Real estate prices are rising, making buying a property with just savings hard. Luckily, home loans provide a solution. They let you borrow money without using all your savings. Whether you want to buy, build a home, or purchase land is a loan. Different types of home loans cater to various needs. Now, let’s look at the home loans offered by Indian banks.
Standard Home Loan
The most basic or generic one is the Standard or Basic Home Loan. This loan is flexible and can be used to buy old, newly built, or under-construction residential homes.
A Home Construction Loan
A home construction loan is suitable if you want to construct a house on your own piece of land instead of a ready-made house. The loan amount is also released in parts and depends on the progress of the construction work done. You must present an estimate of the money at each stage of construction or reconstruction.
Land or Plot Loan
Like a Standard Home Loan, a land loan is for buying land. However, ensure the property’s documents, especially ownership and title deeds, are clear. The bank won’t check these. You have three years to build a house on the land.
Home Improvement and Extension Loan
If you want to remodel your home, consider a home improvement loan. This loan covers projects like painting, fixing a leaky ceiling, or expanding your home. A home extension loan is ideal for adding rooms or extending floors.
Pre-approved Home Loan
Banks offer pre-approved home loans. This allows customers to secure a loan and search for property based on the approved amount. The bank assesses your repayment capacity and income to recommend the right home.
PMAY Credit
Indian banks and the government offer low-interest home loans under the Pradhan Mantri Awas Yojana (PMAY). These loans target low to middle-income groups and the economically weaker sections. They can be used to buy ‘pucca’ houses in rural and urban areas. Notably, the home must be the family’s only property.
Home Loans for NRIs
Banks entice NRIs with attractive real estate financing in India. Low rates and minimal paperwork sweeten the deal. Borrowers’ repayment capacity determines loan size. These schemes open doors for overseas Indians to invest back home.
Applying for a Home Loan Online
You can apply for various types of home loans online. Just visit the bank’s website and fill out a form. Include your desired loan amount, personal details, and income. Then, the bank will check your eligibility. After that, they will inform you of the maximum loan and interest rate. This process cuts down the need to visit multiple banks and reduces paperwork. Using a home loan EMI calculator, you can easily estimate your monthly payments and plan your finances accordingly.
By understanding these different types of home loans, you can choose the one that best suits your needs and financial situation.
