Home loan is the most common loan borrowed to purchase the house of your dreams. There are many reputed banks and financial institutes that provide good deals on home loans, which come with flexible terms and transparency. For applicants who are self-employed or from unorganized sectors, you can now avail exclusive home loans with benefits that help you to get your dream home. Considering the different requirements, there are various types of home loans offered by banks and financial institutes. Learn about the 7 types of home loans offered before you go to apply for one.
- Loan for purchase of home –
Home-purchase loan is a loan borrowed to buy a residential property. You can get 80% to 85% of the current market value of house sanctioned as loan amount by the lending bank or financial institutions. The interest rate on these loans can be chosen by the applicant from fixed, floating or hybrid.
- Loan for purchase of land –
This type of loan is called land-purchase loan, which is taken to buy land for building house. Banks and Non-banking financial companies (NBFCs) lend these loans sanctioning up to 80% to 85% of the total land price.
- Loan for home construction –
Construction loan is given to applicant or applicants who are owner or co-owners of the plot to construct the house. Unlike home purchase the procedure for home construction loan approval is bit different. It requires the plot of construction to be purchased within a year. The cost of construction must be estimated by the applicant.
- Loan for extension of home –
The loan for home extension is taken for extending the existing home. A few banks consider this loan as home expansion loan and other banks consider it as home improvement loan.
- Loan for improvisation of home –
The home improvisation loan is taken to renovate the house. This coves costs of painting, repairs, digging borewell, water proofing, electrical wiring and other such processes.
- Loan for conversion of home – If you already own a house and wish to shift to another for any reason, you can avail home conversion loan to buy a new house.
- NRI home loan – Non-resident Indians (NRI) who plan to buy home in India can avail the NRI home loan offer. The structure of this home loan is very much similar to the usual home loans although the paperwork is more extensive.
Before applying for a home loan identify your need and then apply for type of home loan that suits your needs. This will help you ease the application process and get a quick approval. To estimate the EMI amount and plan your repayment, you can use the online EMI calculator.