All You Need to Know About Home Loans

5 min 19 Jan 2023

Highlights:

Overview of a Home Loan
Types of Home Loans

Owning a home can be a milestone achievement for many. To facilitate the dream of owning a home, you can consider availing of a housing loan. A Home Loan comes with several benefits such as a competitive interest rate, flexible repayment tenure, and quick disbursal.

Our Guide to the Types of Home Loans in India

1. Home Loans for Property Purchase

Such a type of loan can be borrowed to fund the purchase of a property.

2. Loans for New Construction

Such loans are different from Home Loans, as they are specifically used for constructing a new residential property on an empty plot owned by the borrower.

3. Home Expansion Loans

These loans specifically cater to the costs associated with expanding or enhancing the borrower’s residential property. Typically, a loan like this would cover the costs of constructing new rooms, floors, etc.

 4. Home Loan Balance Transfers

This loan allows borrowers to transfer the balance of their existing Home Loan from their current lender to another, typically to take advantage of low interest rates, better terms, or improved services offered by the new lender.

5. Top-up Loan

Often offered as an extension of a Home Loan or Home Loan Balance Transfer, Top-up Loans offer sizeable funding to borrowers at competitive rates and can be used to address any housing-related expenditure.

6. Refinancing Your Home for a Makeover

Pre-existing Home Loan borrowers who are now looking to relocate might utilise the funds from a home conversion loan to purchase a new residence.

Additional Read: Home Loan Terminologies You Must be Aware Of

Additional Read: Tips on How to Pay Your Home Loan Faster

There are several Home Loan types available for borrowers to choose from so they can address their unique requirements. No matter what the need, borrowers should ensure that they also research the loan terms and evaluate their own financial standing to arrive at a repayment plan that doesn’t strain the finances.

With a CIBIL Score of 750 or above, borrowers have a better chance of qualifying for competitive Home Loan rates. Prospective borrowers should optimise their CIBIL scores and creditworthiness.

*Terms and conditions apply.

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