Buying, extending, or renovating your home can be expensive. Thankfully, with banks offering credit facilities to help you meet your requirements, it is now possible to build your humble abode without facing a financial crunch.
Read on to learn about and figure out loan options that fit your needs.
Types Of Home Loans Available
Loan For Plots
You can get this type of loan when you wish to purchase land on which you want to build a home. Although the rates of interest on such loans are at par with regular home loans, you may miss out on claiming tax deductions for interest payments on such loans.
Home Buying Loan
The Home Buying loan is the most common type of home loan taken to purchase a new property in India. They are available at fixed and floating rates of interest.
You can get a deduction for interest paid on such a loan, and it is possible to get up to 85% of the property’s market value in the loan. It is one of India’s best and most popular home loan options.
Home Construction Loan
You can apply for a loan if you build a property from scratch. Before taking such a loan, you will need a viable estimate of the total expenses you may incur for the construction of the property and the prevailing home loan interest rate in India.
The total price of the property will be inclusive of the cost of land only when such land has been taken within one year of taking the loan.
Home Improvement Loan
These loans are needed when people already own a home but need some funds to renovate it.
Renovations include the cost of painting, vital repairs, additions to the property such as an overhead tank, and more.
Expansion Loans For Home
You may need to make extensions to your property, such as adding a balcony or constructing an extra floor. Since the cost of such expansions can be considerable, you can get a home loan to meet the expenses.
Some banks offer these types of loans under the category of home improvement.
Conversion Home Loans
You can avail of a conversion loan when you have bought a property and funded it through a loan but wish to switch to another property. In this scenario, it is good to opt for a conversion loan, as you can fund the new property purchase by transferring the existing loan to your new property.
It should, however, be noted that this type of loan is comparatively expensive.
Home Loans For NRI’s
This type of home loan is especially suitable for NRIs (Non-Resident Indians). It helps them arrange the requisite finance for purchasing a property in India. The documentation part of such loans is longer than regular home loans.
With an Indian source of income, they may also be able to avail several tax benefits.
Balance Transfer Loans
A balance transfer loan is useful when you are unhappy with the services of interest rates being charged by your current lender. The loan will be transferred from the current lender to another lender in this case.
You can avail of this loan if you already own a property but wish to buy a new one. A bridged loan amount is suitable for the short term until you find a new buyer for your old home.
The loan amount will be repaid when you sell your old house.
You can connect with your bank to understand home loan options. They will help you get the best home loan in India by matching your financial position with your loan goals. They will also help you understand the home loan interest rate in India to choose a home loan option that fits your needs best.