Buying a house is every man’s biggest dream and a commitment of a lifetime. Home loans are undoubtedly an attractive and easy way to turn your dream of owning a house into reality.
Today a number of banks and housing finance companies (HFCs) offer different types of home loans to cater to the growing needs of home buyers in India. The home loan market is brimming with a number of products and options to help you efficiently manage your loan EMIs.
In this article, we’ll take you through the five of the most popular home loan options that can help you quickly become a debt-free owner of your prized possession.
1. Home Loans
As the name suggests, Home Loans are given to buyers for the purchase of a property. They easily cover about 85% of the total cost of your property. A number of reputed banks, like SBI, HDFC, ICICI, and HFCs, like DHFL and more, offer home loans at a different rate of interests, which usually range between 8.70% and 11% (PaisaBazar, 2018). The interest charged is either fixed or floating, and you can apply for these loans for the:
- Purchase of a new flat, house, or bungalow
- Purchase of resale property
- Construction of a new house
“Buyers are advised to do thorough market research about different banks, their home loan portfolios, and interest rates levied, and carefully read their terms and conditions before making a final decision.”
2. Home Improvement Loans
Planning to undertake renovation or repair work at home? Home improvement loans can help you easily realize your goals without letting you disturb your savings. Whether you want to paint your house, get the overhead tank repaired, re-do flooring, or modify the interiors, home improvement loans can help you add new charm and enhance the ambience of your property.
3. Home Extension Loans
Want to add another room or balcony to your existing house? With each passing year, you and your family may need a bigger, better house to match their needs and requirements. That’s when home extension loans come to help. They help you easily undertake all kinds of construction and home extension tasks swiftly and promptly and that too at affordable interest rates (DNA India, 2018).
4. Bridge Loans
Sometimes while searching for a new property, you come across a too good, hard-to-miss-deal. But the shortage of funds spoils the whole plan. Worry not, many leading banks and financial institutions now offer short-term bridge loans that can help you fund your new house while you still await the sale of your existing property. This ensures that you neither have to miss the opportunity of buying your dream house nor have to compromise on the selling price of your existing property.
5. Balance Transfer Loans
These loans help you transfer your balance loan amount from one bank to another due to lower interest rate, increase payment term, and/or better services. Many nationalized and private banks offer the facility to transfer balance loans at attractive interest rates.
Apart from the aforementioned loan types, banks also offer NRI Home Loans, which have been exclusively designed to fund non-residential customers who aspire to buy property in India. However, the procedure and documents required for this loan are different (Financial Express, 2018). Mostly all public and private sector banks offer home loans to overseas Indian customers.
However, to apply for any of these loans, you need to have sufficient income and a healthy credit score. So, save wisely and repay all your debts on time to maintain a strong credit history and be home-loan-worthy!
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