Home loans can be taken to buy, build, or extend your house. It is a type of secured loan where your property acts as collateral. They are long-term loans lasting up to 30 years.
There are various types of home loans based on their end utility. Let’s look at the different types of home loans in India in detail.
This is the most common type of home loan. You can use a home purchase loan to buy a residential property that is pre-owned, pre-built, or under construction. Banks and financial companies offer 80%-90% of the property’s price as a loan.
A home renovation or improvement loan can be used to improve or renovate your current property. You can use the funds from such a loan for painting, interior or exterior work, plumbing, upgrading the electrical system, waterproofing the ceiling, etc.
A home construction loan is a type of home loan you can use to build your house. This is for you if you already own a plot of land and need funds to build a house on it. This type of loan is generally released in installments, as your construction progresses.
A home extension loan is used for adding a room or floor to your current house. Essentially, this type of home loan is used to extend your property.
A plot loan can also be considered a type of home loan. You can use it to purchase a plot of land on which you wish to build a house. This kind of loan can also include the funds required to build the house as well.
If your current home loan interest rate is too high or you are dissatisfied with your current lender's service, you can opt for a home loan balance transfer. This will help you to transfer the outstanding debt to a new lender that offers a lower interest rate and better service.
Consider factors like transfer charges, new interest rate, processing charges, etc. before transferring your loan to a new lender.
A top-up home loan works as any other top-up loan. You can use this type of home loan to borrow funds beyond the amount first disbursed.
If you have been paying your EMIs on time, most banks or lenders will offer a top-up loan within a few months or years. They can act as extra funds to invest in your house.
A short-term bridged home loan is another different type of home loan in India. You can opt for this if you want to buy a new property while waiting for the sale of your current property. This way, you don’t have to rush the sale of your current property, as the bank or lender will take care of the funds for your new property till your current property is sold.
Out of the many types of home loans available, the NRI home loan is for non-resident Indians. NRIs who want to invest in property in India can take this loan.
The Pradhan Mantri Awas Yojana Home Loan is a subsidized home loan scheme run by the Government of India. It is available to both rural and urban candidates through most nationalized banks.
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Having a home of one’s own is everyone’s dream. You can make it possible with the various types of home loans available in India.
You can get home loans for every budget, and even get subsidized loans from the government. As home loans are secured loans, they get sanctioned fairly easily. You don’t need a high credit score for applying for a home loan.
Which is the most common type of home loan?
Which bank gives home loans at lowest interest rates?
Can we get 90% of the property price as home loan?
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