Know the different types of home loans
With increasing real estate prices in our country, home loans from various lenders, including Saraswat Bank Home Loan, SBI bank, HDFC bank, is the only medium to meet your dream of purchasing a home. To meet the needs of the applicants, Indian lenders now provide distinct types of home loans on offer.
Buying a home is now a benchmark for a settling individual. Purchasing a home is a dream often shared by millions of individuals in the country. However, owing to the ever-increasing real estate prices, this has enhanced the home loan demand across nations. Listed below are the different types of home loans you may consider availing:
Basic home loan
Standard home loan is one of the popular kinds of loan that individuals opt for to meet their dream of owning a home. What is meant by a home loan? It is a kind of home loan options that allows you to borrow proceeds from a lender for purchasing a home or property of your choice. Once you have purchased, you simply can repay this loan to the lender in the form of EMIs that extends up to 30 years. If you mitigate the home loan eligibility criteria, lenders approve nearly up to 75 to 90 percent of the property’s cost in the form of EMI.
Home purchase loan eligibility criteria
If you are looking to avail of a basic home loan should meet the listed general condition to avail of the home loan. Such criteria might differ from one lender to another.
| Particulars | Self-employed individuals | Salaried individuals |
| Age | 18 to 65 years | 18 to 65 years |
| Employment | Minimum 5 years of experience | Minimum 2 years of work experience |
| Credit score | 750 or more | 750 or more |
Documents needed for the home purchase loan include:
Here are some of the common documents you must submit to avail of the basic home loan. However, these requirements may differ from lender to lender.
· Age proof (Class 10-mark sheet, birth certificate etc.)
· Address proof (Passport copy, copy of voter ID or utility bill etc.)
· Identification proof (Aadhaar, PAN card, passport, or voter ID)
· Income proof (ITR details and salary slips)
· Documents of existing loans, if any
· Property documents to be bought
Home construction loan
In case you already own land and look forward to building a home on it, you can avail of a home construction loan. Unlike the regular home loan, where lenders are supposed to make lump sum payments in the form of a down payment, a home construction loan usually is processed in the form of EMIs based on the construction project’s progress. An amount that is approved for a home construction loan usually is based on the approximate construction expense.
Home improvement/extension loan
This is one of the most preferred or opted types of home loans. If you already are the owner of a home but look to add a floor, room or a floor, maybe then a home extension loan can be of great assistance. Likewise, a home renovation loan is also used for the renovation of your existing home.
Home extension/improvement can simply be a lot. Such loans make sure that you can renovate or expand even if you presently hold no adequate funds.
Home loan balance transfer
If you have taken a home loan already and you are repaying it now, you have the choice to switch to distinct lenders. You can do this in cases when you are getting a home loan from another lender at a comparatively lower rate of interest. But before you transfer your home loan, you must consider the actual savings as new home loan lenders may try to compensate for the reduced interest rate offer by charging higher processing fees and other charges.
PMAY (Pradhan Mantri Awas Yojana)
With CLSS (Credit Linked Subsidy Scheme) as per PMAY, first-time home applicants can avail of home loans at a subsidized rate of interest. This permits them to save an equivalent of 2.67 lakh on a home loan. Additional advantages such as extended repayment tenure up to 20 years are available as per this facility. Just the registered banks under this scheme are eligible to provide the PMAY loan. Thus, if you are a first-time homeowner and searching for a suitable lender, do consider the option registered under the PMAY scheme to get the benefits.
Bridge loan
This is one of the types of home loans taken by individuals who look to purchase another property by selling their existing one. This fund assists in meeting your short-term financial needs like a down payment for a new house till the old property is in the selling process. A bridge loan is usually provided at a higher rate of interest with a maximum tenure of up to two years.
Bridge loan eligibility criteria
| Age | 18 to 70 years |
| Customer eligibility | All property owners & co-applicant |
Documents needed for a bridge loan
Listed is a list of required documents for a bridge home loan:
· Address proof (Class 10-mark sheet, birth certificate etc.)
· Age proof (birth certificate, class ten-mark sheet etc.)
· Bank statement showing repayment of the ongoing loan
· Income proof (ITR and salary slip)
· Property linked documents
Bridge loan rate of interest
The table listed below show the rate of interest offered by the leading bridge loan provider:
| Bank | Rate of Interest | Processing charges |
| SBI Bridge loan | First-year – 9.50 per centSecond-year – 10.50 percent | Up to 0.35 percent of loan proceed (minimum Rs 5,000) |
Apply for a home loan through online mode
Now, you have an idea about the distinct types of home loans. It must not be tough for you to choose the one that best suits your needs. Once you select the correct loan type, you can simply look at the reputed lender to apply for the home loan. Top home loan lenders like Saraswat Bank Home, SBI, HDFC, Axis Bank allow you to apply for loan through the online mode. However, before you apply, ensure to check your eligibility as well as the documents needed before applying for the loan to make sure you are eligible for the home loan and have all the required documents. Doing so can make your approval process easier.
