For most Indians, owning a home is a matter of pride or an important achievement in life. While buying a home, you may invariably compare different properties and choose the one that best suits your family’s needs and budgets. Just as it is important to choose the right house for a comfortable living experience, it is critical to choose the right home loan option.
Today, lenders offer different types of home loans to suit the varying needs of the people and each loan type serves specific purposes, has unique features, interest rate, and eligibility criteria. If you are a first-time borrower, knowing the different types of home loans available in the market can help you make an informed borrowing decision.
Home purchase loan
This is the most popular home loan type. As the name suggests, you can avail of a home purchase loan to buy a new apartment, a ready-to-move flat, a row house, etc from a builder or development authority. You can also use this type of loan to buy an under-construction property or a resale property from a seller.
Home renovation loan
You may want to renovate your home at some point to keep the interior décor looking fresh and appealing. Sometimes you may feel the need to renovate the house and change the damaged floor or leaking roof or fix the cracked walls.
Irrespective of the type of renovation work you want to undertake, it can cost a significant amount. The best way to get the desired funds is to apply for a home renovation loan. It is a much cost-efficient way than applying for a personal loan as you can get the loan at a much lower interest rate.
To ensure that you don’t borrow more than necessary, and keep the EMI affordable, you can use the EMI loan calculator to know the exact EMI payable for the amount you wish to borrow. This will help you make an informed borrowing decision.
You can use the amount for various purposes such as redoing the painting, changing tiles, changing the interior décor theme, etc.
If you want to build a home on your own, you would need a plot or a piece of land on which you can build the home. To buy the plot, you can apply for a plot loan and use the amount to buy a new or resale plot.
NRI home loan
NRI home loan is specially meant for the non-resident Indians who live overseas and want to buy a residential property in India. Today, many lenders in India offer special home loan schemes for the NRIs. The eligibility, and documentation for the NRI home loan is different from the loan for resident Indians. So, if you want to apply for a NRI home loan, make sure that you do your research well about the lender-specific requirements and choose the right financial organisation so that you get the loan approved without any hassles.
Reach home loan
These home loans are for individuals working in the unorganised sector. You can avail this type of loan to buy new or resale property, build your home on a land that you own or allotted by a development authority and for enhancement of your existing property.
Thus, there are different types of home loans available in India. Know your needs and choose the right type of loan for a stress-free borrowing experience.