For too many Indian families, buying a house stands as one of the milestones to mark in a lifetime. Banks and housing finance companies provide multiple types of home loan packages that cater to the varied demands and budgetary considerations of different individuals. It is beneficial to acquaint oneself with the different kinds of home loans available, to choose the one that best fits long-term repayment cushion, strategy, and budgetary considerations.
Types of House Loans
A Standard Home Loan
Typical home loans fund ready-to-move residential houses, with banks providing 80-90% house value as a loan. You can repay the loan over a period of up to 30 years, and choose between fixed or flexible interest rates. These home loans in India include apartments, standalone houses, and villas in primary and secondary markets.
House Construction Loan
Home building loans offer step-by-step financing for constructing houses on self-owned property. Disbursal happens as per the progress of construction through regular bank visits. You pay interest only on the money you use until the building is done. Your loan becomes a regular home loan once the house is built.
Know the process to get home construction loan in India
Land or Plot Loan
Land loans help you buy a plot for future home construction, usually covering 70–80% of the land’s value. These are more expensive with longer repayment terms as they entail more risk. Borrowers are required to show definite construction plans within explicit timeframes for approval and subsequent conversion possibilities.
Home Renovation Loan
Home improvement loans fund improvement and renovation works without asking for property as collateral. The money can be used for things like fixing the structure, updating the interiors, improving electrical setups, or making the home look better. The loan value starts from ₹50,000 to ₹20 lakhs at competitive interest rates with quicker processing than a regular home loan.
Home Loan Top-Up Facility
If you already have a home loan, a top-up loan on home loan gives you extra funds, usually at a lower interest rate. Banks provide these with regard to payment history and appreciation of property value. Money can be utilized for any purpose with speedy processing, as a credit history is already created. Interest rates are more affordable compared to personal loans.
Pre-Approved Home Loan
Pre-approved loans provide conditional approval prior to property choice, giving buyers negotiating leverage and speedy transactions. Banks analyze financial profiles and issue sanction letters stating maximum loan sizes. This facility holds for 6-12 months, facilitating serious property search within approved budget ranges while accelerating final processing.
PMAY Loan
In India, several banks, working hand-in-hand with the government, offer home loans at subsidized interest rates to make housing more affordable for everyone. Through the Pradhan Mantri Awas Yojana (PMAY), individuals from economically weaker sections (EWS), as well as low and middle-income groups (LIG & MIG), can apply for financial assistance to own a ‘pucca’ house in either urban or rural areas. One key eligibility condition is that the applicant’s family must not own any other residential property, apart from the home they plan to buy or build under this scheme. The scheme is for purchase and construction with definite carpet area limits.
Home Loan Balance Transfer
Balance transfer loans enable moving existing home loans to other lenders providing preferable conditions such as lower interest rates or longer tenure. New lenders settle outstanding amounts to earlier lenders who provide fresh loans. There are processing fees but often the saving itself justifies transferring costs for better terms.
Home Loans for NRIs
Non-Resident Indian home loans for overseas Indians buying Indian properties with higher down payments of 30-40%, with higher documentation. Proof of foreign employment income and tax returns is required. Loan sizes are based on foreign currency income converted to rupees with NRE/NRO account repayments.
Short-Term Bridge Loans
Bridge loans offer short-term funds to borrowers selling a property to acquire another, filling time gaps between transactionxs. There are higher interest rates because of short duration and added risk. Loan term is between 6 months and 2 years. Borrowers repay or roll over into long-term loans after receiving sale proceeds.
Joint Home Loans
Joint home loans involve multiple applicants, typically family members, applying together to increase loan eligibility through combined income consideration. Everyone who applies becomes a joint owner and shares the responsibility of paying back the loan equally. Tax benefits can be claimed by all co-borrowers based on contribution ratios, helping families access larger loan amounts for better properties.
Pre-Approved Top-Up Home Loan
Pre-qualified top-up loans provide existing customers with immediate top-up funding through payment history and property value appreciation. Pre-qualification avoids extensive documentation with pre-agreed interest rates according to customer risk profiles. Such loans enable rapid liquidity with existing property security through simplified combined EMI structures for easy repayment management.
Home expansion loan
Home expansion loans fund adding rooms, floors, or buildings to existing homes for expanding families that require more room without moving. Loan amounts are determined by expansion costs and existing property values. Banks demand architectural plans and municipal approvals with market rate-competitive interest rates because enhancements add collateral worth.
Key Considerations for Selecting a Home Loan
Establish the goal: Ensure whether you require the loan to buy, build, renovate, or acquire a piece of property.
Check Your Eligibility: Use an online home loan eligibility calculator to determine your maximum borrowing amount.
Compare Interest Rates: Use a home loan EMI calculator, it helps you estimate your monthly installments based on the loan amount, tenure, and applicable interest rate.
Be smart with EMIs: Choose an amount you can easily manage every month without stressing your budget.
Select the Correct Tenure: Select a loan duration that you are at ease with; shorter durations entail higher EMIs but lower interest rates.
Plan Your Down Payment: The loan amount and EMIs are influenced by your ability to pay up front.
Recognize Processing Fees: Verify whether any processing fees apply; they are subtracted at the time of loan disbursement.
Conclusion
A knowledge of the various types of home loans available in India empowers you to make the appropriate decisions that are most appropriate for your needs. Whether you are purchasing a new home, constructing on a plot, redeveloping, or extending your existing property, there is a home loan offering for you. Consider your requirements, compare home loans, and choose a lender that offers good terms and good backup.
Let us construct your dream home free from hassles and worries. Call Brick & Bolt today and start your home ownership experience in your dream home.
Apoorva H P Achar