Home Loan Types
In India, A home loan is an easy way to fund your house purchase given that it is not a wise idea to burn your entire savings to buy a land or a home.
Banks and other housing finance Institutes establishments offer various types of home loans these days. The demand for Home Loan has increased gradually in recent years and people have different expectations when it comes to a home loan. To cater to the requirements of different sections of society, a lot of banks have come up with different concept to cater the requirement of every segment of customer. To quote a few, several banks offer specially crafted home loans for women and agriculturalists and loans exclusively for the purchase of land. There are various type of home loan scheme in current market & competition is too high to satisfy the every segment of customer.
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Types of Home Loan:
Lenders offer home loans, not only for buying a house but also for a variety of other purposes. Some of the popular types of home loans available in the financial market are described below.
- Loans for Purchase of Landwith construction : Several banks offer loans for land purchase with construction Purchasing a land is a flexible option, the buyer can save funds and construct a house whenever his finances allow or just have the land as an investment. Up to 85% of the cost of the land is given as loan by lenders. Eligibility Criteria for Purchase of Land & construction The following are the eligibility criteria for purchase of land: Age> 18 years to 65 years Employment Salaried, self-employed, Professionals, and Non-Professionals
- Loans for Home Purchase The most popular type of home loan is the loan for purchase of a new or a pre-owned home. This loan is also commonly available and is offered by many banks in different variants. The interest rate is either floating or fixed and generally ranges anywhere between 8.40% and 14.00%. Also, 90% of the total amount is offered as a loan by many banks.
- Loans for Construction of a House This loan is specially designed for people who want to construct a place according to their wishes rather than buying a pre-constructed house. The approval process for this type of loan is different for it takes into account the cost of plot also. The most important clause when applying for a home construction loan is that the plot must have been purchased within a year for the plot cost also to be included in the loan amount. The loan amount is decided based on a rough estimate of the construction cost. The amount may be disbursed at one go or in multiple installments.
- House Expansion or Extension Loans Want another balcony or an additional bedroom? No worries, some banks also offer loans for house expansion including alteration of current structure and construction of new rooms. HDFC Home Extension loan and house renovation loan offered by Bank of Baroda are popular in this category.
- Loans for Home Improvement Renovation and repair works like external and internal repair, painting, construction of overhead water tank and electrical renovation certainly will make your house look better. But if you lack the finances for repair and renovation, banks like Union Bank of India,HDFC Bank, ICICI Bankoffer specialized home improvement loans.
- Balance Transfer Home Loans This option can be availed when an individual wants to transfer his home loan from one bank to another bank owing to reasons like lower interest rates or better services offered by the other bank. This is done to repay the remaining loan at a revised, lower interest rates offered by the other lender.Banks like HDFC Bank, ICICI Bank offer specialized home Loan transfer with zero to nominal processing fee
- Home Loan with Overdraft Facility: A home loan overdraft facilityallows borrowers to deposit and withdraw surplus funds. In this facility, the borrower’s account is linked to a designated savings account by the lender. Banks Like ICICI Bank, Bank Of Maharastra etc are offering this product.
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