What types of Home Loans are Available in India?

Buying a house is indeed an extravagant expenditure. However, everyone aims to have a place of their own as it is an achievement of a lifetime.

In India, public and private sector financial institutions provide different home loans to turn such aims into reality.

All you need to do is do a little bit of research to pick a suitable deal for yourself.

Read on to learn more about various types of home loans available in India.

1. Land Purchase Loan:

Housing finance companies and banks provide land purchase loans for purchasing the plot for the construction of your house. You can cover up to 80-85% of the cost of the property as a loan.

Applicants above age twenty-one with a regular monthly income can apply for this loan. Financial institutions like PNB Housing Finance provide home loans for houses to both salaried/self-employed people.

2. House Purchase Loan:

House purchase loans are utilized to buy residential properties. Applicants can get up to 85% of the value of the property as a loan.

The interest rates applicable for house purchase loans are of three types - fixed, floating or, hybrid. Salaried and self-employed persons between the age of twenty-one and seventy years can apply for this loan.

The EMI rate of financial institutions like PNB Housing Finance for a home loan for houses is INR 689 per INR 1 Lakh, making it one of the lowest EMI offered by banks. Hence, this is one of the commonly-sought loans.

3. Home Construction Loan:

Home construction loans are ideal for those who want to construct their house within a year of the land purchase.

Financial institutions issue this loan to borrowers who have their plot or a co-owned plot. You can get up to 85% of the total cost of the home loan for constructing the house. This loan would not be applicable if the plot were purchased over a year ago before the construction.

4. Home Extension Loan:

A home extension loan is perfect for individuals who want to prolong their stay in their existing house. They may, for instance, construct new rooms or refurbish some of the existing rooms.

Banks take care of 70-85% of the cost of extension work. Therefore, this loan is somewhat similar to home improvement loans.

5. Home Improvement Loan:

Home Improvement loans are taken by those who already own a house but have a shortage of funds for renovation. You can take up this loan to do an internal or external painting of the house, waterproofing, electrical work, etc. Lenders like PNB Housing offer industry-best terms on home improvement loans. 

6. NRI Home Loan:

NRI Home loans are taken by Non-Residents Indians who want to own a property in their motherland. Although this loan structure is similar to other home loans, the paperwork is more extensive.

On the other hand, financial institutions like PNB Housing Finance offer minimal documentation for home loan and excellent customer service, making NRI home loans for the construction of houses hassle-free.

7. Home Conversion Loan:

A home conversion loan is for those individuals who have bought a house using a home loan for the construction of a house but want to buy and move to another place. You will have to transfer the existing loan to the new house. However, you will not be required to pay back the existing loan.

Conclusion

With proper research, you can easily acquire the home of your dreams. Make sure to understand every little detail about your financial institution and the various loans that you can take before you apply for one.

Home loans for construction houses are readily available and easily accessible. All it takes is a well-informed borrower to use them to their full advantage.