Home Loans can help a lot of people achieve their dream of buying a Home. The demand for Home loans has spiked over the last two decades making it a popular option to finance Home buying. There are many Banks, Housing Finance Companies (HFCs), and Non-Banking Finance Companies (NBFCs) extending Loan facilities for buying Homes. There are different types of Home loans one can opt for. In our article today, we’ll discuss the different Home Loans.
Home financing through loans is the most commonly used option while buying a Home. Depending upon the purpose of Financing, the loans are of different types. They are.
Home Loan
A home loan is the most common and popular type of loan availed for a home purchase. You can opt for a housing loan to buy your dream home. A reputed Housing Finance Company/Bank can help you to achieve this dream of owning a home by providing housing loans that are fully transparent and flexible with fair terms. Also, the majority of the Indian labor force is in the unorganized sector and is often self-employed. If you are Salaried or self-employed, Housing finance Companies/ Banks offer a variety of exclusive home loans for you to fulfill your dream of owning a home.
Land or Plot Loan
You can apply for a Housing Finance Company/ Bank and avail a land purchase loan to buy a piece of a plot for constructing your dream home. Here, the lender will be financing purchasing a plot. Instead of Callotaeralizing a Home, the plot being purchased will be used as Collateral. Except for the asset type, the process and loan format will be the same as Home Loan.
Home Construction Loan
A home Construction Loan is ideal if you want to construct a home according to your needs. This loan can be availed when you already own a plot and intend to initiate Construction on the said property. Several Housing finance Companies/ Banks in India offer home construction loans. When you avail this type of Loan, there are restrictions on end usage which shall be purely utilized for Construction only.
Home Extension Loan
Restructuring your Floor plan might be on cards. And, you might want to add a new floor or a new room to expand your existing home as the family grows or simply to enlarge your floor space at home. For this purpose, you can avail of a home extension loan from a housing finance company/bank of your choice.
Home Improvement Loan
A home improvement loan (also sometimes known as a home renovation loan) can be used for various purposes such as painting the exterior or interior of the house, plumbing, upgrading the electrical system, installing new tiles, waterproofing, etc. A home improvement loan is ideal if you would like to renovate your house but currently lack the necessary funds.
Home Loan Balance Transfer
Sometimes the current home loan interest rates can be high for you to continue repayment. Also, you may not be happy with the services offered by the current lender. In such a scenario, you as a borrower have the option to transfer the home loan to another lender who can offer lower interest rates and better services. Some NBFCs/Housing Finance Companies/Banks in India even offer an option of a top-up loan besides the home loan amount which helps you get additional funds to fulfill any other funding needs you may have.
Composite Loan
A variant of a Housing loan also includes an option of a combined loan for buying a plot as well as a loan for constructing your dream home. In this loan, you get to finance both purchase of the Property and funding to initiate Construction Work on the said property. The banks may also extend the Moratorium period where repayment starts after a year or so from the loan sanction.
Besides the above-stated types of loans, people can also avail other Home Loan variants like Home conversion loans, NRI home loans (only for NRI borrowers), etc.
Conclusion
Since all the loans mentioned above are Secured Loans, the interest rates are less compared to Unsecured Credit Instruments like Credit Cards and Personal Loans. However, when opting to avail credit facility for financing your home, selecting the right lender becomes important.
There are Non-Banking Finance Companies (NBFCs) and Housing Finance Companies (HFCs) that are a little lenient while extending Credit. But, opting to fund from Banks will start an extensive Background Check but comes with lower interest rates. How do you select your lender?
Try Money Mango. a certified DSA offering Home Loan Services in Bangalore. Opting to avail loan through us, you will get to evaluate multiple lender options. Also, remove the bottlenecks that are consuming your time and resources. Get the best interest rates for buying your dream home.
