Different types of Home Loan in India

Introduction 

In India, buying a property has come to represent settling down. Almost every family in this busy society aspires to own the ideal home where they can relax and spend some quality time with family members at the end of the day. Given that it is not a good idea to spend all of your cash on a home or piece of land, getting a home loan is a wise way to finance your purchase.

A home loan is a form of borrowing obtained from banks and NBFCs in order to buy a home. Interest rate, loan amount, loan term, monthly EMIs on a house loan, and credit score are essential aspects to consider when applying for a home loan. These days, various home loans are available from banks and other institutions that finance housing. Hence, it becomes essential to know all about different types of home loans in India to be able to select the best type of loan for buying a home. Read on to learn more about selecting the best type of home loan for your needs.

Select the best type of loan for buying a home

People now have a wide range of expectations for a home loan, and demand for this particular credit option has multiplied in recent years. Many banks and NBFCs have developed the idea of presenting different types of home loans in order to meet the needs of multiple segments of society. To name a few, some banks provide loans, particularly for the purchase of land as well as specially designed home loans for women and agriculturalists. If you are also considering buying a home in India, then here are the various types of home loans in India that you can explore:

Basic Home Loan

A typical home loan is often considered the best type of loan for buying a home and is taken by people to realise their ambition of owning their dream home. What is a home loan? It's a loan that enables you to obtain money from a lender to pay for the residential property of your choice. After making the transaction, you can then pay back the loan to the lender in monthly instalments. The lender may approve a home loan for up to 80%–90% of the cost of the property if you meet the requirements for the loan. It is one of the most popular types of home loans in India.

Loan for Home Construction

Consider thinking about a home-building loan if you already own land and wish to build your dream home on it. A house construction loan is typically disbursed in instalments depending on the completion of the construction project, unlike a standard home loan where the lender makes a lump sum payment of the loan amount. The estimated project cost typically determines a home building loan's approved amount.

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Home Improvement/Extension Loan

A home expansion or improvement loan is one of the lesser-known types of home loans in India. A home improvement loan can be helpful if you currently own a house but wish to add a room or floor. An existing home can be renovated with a home improvement or renovation loan. Lakhs of rupees could be spent on a home addition or refurbishment. These loans guarantee you can grow or improve even if you need more money saved up.

Home Loan Balance Transfer

You can change lenders if you have previously obtained a home loan and are already repaying it. Borrowers typically do this when they can obtain a home loan from a different lender at a lower interest rate. However, take into account the actual savings before transferring your home loan, as the new lender may charge costs like processing fees and more.

Pradhan Mantri Awas Yojana (PMAY)

First-time homebuyers can obtain a home loan at discounted interest rates through the Credit-Linked Subsidy Scheme (CLSS) under PMAY. You can save up to INR 2.67 lakhs as a result of your home loan. Longer loan terms of up to 20> years are one of the extra perks offered by this best type of home loan. Only banks enrolled in the program are permitted to provide this subsidised loan. If you're a first-time home buyer looking for a lender, consider one accredited by the PMAY program to be eligible for the discount. 

NRI Home Loan

Non-Resident Indians in India utilise this sort of mortgage to build a home or renovate an existing structure. This loan's maximum term is 30 years, with two interest rate options: fixed and fluctuating. It is one of the lesser-known types of home loans in India.

Bridge Loan

People who desire to buy another house by selling their current one take out this form of home loan. As long as the old property is not sold off, the fund meets short-term fund requirements, such as the down payment for a new home. Bridge loans often have higher interest rates and a two-year maximum payback period.

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Conclusion 

Knowing about different types of home loans will make it easier for you to choose the best type of loan for buying a home that meets your needs. You can hunt for a reputable lender to submit your loan application after selecting the best type of home loan. You may now apply for a home loan online with leading lenders in India. However, be sure you are eligible for the loan and have all the paperwork before applying by checking the eligibility and documentation requirements. This can help you get the loan approved more quickly and fulfil your desire to acquire a property. While you are at it, visit Adani Realty, where you can get the best property choices at competitive prices with the availability of different types of home loans from partner lenders.