Renovation could include painting the house, providing a deck or a patio in the outdoor or to construct the drive way or to construct a new portion on the upstairs. Except for the construction of the new portion that would support the living of a small family which you could give it away for rent, the rest all are small changes that could be supported from your own salary. For the construction of new portion whether it be a single bedroom or double bedroom house, you would need considerable amount of money. For this you could either go with the personal loan or else go with the house loan.
In personal loan there is no option that you could ignore paying the capital amount. Of course, unless you have an open discussion with the honest mortgage advice you would be with the impression that for the house loan also you should repay the capital amount part by part in the installment that you pay every month. Once the advisor discloses the wonderful option of paying only the interest and deferring the capital amount payment for a later dates you could gain confidence in taking the loan and constructing the new portion in the upstairs and rent it out.
Every month you could pay of the rent you get to the loan as interest amount thus letting you free from the burden of paying the loan. Every year as and when you get some bonus from your job or else some of your small investments get matured you could close the capital amount partially and to the end of the loan tenure you could close the complete capital amount raised for the renovation. Hope this plan sounds to be good enough to implement right now and get the rent as well as have some good companion staying in your house.