A top-up on an existing home loan is typically the cheapest option, at close to the home loan rate over a long tenure. A dedicated home improvement loan sits slightly above it. An unsecured personal loan is the most expensive by several percentage points — worth it only for small amounts or where speed matters more than cost.
Before you borrow
- Compare the total payable, not the EMI — a longer tenure always looks cheaper monthly and costs more overall
- Check the processing fee, typically 1% to 3%, which is deducted before the money reaches you
- Ask whether prepayment is allowed and what it costs, since most personal loans are fixed rate
Run your numbers in the EMI calculator before you commit to anything.