Banks and housing finance companies (HFCs) now offer various home loans and schemes for women, farmers, CA, doctors etc., to cater their specific needs by providing different types of housing loans in India. To satisfy this increasing demand for home loans, there are several types of home loans one can choose. Let us read in detail which one is beneficial for you to avail.
Several lenders offer home loans for buying as well as for a variety of other purposes. Below mentioned are some of the popular types of home loans available in the financial market:
You should opt for this loan if you want to buy an already constructed property or an under-construction property. As per the RBI guidelines, you can receive a home loan of up to 90% of the property value from a lender.
This loan is available if you wish to purchase a plot of land or build a house. The first installment of the loan amount is disbursed when you furnish the relevant documents concerning the purchase of the land. Any subsequent disbursals will depend on the construction status of the house.
If you plan for building a house on a plot, you choose this loan facility. Plot loans are different from home loans as these loans are granted for the purchase of a constructed property, whereas a plot loan or a land loan is only for purchasing the land (with no construction done).
You can take a home loan even for renovation or repair expenses. In this case, the tenure for repayment is generally shorter. This is because the amount granted for the home renovation is relatively less than for an entire home. However, the interest rate for home improvement loans is typically like that for a regular property loan.
This loan facility is available if you need financing for construction purposes. This type of loan is granted only if you own a plot of land and plan to construct a house on it. Just as a composite loan, the disbursal depends on the stages of construction.
You can choose this loan if you have recently sold a house and want to buy a new one with the sale proceeds but need an additional amount. The loan helps in covering the gap between the purchase of a new house and the sale of an existing house.
If you are planning to extend the space of your home, you can choose this loan facility. Under this form of lending, financial institutions typically disburse amounts that could cover up to 90% of the estimated construction expense. The sanction amount depends on the loan amount and the Loan-To-Value ratio, and this makes it different from a home renovation loan.
This type of loan is generally taken out by young professionals who have just begun building a career. In this loan facility, your initial EMI amount is lower. However, you can always increase the EMI amount with time, which is a salient feature of this form of loan.
This is similar to a loan overdraft facility. In this case, your home loan account is directly linked to your bank. Any amount deposited in the bank account over and above the EMI amount is used as a prepayment, which helps you save on the interest due.
One must make note of the fact that the aforementioned interest rate figures are always subject to constant change. Hence, we would highly recommend that you check with the bank before initiating the home loan application process.
Now that you have learned about the kind of home loans that exist in the market, you should be able to choose the right one for yourself. To apply for any of the above-mentioned home loan options, you can always take a look at the house loan offers from the lending partners of Bajaj Markets. Through Bajaj Markets, you also get access to benefits such as pre-approved loan offers, home loan balance transfer facility, flexible repayment tenure, and a credit health check report, among many others.