4 Types of Home Loans in India You Need to Know About

As the real estate industry continues to undergo a revolutionary change, more and more people dream of purchasing their own homes. And to help individuals realise this desire, lenders in India provide a range of home loan options that cater to the needs of borrowers. This can help individuals explore the options of owning a home and turning their dreams into reality. Given the upsurging demand for home loans in the country, the following are some of the most sought-after types of home loans in India that one may consider: 

• Standard Home Loan

The basic home loan is for people who want to realise their dream of becoming a homeowner. A home loan enables borrowers to get money from a lender for investing in a desired piece of real estate. After making the purchase, borrowers make monthly instalment payments to pay off the loan progressively.

Meeting the lender's eligibility conditions is necessary in order to be eligible for this loan. Once accepted, buyers can often obtain a home loan covering 80% to 90% of the total cost of the property. Out of all the types of home loans in India, this is one of the most affordable and well-liked options for people hoping to fulfil their aspirations of becoming homeowners.

• Home Construction Loan

A home construction loan is a good choice for people who own land and want to build their houses. In contrast to a normal home loan, the loan here is often disbursed in stages to correspond with the advancement of the construction project.

The projected construction cost is often used to calculate the amount of a home-building loan. This loan enables borrowers to get money gradually, ensuring there are resources for financing the project at different stages. The home construction loan is the best option for people building their homes.

• Home Extension/Improvement Loan

The home expansion or improvement loan stands out as one of India's most preferred home loan types. This particular loan is intended for people who currently own a property but wish to add a room or perhaps an additional level in order to make it larger. A home repair or renovation loan is also available for those who want to renovate or upgrade their current property.

Adding on to or improving a property can come with considerable costs. These loans, however, make sure that you can pursue such ambitions even if you don't currently have enough savings. You can start extending or upgrading your house to create the ideal living area you desire by taking out one of these loans.

• Home Loan Balance Transfer

Individuals currently repaying a home loan may transfer the outstanding loan sum to a different lender. This is frequently explored when consumers discover a chance to acquire a home loan at a reduced interest rate from another lender.

However, before deciding on a home loan balance transfer, one must thoroughly consider their potential savings. Processing fees and any additional costs related to the new lender must be considered. 

Conclusion

One must be aware of the various types of home loans in India. This knowledge can help them choose the type of home loan that suits their needs and financial goals. Moreover, it is important to consider certain factors, like the eligibility criteria, repayment terms, and interest rates, in order to make a prudent decision.