In India, everyone has a dream of owning a home. But with increasing property rates, buying your dream home can seem rather difficult. Hence, most people opt for a home loan when planning to purchase a property.
As a matter of fact, financial institutions offer a variety of loans these days. Due to an increase in demand for these loans in recent years, expectations of people have also increased. To cater to these rising demands, the financial industry has introduced many different types of schemes.
But before we dive deep into these schemes, let us first understand what a home loan is.
What is a home loan?
A home loan is a type of secured loan taken by people from a banking institute or other financial institution to purchase a house. The interest rates offered are either fixed or floating. The loan amount is paid in installments on a monthly basis over a specified tenure.
The property purchased on a loan can either be personal or commercial property. In case, you are unable to make the installments, your lender has the legal rights to recover the outstanding loan amount by selling your property.
Home Loan Types:
Lenders not only offer services for purchasing a house but also for a variety of other purposes. Here, we have described different types of schemes that are available in the market.
- Land Purchase Loans
- Home Purchase Loans
- Home Improvement Loans
- Home Construction Loans
- Joint Home Loans
- Home Loan Balance Transfer
- Top-Up Home Loans
1: Land Purchase Loans
Many financial institutions offer loans to purchase land. Buying land is really a flexible option as you can save money and can build a home whenever your finances allow. Alternatively, you can keep this purchased land as an investment. In fact, you can avail up to 85% of the cost of the land as loan.
2: Home Purchase Loans
A home purchase loan given for purchasing new or pre-owned homes. It is easily available in all banks and other financial institutions. The interest rate offered on home purchase loan is either fixed or floating and ranges between 9.85% and 11.25%. Moreover, lenders usually offer up to 85% of the total amount as a loan. The option of prepayment of home loan is also available here.
3: Home Improvement Loans
If you are planning to renovate or repair your house (like painting, constructing the overhead water tank or changing the electrical wiring) you can avail a home improvement loan. Almost all banking institutions as well as other financial institutions, offer this specialized scheme.
4: Home Construction Loans
This type of loan is available in case you plan to construct your house according to your will instead of buying pre-constructed homes. The loan approval process is a bit different as it takes into consideration the cost of the plot.
When applying for a home construction loan, make sure that the plot has been purchased within a year for you to include its cost in the loan amount. The loan amount is based on the estimate of the construction cost. You receive the loan amount in one go usually. The loan amount can also be disbursed in several installments.
5: Joint Home Loans
In case, your dream house costs more than the loan amount you are eligible for, you can simply apply for a joint home loan. It is availed by two or more people. The co-applicants have to be blood relatives or married couples. Unmarried couple or partners cannot apply for this type of loan. Moreover, all the co-applicants can enjoy benefits like tax deductions.
6: Home Loan Balance Transfer
This allows you to transfer your home loan account from one bank to another for reasons like lower interest rate or better services and deals. Here, the remaining loan amount is revised depending on the interest rates offers by this other lender.
7: Top-Up Home Loans
In this type, you can borrow some additional funds over your outstanding loan amount. When taking a top-up loan, look for a lender that offer relatively low rates of interest.
Home Loan from Finserv MARKETS are easy to apply and the loan application is approved almost instantly. Further, the loan amount will be credited in your bank accounts within 24 hours!
You can get in touch with us at Finserv MARKETS and also benefit from features like low EMI, bespoke loan solutions, minimal documentation and much more.
Finserv MARKETS, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and exclusive EMI store, all under one roof- anytime, anywhere!