What You'll Learn
- Whether a home loan can pay for interiors, a modular kitchen and furniture, from lenders' own terms checked on 31 October 2026
- The loan limits, margins, tenures and rates for interiors and home decor loans
- The documents lenders ask for, including the contractor's quotation
- A worked example comparing three ways to fund ₹8 lakh of interiors
Yes, you can borrow for flat interiors in India, but usually not the whole bill. On lenders' terms checked on 31 October 2026, one public-sector bank lists furnishings and interiors as an eligible purpose for a home loan, and dedicated home improvement or home decor loans fund about 75% of the estimate, with you paying the other 25% upfront. Rates ran from 7.40% on a public-sector bank's repair and renovation grid to 9.46% on a private bank's interiors loan. This guide comes from MoneyKarma, India's home loan platform with 90+ lenders. Not a lender.
Key takeaway: On a ₹6 lakh interiors loan over 10 years, 7.50% means an EMI of ₹7,122 and 9.46% means ₹7,751. Stretching the same ₹6 lakh over 20 years inside your home loan lowers the EMI to ₹4,834 but adds about ₹3.05 lakh of interest.
Can a home loan cover interiors and furnishing?
Sometimes, and it depends on the lender and on what you're buying. Here is what lenders' own pages and terms showed on 31 October 2026. Lenders aren't named.
- A public-sector bank's home loan terms say the loan can be sanctioned for buying, building, extending or repairing a home, and for furnishings and interiors. Its home loans start at 7.50% from 15 October 2026.
- A second public-sector bank lets furnishing and interiors be added to the cost of the house or flat, on the condition, as printed, that a maximum 15% of the cost of furnishing and interiors may be added, up to ₹50 lakh, with the loan still held to the usual loan-to-value limit.
- A third public-sector bank runs a separate home improvement loan for repairs and renovation and also for furniture, fixtures, furnishings and gadgets such as fans, geysers, air conditioners, water filters and air purifiers.
- A fourth public-sector bank's home decor loan covers drawing room furniture, kitchen equipment, air conditioners, curtains, cupboards and carpets, but lists consumer durables as an exception.
- A private bank's interiors loan covers furnishing, solar systems, modular kitchens and interior works for newly bought, constructed or future homes.
So a modular kitchen, wardrobes and fixed fittings are the easiest to fund. Loose furniture and appliances are covered by some loans and excluded by others, so ask before you sign with a carpenter.
How much can you borrow for interiors?
About three-quarters of the estimate, within each lender's cap.
| Lender type | Loan type | Maximum loan | Your share | Longest repayment |
|---|---|---|---|---|
| Public-sector bank B | Home improvement loan | ₹50 lakh | 25% of project cost | 15 years, including moratorium |
| Public-sector bank D | Home decor loan | ₹15 lakh (minimum ₹25,000) | 25% of cost | 108 EMIs |
| Private bank | Interiors loan | ₹1 crore | 25% of estimate | 120 months |
| Public-sector bank C | Added to the home loan | Within the home loan's LTV limit | As printed above | Home loan tenure |
The 25% share is the margin. You pay it to the contractor yourself, and the lender funds the rest against the estimate. For the home loan itself, RBI's loan-to-value limits still apply: 90% of value for loans up to ₹30 lakh, 80% above ₹30 lakh to ₹75 lakh and 75% above ₹75 lakh. Check your overall limit on MoneyKarma's home loan eligibility page.
What interest rate do interiors loans charge?
Rates are floating and linked to the RBI repo rate, which is 5.50% after the 7 October 2026 increase. From lenders' pages checked on 31 October 2026:
| Lender type | Product | Rate shown |
|---|---|---|
| Public-sector bank A | Home loan, salaried, credit score 800 and above | 7.25% |
| Public-sector bank E | Home, repair and renovation loans, salaried, score 825 and above | 7.40% |
| Public-sector bank S | Home loan card rate (interiors an eligible purpose) | From 7.50% |
| Public-sector bank B | Home improvement loan | Repo-linked rate minus 0.70% to plus 1.05% |
| Public-sector bank D | Home decor loan | Linked to its repo-linked rate of 8.35% |
| Private bank | Interiors loan | From 9.46% |
The cheapest money for interiors is usually inside a home loan, because home loan rates sit below most standalone loans. Per ₹1 lakh over 10 years, the EMI is ₹1,174 at 7.25%, ₹1,187 at 7.50% and ₹1,292 at 9.46%. Compare current home loan offers on MoneyKarma's home loan interest rates page.
A worked example: ₹8 lakh of interiors for a new flat
Ananya has just taken possession of a flat and has an ₹8 lakh quotation for a modular kitchen, wardrobes and false ceilings. Her credit score is above 800. At a 25% margin she pays ₹2 lakh herself and borrows ₹6 lakh. These are MoneyKarma calculations using the standard reducing-balance EMI formula; Ananya and her quote are illustrative.
| How she funds ₹6 lakh | Rate | Tenure | EMI | Total interest |
|---|---|---|---|---|
| Standalone interiors loan | 9.46% | 10 years | ₹7,751 | ₹3,30,086 |
| Added to the home loan | 7.50% | 10 years | ₹7,122 | ₹2,54,653 |
| Added to the home loan | 7.50% | 20 years | ₹4,834 | ₹5,60,054 |
The home loan route at 10 years saves her ₹629 a month, about ₹75,400 over the term. The 20-year version looks easiest on the EMI but costs about ₹3.05 lakh more in interest than the 10-year one. A kitchen wears out long before a 20-year loan ends, so a shorter term usually makes sense.
What if she has already signed her home loan?
Adding interiors later usually means a separate home improvement loan or a top-up on the existing loan, each with its own rate and fee. It's easier to raise interiors with the lender before the home loan is sanctioned, while the estimate can still be part of the project.
What documents do lenders ask for?
From the lists we checked on 31 October 2026:
- KYC: Aadhaar and PAN for you and any co-applicant or guarantor
- Income proof: salary slips or ITRs, as for any home loan
- Bank statements for the last 12 months
- A quotation or estimate for the interiors work
- Property papers, since the property you are furnishing is usually the security
For smaller decor loans, one public-sector bank takes the items bought as security up to ₹2 lakh, and above that lends only to its own home loan borrowers against a mortgage. If your flat is mortgaged to another bank, you'll need a no-lien letter from that bank for the items or work it funds.
Can you claim tax benefits on an interiors loan?
Only on part of it, and only under the old regime. Under section 22 of the Income-tax Act, 2025, in force from 1 April 2026, interest on money borrowed to repair, renew or reconstruct a self-occupied home is deductible up to ₹30,000 a year, inside the overall ₹2 lakh limit. Principal repaid on repairs or additions after completion doesn't count under section 123. Furniture and appliances aren't repairs, so plan as if that part brings no tax saving. Keep the contractor's bills and the lender's interest certificate.
