In India, financial organisations offer different types of home loans to suit the variousneeds of the borrowers. Read on to know more about the various home loans options available in India.
In India, owning a home is a dream for many. Today, with the easy availability of home loans, buying a home has become easier than ever before. A home loan is the best way to fund the purchase of your dream home rather than burning your entire life savings to buy a home. Many lenders in India offer different types of home loans to suit the varying needs of the borrowers. Let us look at the different kinds of home loan options that you can consider:
Home Purchase Loan
Probably the most popular type of home loan availed in India. It can be used for buying a pre-owned or a new home. It also the most commonly offered type of loan by the lenders in India. The interest rate for a home purchase loan is generally of two types – fixed interest rate and floating interest rate. Although the interest rate varies from lender to lender, it usually ranges between 8.50% to 12.50%. You must know that most lenders only approve about 85% of the property value as a loan; you must pay the remaining amount.
Home Construction Loan
This type of home loan, as the term itself suggests, is designed especially for people who wish to construct a home of their own rather than purchasing a pre-constructed home. You can build a home either by yourself or appoint a contractor. The disbursal process for a home construction loan is different from home purchase loan. Typically, the lenders disburse the amount in instalment as and when you show proof of progress in construction.
Home Extension or Home Expansion Loan
Home extension loan covers the cost of adding a new bedroom in your existing home or extension of the living room. You can also use this type of loan to add another floor to your bungalow. Taking a home expansion loan is a much better choice than applying for a personal loan since you get the credit at a much lower interest rate. Many lenders in India offer this type of loan, do your research about the interest rate and the approval process of different lenders before choosing one.
Home Improvement loan
If you are a homeowner, at some point, you may feel the need to upgrade the interiors of your home to make it look more attractive and modern. This may include changing the electricals items, and bathroom fittings or fixing the tiles and doing a repair to the ceiling. And, sometimes, depending on the type of refurbishment work you wish to undertake the cost may run into a few lakhs. You can cover the cost by taking a home improvement loan. These types of loans have a tenure of 15 years and the interest rate rangesfrom9% to 15%.
Balance Transfer Home Loan
If you are not satisfied with the services of your current lender or if you think the interest rate is too high and you wish to switch to a different lender, you can opt for a balance transfer loan. The new lender will settle your balance loan amount, and you can repay the new loan at the revised interest rate.
Bridged Loans
Bridged Loans are short-term homeloans that are specially designed for existing homeowners who want to buy a new property. It helps them get the funds for purchasing the new home until they find a buyer for the old house.
There are a wide variety of home loan schemes available to suit your different needs. Choose the right type of loan and make the best of it.
