Owning a home is a dream for many. Although individuals may not have adequate funds to fulfill their ambition, they can opt for home loans provided by the banks. We will be looking into different types of home loans available in India.
Subsequently, you can choose the one that meets your requirement and suits your budget. If you are planning to buy a villa, apartment, or flat from builders in Kochi, Trivandrum, or any other part of the state, they will guide you regarding loan processing. It may also be possible that they will help you to get it quickly.
Let’s discuss the top 8 various home loans available in India.
Loan for Buying a Home
This has been one of the most common types of loans. The banks will lend you money without any complications if you are buying from reliable builders or individual sellers. You can get up to 80-90% of the estimated amount as a loan. As the loan process is quick compared to other types of loans, you can own the house without much delay.
House Construction Loan
This loan can be obtained for constructing a house. Any person having adequate land on his or her name and sufficient income to pay the EMIs can approach banks for a home loan.
The banks will examine the documents thoroughly to avoid any fraud. The property document has to be perfect in all respect for the banks to approve the loan. Almost all banks provide a loan of up to 80% of the estimated amount.
As the government promotes the idea of shelter to every Indian, you can also claim a 100% tax rebate in the interest paid on the home loan.
Combined Plot-Home Loan
This is another type of home loan, wherein the banks will approve a property loan initially. Each bank has a unique name given to this loan. For example, the State Bank of India calls it “Realty loan”.
In this case, the bank will initially approve a land loan or property loan. Up to 80% of the price of the property can be obtained. The initial repayment period will be a maximum of 10 years. As the loan is for land, the interest rate will be higher than a home loan. Once you process the home loan, the repayment period will be increased to a maximum of 30 years. The rate of interest also will be decreased accordingly.
Home Renovation Loan
You own a house, however, you want to install new accessories, systems, improve external appearance, change flooring or similar tasks. Banks will finance your renovations. This loan is called a home renovation loan. The interest rate of renovation loans differs from a typical home loan.
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Home Extension Loan
You may want to extend the house, with the inclusion of a couple of bedrooms, increasing the size of the kitchen and so on. Banks will finance your additional construction requirements. Approach the bank of your choice to get a home extension loan.
Banks will provide a loan for buying land. You may think about constructing a home somewhere in the future. Even if you don’t construct a house in the near future, the land will remain as a tangible asset with increasing value. Therefore, taking a loan and buying a property will not be a wrong decision at any point in time.
Pradhan Mantri Awas Yojna (PMAY)
This Yojna or program is aimed at providing a shelter to everyone. First-time homebuyers can avail this facility. You may approach the banks registered under the scheme for the loans under PMAY. It is a way to save money on interests. The loan tenure can be up to 20 years.
You will find the relevant application form online at: http://pmaymis.gov.in/.
Home Loan Balance Transfer
There is an option given to lenders for transferring the home loan to the bank of their choice. You can check the interest rates at both the banks and opt to shift the banks. However, take time and study the charges, interest rates, and processing fees before going ahead with this. Some banks may have hidden charges. You must get a thorough insight, ideally from industry experts. Else, it will not be a wise decision.
The Tail End:
By now, you might have understood that there is a wide variety of home loans available in India. Choose the right builder, location of the property, negotiate the best deal, and go ahead about buying your dream home. To add to that, this is the best time for property deals as many builders are offering great deals.