Types of Home Loan Interest Rates in India
When you are planning to buy a home new in the city, you may run out of cash and decide to take a home loan. It will be your dream home where you want to relax and spend some time in complete peace after your retirement. The rising price of property often makes it difficult for people to dream of buying a property. So, as a result of this, they are unable to raise the total amount required to build the house, and they resort to taking home loans. Even if they have money, they may not want to spend the total amount on buying the home. In such a case, getting a home loan will be a wise option. With the help of this, they will be able to repay the money in the form of installments. This way, banks, and other financial institutions provide financial assistance.
According to recent statistics, the demand for a home loan has increased in the past few years. Different loans are available along with the different mode of payment. Banks and other financial institutions have come up with several home loan schemes for the convenience of common people. Different types of loans available are detailed in the following part of the article for the ease of the customers.
There is a misconception that loans are provided only for the purpose of buying a new property. But loans are offered by financial institutions for plenty of reasons.
- Loan for purchasing land
Land or plot loan is common which is offered by most of the banks and financial institutions. In this case, land purchase is a wise decision as home plots are available at affordable rates. With the money, the person can start to build the home on the purchased plot. Several banks offer several percentages when planning to buy land or plot. However, there are financial institutions that lend up to 85% of the cost of the land that the customer can repay through installments.
- Loan for buying a house
Apart from buying land, people also apply for a loan when they are planning to buy a constructed home. It is one of the common loans when people wish to shift to their new home. Here again, different rate of percentage are offered to the customers that depend on more than one factors. The rate of interest in this relation ranges from 9.85% to 12%. The loan is provided upto 85% of the total price of the house.
- Loan for home renovation
For planning to construct a water tank, carry out electrical work or complete some painting work in the house, such loans are offered by the financial institutions. For internal and external repairing of the existing house, such a loan can be availed for repairing the house. The mode of repayment of such loans can be different from other categories of the loan.
- Loan for building houses
There are people who wish to build their own house rather than buying a fully furnished flat or a house. The cost of such loans is comparatively high as the cost of the plot is also included along with other costs required to build to home. When the cost of the plot is also included among the loan money, then the person has to buy the plot within a year of applying for the loan. The total loan amount is either given in cash or given in the form of installments, and different methods are followed by each of the financial institutions.
- Loan to expand your home
For home expansion, a lot of expenses are involved and home expansion loans are provided by financial institutions. After buying the new home, when planning to the kitchen space or shed the balcony area, you can do it with the help of the expansion loan.
- Loan for home conversion
This type of loan is for the one who has already availed home loan. Even after that, it might happen that they wish to buy a new home. In such a case, the existing loan is transferred to the new home loan account with the assistance of the bank or other financial institutes. This type of loans is quite expensive compared to others.
- NRI home loan
This loan has been planned for NRIs who wish to buy a home in India can take advantage of this scheme. The formalities and procedures of opting for loan are a bit different from the normal house loan. The NRI home loan is available from all public and private sector banks to make it convenient for the NRIs.
- Balance transfer loan
Under this kind of loan, it can be transferred to other banks from the existing one. Without withdrawing the loan, it is possible to transfer it to other financial institutions. To avail low rate of interest and other loan facilities, this type of loan transfer is of immense use for the customers.
- Bridged home loan facilities
These are short-term loans designed for the customers who want to sell their present home and wish to buy a new one mostly at the same time. Before buying the new home, they should ensure that they have got a customer for selling their existing home. With this money, they will be able to arrange for their new home along with the loan amount.
For the purpose of buying, renovating or selling your house, different home loans are offered by banks and other financial institutions. With the help of the loan system, it becomes easy for them to build the house, or renovate it according. When opting for home loans, you will notice that different rates of interest are offered by banks.