Also known as housing loan, it refers to an amount borrowed by a person from a bank or NBFC to buy, construct, repair or renovate a residential property. The tenure of the loan and the rate of interest may be on a fixed or flexible basis. The borrower is to pay off the principal amount of loan with the interest in the given loan tenure.
Home Loans are considered as secured loans. To avail a home loan, borrower has to provide a colateral. The collateral here is usually the property that is being bought or else an existing property can also be given as collateral. It is also worth noting that the interest rate on home loan is comparatively lower than personal loan as it is a type a secured loan.One advantage of taking a home loan is that it offers tax benefits on home loan according to the Income Tax Act, 1961.
Depending upon the purpose for which you are availing Home Loan, we list here the different kinds of Home Loans:
This kind of loan is give to applicants who want to construct a house on a plot owned or co-owned by them.
It is provided to buy a residential property.The interest rate on these loans is either fixed, floating or hybrid.
This kind of loan is given to cover the cost of repair and renovation of the house. These costs may include repairs to existing house, painting of the walls, digging of a bore well, water-proofing, electrical wiring and so on.
NRI-home loans are specialized home loans given to non resident Indians wishing to buy a property in India. Although the structure of this home loan is similar to the regular home loans, the documentation is more exhaustive.
Mostly included as part of their home-improvement loans, This is given to expand or extend the existing home of the loan applicant.
These are available to existing home loan borrowers to help them move to a lower rate of interest or alter the interest spread on their current loan. Mostly opted due to the fluctuating rates of interest prevalent in the market, which may affect their outstanding dues on home loans.
It helps to bridge the time gap between an old house and a newly purchased plot. Such loans may be extended for not less than 2 years.
Apart from the price of the house,stamp duty must also be paid, if the property’s value comes to ten lakhs or more.
Given to buy a plot or land on which the loan applicant wishes to construct a house. Generally, banks lend up to 80-85% of the market value of the plot or land.