Acquiring a dream home is not merely an aspiration but also a significant long-term investment for many individuals. To transform this dream into reality, securing a home loan emerges as the most practical and prudent choices. Home loan facilitates the realization of homeownership goals while safeguarding one’s savings from substantial depletion.
Recognizing prospective homeowners’ diverse needs and financial profiles, several home loan options are made available by banks, Housing Finance Companies (HFCs), and Non-Banking Financial Companies (NBFCs). These offerings allow individuals to finance the purchase of a house, acquire a plot of land, or undertake renovation projects. Some lenders even extend supplementary benefits in the form of home loan balance transfers and top-up facilities to enhance the financial experience of customers.
This blog will provide you with the details regarding the type of loan for house options accessible in India. Keep reading to know more.
Types of Home Loans
There are different types of loan for house available in the market. A few types are mentioned below:
This type of home loan is a financial lifeline, allowing you to buy your dream home. Many lenders offer loans for new homes that typically range between 70% to 90% of the actual property value. This helps borrowers with the flexibility to choose the loan amount as per their needs and requirements.
The interest rate charged under this depends on the credit profile as well as the market conditions. Moreover, you get the flexibility to choose the repayment tenure to manage monthly payments easily and without draining yourself financially.
With time, the need for renovating or improving the interior keeps on rising. Therefore, if you are looking to repair an old property or the interior of your home, applying for a renovation loan for house offers a viable solution.
For a home improvement loan or renovation loan, you must provide the lender with a detailed cost estimate of the intended renovation work. Subsequently, the lender will provide you with the loan amount after verifying the accuracy of the initial estimatessubmitted by you.
This home loan provides home owners the opportunity to renovate their home without immediate financial pressure.
Home construction loan is useful for all those who wish to construct their residential property on a piece of land. The amount of loan sanctioned by the financial institutions will depend on the construction expenses that borrowers will have to bear.
A home extension loan, also known as a loan for house improvement, is a type of loan that is precisely designed to finance the expansion or renovation of your existing home. This type of home loan provides homeowners with the funds they need to make improvements or additions to their homes, such as adding a new room, renovating a kitchen or bathroom, building a garage, or making other upgrades.
Homeowners with an existing home loan can secure a house extension loan from their current lender as an add-on advantage. These house extension loans present a more cost-effective alternative with reduced processing fees. Additionally, lenders have a streamlined application process, ensuring accessibility and expediency for borrowers.
Top-up loan is an excellent financial solution. This loan can be used to meet various requirements, such as home renovations or repairs. One of the most appealing features of a home loan top-up is its flexibility. The lender imposes no end-use restrictions on the borrowed amount. Moreover, this type of loan offers a lower interest rate than traditionalpersonal loans, making it one of the most attractive choices for those looking to secure additional financing without the burden of higher borrowing costs.
To get this loan for house, you must meet the eligibility criteria and have all the documents ready well in advance. The documents required for different loan type differs, but some of the basic ones include:
Turn your Dreams into Reality!
Apart from the types mentioned in this blog, you can explore numerous other home loans, like overdrafts, property loans, etc. But, before committing to any particular loan for house, as a homebuyer, you must do your research and compare the interest rates, flexibility benefits, and repayment options that different lenders offer. Making a well thought out decision based on these factors will help you in choosing the best lender that can help you avail yourself of the loan with ease.
Tata Capital is a leading NBFC that offers home loan solutions as per the borrower’s budget and requirements. You can explore their loan for house options to make your dream of owning a home a reality! Reach out to them today!