Due to rising real-estate costs, purchasing a home has become challenging. Considering that it is not a good idea to utilize all of your funds to buy a home or property, a home loan is a simple alternative to fund your purchase. Do you wish to have in-depth knowledge about home loans? Well, read our extensive guide on home loans and types available in India.
What is a Housing Loan?
You must be curious to learn what is a housing loan. Well, it can be defined as a set amount of money borrowed from banks and Housing Finance Companies (HFCs) to buy a home. Home loans come with an adjustable or fixed interest rate and repayment terms. The property subject to the loan is mortgaged to the lender as collateral until the debt is repaid.
Interest rate, loan amount, tenure, monthly EMIs, and credit score are all important things to consider while looking for a house loan. Before seeking a home loan, research all options and select the best to enjoy home loan tax benefits.
What are the types of home loans available in India?
Home Loan
It is the most popular form of home loan used to buy a house. Many home financing firms, public banks, and private banks provide housing loans in which you borrow money to buy the house that you desire and return the loan in monthly installments.
Now that you know what is housing loan is, you can apply for one yourself.
Loan for Home Construction
If you already own some land and need finance to build a house, this is the home loan you must go for. This loan offers finance for the entire construction process.
Home Improvement Loan
This type of loan offers finance for remodeling or repairing the property if there is an issue with the present structure, such as painting the house’s interior or exterior, plumbing, updating the electrical grid, waterproofing, etc.
Loan for Home Extension
If you presently own a home and would like to add additional room or floor to suit your expanding family. This may be accomplished by taking the help of a home extension loan as it provides finance specifically for that.
Home loan balance transfer
The home loan balance transfer option allows the user to send the outstanding balance of their house loan to a different lender who provides a cheaper interest rate and improved service. You might also look into the possibility of a top-up loan on your outstanding loan after the transfer.
This is an excellent option to manage your existing loans. But always note to check for home loan tax benefits before applying for one.
Composite Home Loan
This home loan finances for both the purchase of the plot of land on which you wish to build a house as well as for the home construction, combining both into a single loan.
Conclusion
This article aims to enlighten you with significant information concerning home loans and their variations available in India. Now that you are acknowledged for the same, you can select the best loan option for you.
