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What is the Difference Between Home Renovation Loan and Home Extension?

Published on Sept 15, 2022Updated on Nov 30, 2023

What is the Difference Between Home Renovation Loan and Home Extension?

We all wish to have a place to come back to at the end of the day. For most people, it is their home.

It is normal to want change, thus many people who have already purchased a house wish to make changes to the same. In some cases, people renovate the house whereas if a person’s family expands then people increase the size of their house, or renovate their homes to make them more suitable to their needs. To help you with the same, 2 new products – home renovation loan and home extension loan have been introduced.

Let us understand each financial product in depth.

What is a Home Renovation Loan (Also known as a Home Improvement Loan)?

With changing times, our tastes, styles, and personalities keep upgrading. To keep up with the same, people renovate their homes. After all, your home is a reflection of you. As exciting as it sounds, it is also an expensive affair and to help you with the same, the introduction of a home renovation loan took place. This type of loan helps you with financial support for remodelling, refurbishing or renovating your house. A home renovation loan is basically a personal loan for just painting, flooring, waterproofing, plumbing, and other such work. Like other personal loans, this loan is disbursed depending on the applicant’s eligibility and can be repaid within 12 to 60 months.

What is a Home Extension Loan?

As years pass by, your family grows, people require personal space, and so on. To deal with the same, instead of switching homes which is a tedious process you can just extend your house. With the finances provided under the home extension loan, you can make any structural changes to any existing living space.

Must Read: 5 Tips to Save Money While Renovating Home

Now that we have understood these 2 financial products, let us understand the difference between a home renovation loan and a home extension loan.

Home Renovation Loan V/S Home Extension Loan

Description Home Renovation Loan Home Extension Loan


A home renovation loan is taken up by a borrower when they wish to upgrade their house as per their taste, and style. It reflects one personality and gives them a sense of comfort in their own house.

A home extension loan is taken up to extend the space in one’s house. It happens mostly in the case of growing families, children, and more such cases.


In a home renovation loan, the house is rebuilt as per the owner’s requirements.

In a home extension loan, the house is not re-built. The extended part of the house is built for the first time.

Structural changes

In this loan, there are no structural changes taking place in the house.

In this loan, structural changes are conducted like building a balcony, connecting two floors or adding a new room, and so on.

Personal loan

Under a home renovation loan, the money can be taken up and used as a personal loan. Activities such as flooring, waterproofing, and repairing fall ceilings can be done.

A home extension loan can be taken up only when the borrower wishes to conduct construction work and extend the living space of his/her house.

In case of minor expenses, one can take up a personal loan for home renovation and home extension. The requirements of documents for a personal loan are minimal and the process is simple to follow. To have a better understanding of your finances you can make use of a personal loan EMI calculator.


To have a smooth journey ensure that you have all your documents, finances, and liabilities in check. Having a good credit score goes a long way in saving money on interest payments. In the end, your home is your comfort. Build it and decorate it the way it soothes your heart. To apply for a home improvement loan from SMFG India Credit, please click the “Apply now” button on this page.

* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us

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