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Types of Home Loans Available in India
Home Loan: Overview
A Home Loan in India is the ideal funding option for most to facilitate home buying in the country, especially when there are numerous types of Home Loans to help you realize your dream of owning a home.
A housing loan enables you to borrow money from a lender to buy the property of your choice. The property in question is mortgaged with the lender for the duration of the loan repayment and is handed back to you after you have cleared all dues. Almost all commercial banks, financial institutions, and Housing Loan Companies now offer different types of Home Loans to cater to diverse demands and requirements.
Different Types of Home Loans
- Land Purchase Loans
As the name implies, this type of Home Loan allows you to invest in vacant land plots. However, note that the funds received from land purchase loans cannot be utilized to construct any property.
- Home Purchase Loans
This is the most popular type of Home Loan. It can be availed of to buy residential properties, such as an apartment, row house or a bungalow. It offers sizeable funding to home buyers at competitive interest rates, given its secured nature.
- Home Construction Loans
Home Construction Loans are sanctioned to meet the cost of constructing a new property and is disbursed in installments based on the construction phases. Note that this loan type is different from a Home Loan for an under-construction property.
- Home Extension/Improvement Loans
A home extension or improvement loan is meant to fund home renovation projects or additional constructions on an existing residential property.
- Bridge Home Loan
Bridge Home Loans come in handy for those who wish to buy a new residential property, with the funds secured from the sales of an existing property. Bridge loans help gap the fund deficit should the home buyer fall short of money to complete the transaction.
- Home Loan Balance Transfer
Home Loan Balance Transfers are lucrative loan refinancing options that allow borrowers with existing Home Loans to secure better terms on their ongoing loans, by switching to another lender, at more competitive Home Loan interest rates – basis their eligibility.