Unforeseen repairs and costs can pop up, causing undue financial stress. Similarly, routine maintenance and renovations require substantial funds. With home renovation loans in the UAE, it is time to upgrade your house just the way you like. But how do home renovation loans work exactly?
Scroll down to learn A-Z of home renovation loans so you don’t have to wait any further for funds.
Overview of Home Renovation Loans
From minor repairs to complete renovations, saving funds until your next renovation can be a headache. Besides, you have to be careful about such home renovations that decrease the property’s value. Why not apply for a home improvement loan in the UAE? With this loan, homeowners can renovate, upgrade furniture and repair a house.
These loans are offered by a few banks in the UAE such as HBSC. On the other hand, there are a few other ways of home renovations, like top-up loans.
Types of Home Renovation Loans
Some banks offer a home improvement loan directly intended for renovations. However, in other cases, homeowners opt for other financing options like top-up loans, personal loans and more. Let’s discuss the most common home renovation loan types:
1. Personal Loans
As personal loans are meant for diverse uses, one common use is for home renovation projects. Following the eligibility conditions results in fast approval for personal loans. However, the only drawback is that these loans come with higher interest rates.
2. Home Equity Loans
It is the loan against property which means borrowers can apply for a loan against their equity share in a property. With low interest rates, these loans are easy to return. However, in case of non-payment of dues, the bank has the right to seize the property.
3. Home Improvement Loans
Dreaming of revamping your bedroom or dining room but don’t have enough funds? Apply for a home improvement loan and fulfil your dream without breaking the bank.
4. Top-Up Loan
Those who already have a loan with a bank can apply for a top-up loan. This means that they can borrow a little extra to cover small costs like repairs. With flexible repayment terms and low costs, this loan type is beneficial in the long term.
Home Improvement Loans
Home improvement loans are specifically designed for home upgrades and repairs. These loans offer flexibility, making them affordable for borrowers. Let’s go through the eligibility criteria and process for home improvement loans in the UAE.
Eligibility Criteria
A common question that appears is, ‘How do home renovation loans work?’. Well, the process is quite straightforward. Simply choose your desired bank, confirm your eligibility, and apply for a loan. Here are the general eligibility conditions which may vary by bank:
- Must be a UAE national or resident
- Aged between 21 and 65
- Monthly income of AED 7,500 per month
Application Process
Apply directly through the chosen bank’s website or visit in person for an application. You can also apply through an independent advisor like Mortgage Finder. It helps you connect with leading banks in the UAE and choose the best interest rate.
Benefits of Home Improvement Loans
Home improvement loans benefit a homeowner in many ways. Here are some notable benefits of home improvement loans in comparison to other options:
- Whether you have a minor revamping or a large renovation, these loans work just the right way. These loans can finance bigger projects as compared to home top-up loans.
- With fixed payments, borrowers enjoy great flexibility without having to worry about fluctuations.
- Interest rates are lower on these loans as compared to personal loans. Additionally, they are less riskier in comparison to home equity loans.
- Getting a home improvement loan is generally easier for expats and nationals.
- These loans are approved quicker than other loans like home loans.
Top Banks
The UAE has multiple banks offering home renovation loans. Here are a few of the top ones that you can consider:
- HSBC
- ADIB
- FAB
- Dubai Islamic Bank
- Reno
FAQs
Getting a home renovation loan is a quick and straightforward process. Simply choose a bank, apply for a home loan, submit the documents and wait for approval.
It is quite easy and you can use Mortgage Finder to check affordability. This helps you identify how much you can borrow in the UAE.
The interest rate varies by bank and time. However, an estimated rate is 7% for HSBC Bank.
We must have answered your question about ‘how home renovation loans work in the UAE’. Whether it is a furniture upgrade or a balcony addition, apply for a loan and make it possible.
For buying a property as an expat, learn about home loans in the UAE for expats. For more helpful property guides, stay tuned to the Property Finder blog.
