
3. Kotak Mahindra Bank Home Renovation Loan
Kotak Mahindra Bank stands out for its longer repayment tenure and high funding percentage for eligible renovation requirements.
The lender states that it may finance up to 90% of the renovation requirement. Funding may reduce for higher loan amounts: the official product page mentions up to 80% funding for amounts between ₹35 lakh and ₹70 lakh and up to 75% for amounts above ₹75 lakh.
Because the lender may not finance the entire renovation cost, calculate the margin money in a loan before applying. This is the portion of the renovation budget that you may need to arrange from your own savings.
The maximum repayment tenure is 25 years, subject to the borrower’s profile and retirement age. Its published processing fee ranges from 0.25% to 2% of the loan amount. The page also states that no prepayment charge is levied on this loan type.
Why consider it
- Funding of up to 90% of eligible requirements
- Repayment tenure of up to 25 years
- Nil prepayment charges as stated on the product page
- Available to individual and joint property owners
- Useful for larger renovation projects
Points to check
A longer tenure reduces the EMI but increases the total interest paid. Compare multiple tenure options instead of automatically selecting the longest one.
Best suited for: Borrowers who need a longer repayment period or want to finance a large portion of renovation costs.
4. PNB Housing Home Improvement Loan
PNB Housing offers home improvement loans to both new and existing customers, including salaried professionals, self-employed people and small business owners.
The loan can cover complete renovation, internal and external painting, waterproofing, roofing, fixed woodwork, flooring, plumbing and electrical work. It is therefore suitable for borrowers planning a mix of cosmetic and essential repairs.
PNB Housing follows a floating interest-rate structure. The applicable rate varies by credit score, employment type and loan amount. Its official rate card provides separate slabs for salaried and non-salaried borrowers, which makes it important to check the rate matching your exact profile rather than relying only on the headline starting rate.
Why consider it
- Available to new and existing customers
- Covers a wide range of repair and renovation work
- Separate options for salaried and self-employed applicants
- Credit-score-based rate structure
- Top-up option available for eligible customers
Points to check
Applicants with weaker credit scores may receive a significantly higher interest rate. Check the complete annual borrowing cost, including processing, legal, technical and administrative charges.
Best suited for: Borrowers who want broad renovation coverage and profile-based lending options.
5. ICICI Home Finance Renovation Loan
ICICI Home Finance can be considered for higher renovation requirements and borrowers with different income profiles.
Its official product page states that eligible salaried and self-employed applicants may receive a loan of up to ₹5 crore, subject to internal assessment. It also accepts professionals, freelancers, traders and business owners with consistent income.
A major practical point is stage-wise disbursal. Funds are released according to the actual progress of the renovation rather than necessarily being paid in one lump sum. This can help control spending but requires proper planning with the contractor.
The lender covers structural repairs, extensions, plumbing, electrical upgrades, flooring and wall refurbishment. Movable furniture and appliances are not covered.
Why consider it
- Loan amount of up to ₹5 crore for eligible borrowers
- Suitable for salaried, self-employed and professional applicants
- Covers structural and major renovation work
- Joint applications are permitted
- Funds are released according to renovation progress
Points to check
The official page shows a non-refundable login fee starting from ₹3,000 plus taxes and a processing fee ranging from 0.5% to 3% plus taxes. Stage-wise disbursal also means you may need contractor estimates, technical checks and progress verification.
Best suited for: Borrowers planning large or structural renovations that require phased funding.
Comparison of the Best Home Improvement Loans in India
| Lender | Best For | Loan Amount or Funding | Maximum Tenure | Key Feature |
|---|---|---|---|---|
| Bank of Baroda | Dedicated secured renovation finance | Up to ₹50 lakh | 15 years | Six-month moratorium and broad expense coverage |
| HDFC Bank | Flexible rate structure | Based on eligibility | Product-specific | Adjustable and TruFixed options |
| Kotak Mahindra Bank | Longer repayment tenure | Up to 90% of eligible requirement | 25 years | Nil prepayment charge stated on product page |
| PNB Housing | New and existing customers | Based on eligibility | Profile-based | Broad repair and renovation coverage |
| ICICI Home Finance | Higher renovation requirements | Up to ₹5 crore | Profile-based | Stage-wise disbursal |
Rates, fees and eligibility were reviewed in June 2026. Lenders may revise their terms at any time.
How to Choose the Right Home Improvement Loan
Do not select a house renovation loan only because its starting rate looks lower. The following checks can prevent an expensive borrowing decision:
- Prepare a realistic renovation budget: Include labour, materials, professional fees and a contingency amount for unexpected work.
- Compare the personalised rate: Advertised rates are generally reserved for applicants with strong credit and income profiles.
- Calculate the total interest: Use the loan EMI calculator to compare the monthly EMI, total interest and total repayment under different loan amounts and tenure options.
- Check all charges: Include processing, login, legal, technical inspection and property valuation fees.
- Confirm covered expenses: Some lenders cover fixed fittings but exclude furniture, appliances or decorative purchases.
- Review disbursal rules: Find out whether the amount will be released at once or according to construction progress.
- Check prepayment conditions: Flexible prepayment can help you close the loan sooner and reduce interest.
- Keep a renovation buffer: Avoid borrowing the full estimated cost without keeping money for overruns.
- Read the sanction letter: Verify the rate type, benchmark, spread, reset frequency and penalties before signing.
After fully repaying or foreclosing the loan, collect the closure letter and NOC after loan closure. Also confirm that the lender’s charge on the property has been removed and the loan is correctly reported as closed.
The right loan should offer an affordable EMI without making the total borrowing cost unnecessarily high.
Can You Claim Tax Benefits on a Home Improvement Loan?
Interest paid on money borrowed for repairing, renovating or reconstructing a house may qualify for a deduction under Section 24(b), subject to the current tax rules.
For a self-occupied property, the interest deduction for repair or renovation generally falls within an overall limit of ₹30,000, subject to applicable conditions. The higher ₹2 lakh limit is linked to qualifying loans used for purchasing or constructing a property, not routine renovation.
Tax treatment can differ for let-out property and may also depend on the tax regime selected. Keep the loan statement, interest certificate, contractor invoices and proof showing that the funds were used for the house.
Because tax rules and individual circumstances differ, verify your eligibility with a qualified tax professional before claiming a deduction.
Before taking a large property-linked loan, also consider how your family would repay it if the main borrower died or lost the ability to earn. Understanding home loan insurance plans can help you compare loan-specific protection with your existing term insurance.
Conclusion
The best home improvement loans in India are not necessarily those showing the lowest headline rate. The right choice depends on your renovation budget, credit score, repayment capacity and the type of work being financed.
Bank of Baroda offers a clearly structured secured renovation product, HDFC Bank provides flexible rate options, Kotak offers a longer repayment tenure, PNB Housing covers a wide range of repair work, and ICICI Home Finance is suitable for larger projects with phased disbursal.
Compare the personalised interest rate, total repayment, fees and covered expenses before applying. A well-selected home renovation loan should improve your house without putting unnecessary pressure on your monthly finances.
FAQs
Which bank offers the best home improvement loan in India?
There is no single best lender for every borrower. Bank of Baroda may suit borrowers seeking a dedicated secured loan, Kotak may work for a longer tenure, while ICICI Home Finance may be suitable for larger renovation requirements. Compare the personalised offer rather than only the advertised rate.
What is the current interest rate on a home improvement loan?
Home improvement loan interest rates vary by lender, credit score, income, employment type and loan amount. Some lenders publish starting rates, but the final rate is decided only after assessing the borrower and property.
Can a home improvement loan cover furniture and appliances?
It depends on the lender. Bank of Baroda allows certain furniture, fixtures and household gadgets, while ICICI Home Finance states that movable furniture and appliances are not covered. Confirm eligible expenses before applying.
Can I prepay a home renovation loan without charges?
Prepayment rules differ by lender, rate type and borrower category. Kotak’s current product page states nil prepayment charges for its home renovation loan, but borrowers should still verify the condition in their sanction letter.
Is a home improvement loan eligible for a tax deduction?
Interest used for repair or renovation may qualify under Section 24(b), subject to conditions. For a self-occupied house, the applicable deduction for repair or renovation is generally limited to ₹30,000. Check the latest rules and your tax regime before claiming it.
