Just like food and clothes, a shelter in the form of a home is also a basic necessity of a human being!
For the same purpose, either you rent, lease or buy a home. While it is the dream of every individual to build a home, it is their income and credibility that decides if he/she is eligible for a housing loan or not.
Yes, with the help of a housing loan, you can easily fulfil the wish of owning a dream home by paying lower EMIs calculated as per the lender’s Home Loan interest rate. For this, you can also use the Home Loan calculator to know an exact amount that you will pay even before applying for a Housing Loan.
A Housing Loan can help you with a higher loan amount between Rs.20 lakh and Rs.10 crore from leading banks and online non-banking finance companies (NBFCs).
What’s more, investing in a home is a safe option as its value keeps increasing and you can earn a higher value after some months and years.
In the same context, different people may have different needs and to complement most, lenders provide multiple types of Home Loans. Let’s have some of the most common types of Home Loans available in India.
Land Purchase Home Loan
The purpose of this housing loan is to help a borrower purchase a land or plots for constructing a home. These loans are offered either for residential or investment purpose. Banks or lenders can offer up to 85% of the total value of the land. No matter how many Home Loans are active in your name, you can avail it if you have a sound Credit Score and repayment capacity.
Home Construction Loan
People can avail a housing construction loan to build a home the way you desire and not for availing a fully or partially constructed House Loan. People applying for a home construction loan should know about the average cost and apply for a credit accordingly. You can easily avail such loans once the borrower has all vital documents to make a valid claim.
House Purchase Loan
One of the most common and popular loans that are availed in India are home purchase loans. You can use the loan amount to purchase a property from a different owner. Being smart is the key, and is you should be cautious while assets such as homes from other owners. You can avail such housing loans either on floating or fixed interest rates. Paying Home Loan EMIs as per the floating rate means paying EMIs which may go up or down as per the current market conditions. Opting for the fixed Home Loan interest rates means paying fixed EMIs. You can go for a fixed rate if your income and savings are limited so that your monthly income remains unaffected. Compared to a home construction loan, you will have to follow an elaborated process while procuring this loan.
Home Loan Balance Transfer
Home Loan balance transfer is a unique facility that new age lenders offer to existing Home Loan borrowers. If you are an existing Home Loan customer servicing higher Home Loan interest rates and EMIs, you can bring it down by switching the loan account. As a result, you get to lower your EMIs by paying lower rates when you switch the loan account to a lender offering lower rates. Lenders also provide a top-up loan facility at a lower rate and longer tenor up to Rs.50 lakh to fund your other needs.
The Bottom Line
If you are willing to avail a Home Loan for buying a home, you are now aware of the different housing loan options that are available in India. Apply for one that suits your needs and repayment capacity online!
Arwind Sharma is a financial advisor with an experience of more than 7 years. He has worked for topmost financial firms in India and has been a visiting faculty at many reputed institutes in India. Currently based in Gurgaon, Arwind Sharma is a name to reckon with when it comes to financial management for big brands. A post-graduate in business economics, he is an alumni of Princeton University, USA. During his free time, Arwind teaches children from marginalised sections of society and also work on his blog.