5 different types of Home Loans in India
With the rising real estate prices in India, a Home Loan is the only way through which most people fulfil their dream of buying a home. To better meet the needs of the borrowers, lenders in India now offer different types of Home Loans.
Purchasing a home has now become a benchmark for settling down in India. A home purchase is a dream shared by millions in the country. But the ever-increasing price of real estate has significantly increased the demand for Home Loans in the country. Below is a list of some of the most popular Home Loan options you can consider:
1. Basic Home Loan
The standard Home Loan is the most popular type of loan people take for fulfilling their dream of purchasing a home. What is a Home Loan? It is a type of loan that enables you to borrow money from the lender for buying a property of your choice. After the purchase, you can then repay the loan to the lender through monthly instalments.
If you meet the eligibility criteria for the loan, the lender can approve up to 80%-90% of the cost of the property as a Home Loan.
2. Home Construction Loan
If you already own a piece of land and would like to build your dream home on the same, you can consider a home construction loan. Unlike a basic Home Loan where the lender makes a lump sum payment of the loan amount, a home construction loan is generally disbursed in instalments based on the progress of the construction project.
The amount approved for a home construction loan is generally based on the approximate construction cost.
3. Home Extension/Improvement Loan
One of the most popular types of Home Loan is a home extension or improvement loan. If you already have a home but want to add a room or maybe a floor to it, a home extension loan can help. Similarly, home improvement or renovation loan is used for renovating an existing home.
A home extension or improvement could easily cost lakhs of rupees. These loans ensure that you can expand or renovate even if you currently do not have adequate savings.
4. Home Loan Balance Transfer
If you have already taken a Home Loan and are repaying it now, you have the option to switch to a different lender. Borrowers generally do this in cases where they can get a Home Loan from a different lender at a lower interest rate.
But before transferring your Home Loan, do consider the actual savings as the new lender might have costs like processing fees and more.
5. Pradhan Mantri Awas Yojana (PMAY)
With the Credit-Linked Subsidy Scheme (CLSS) under PMAY, first-time homeowners can get Home Loans at subsidised interest rates. This can allow you to save as much as Rs <2.67> lakh on the Home Loan. There are additional benefits like extended loan tenure of up to <20> years available under this facility.
Only banks registered under the scheme are eligible to offer this subsidised loan. If you are a first-time property owner and looking for a lender, do consider one that is registered under this PMAY scheme to avail of the benefit.
Apply for Home Loan online
Now that you know the different types of Home Loans, it shouldn’t be difficult for you to select one that best suits your requirements. After choosing the right type of loan, you can look for a reputed lender to apply for the loan.
Top lenders in India now let you apply for Home Loans online. But do check the eligibility and documentation requirements before applying to ensure you are eligible for the loan and have all the documents. This will make it easier for you to get approval for the loan and get closer to your dream of being a homeowner.
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