Renovating or giving an interior design to your house can bring about a complete change in your living area, but on the other hand, it will need a carefully planned budget. People usually compare the two main ways to finance it: personal loans and home loans (mainly home improvement or home renovation loans).
Nonetheless, which one would suit interior design better? The reply depends on your requirements, finances, timeliness, and repayment style.
Let us break it down into simpler words,
Understanding the Two Loan Options
1. Personal Loan
A personal loan is somewhat of a non-secured loan that does not require any property or collateral. You can spend it on interior design, furniture, painting, false ceiling, modular kitchen, or anything else.
Main Features,
- No collateral needed
- Quick processing
- Flexible usage
- Higher interest rates
2. Home Renovation/Home Loan
A home loan for renovation is a secured loan, backed by your property. It is specifically meant for home upgrades and large-scale interior projects.
Main Features,
- Lower interest rates
- Longer tenures
- Requires property documentation
- Slower approval compared to personal loans
Comparison Table: Personal Loan vs Home Loan for Interior Design
| Factor | Personal Loan | Home Loan for Renovation |
| Need for Collateral | No | Yes (property) |
| Interest Rates | Higher (10%–24%) | Lower (7%–10%) |
| Approval Speed | Fast (24–48 hours) | Slow (up to a week or more) |
| Documentation | Minimal | Extensive |
| Loan Amount | Moderate | Higher loan limit |
| Flexibility of Use | Very flexible | Limited to home improvement only |
| Best For | Quick + mid-size interior work | Large-scale renovation projects |
When Is a Personal Loan Better for Interior Design?
A personal loan is a good option if,
- Your interior design project is small or medium-sized
- You need the money immediately
- You would rather not offer your house as collateral
- You want total discretion in spending on décor, appliances, or furniture
- You want a simple, quick, digital process
For example, if you plan to have a modular kitchen, repaint your house, change lighting and buy furniture within ₹1–5 lakhs, taking a personal loan is usually the quickest and simplest option.
When Is It Good to Use a Home Loan for Interior Design?
A home loan is a better choice if,
- Your interior work needs a big budget (₹10 lakh+)
- You want lower interest rates and stable EMIs
- You’re okay with providing property documents
- You are doing a big structural renovation
- You want a long period for easy repayment
For example, if your interiors involve changing floors, rewiring, carrying out major landscaping, plastering the entire house, and cabinetry in the whole house. Then a home renovation loan might be the overall cheaper option.
Which One Saves More Money?
Home Loan = Lower interest, higher savings
Since home loans are collateralised, the interest rates are significantly lower. This can lead to substantial savings if done over a long period.
Personal Loan = Saves time but costs more in interest
If your project is urgent, a personal loan might be the best option despite the slight increase in cost.
Which Option Offers Better Flexibility?
Personal Loan Wins
The money can be spent in any way you want, on decoration, electronics, contractors, carpenters, designers, or even for emergency adjustments. Whereas a home loan usually requires documentation that the money is used exclusively for the renovation project.
Conclusion
Both personal loans and home renovation loan for interior design are suitable choices, but the right choice depends on your project size, urgency, and flexibility needs. A personal loan is frequently the more sensible choice if you want fast disbursal, little paperwork, and total flexibility to use the money for anything from décor to furniture.
This is made even simpler by digital lending platforms such as Olyv, which facilitate quick, flexible personal loans that are easily utilised for interior design and home remodelling. Olyv’s easy digital process guarantees that you receive quick, clear financial assistance, regardless of whether you’re improving a single room or your entire living area.
