4 Types Of Housing Loans In India
January 9, 2018
Home loans are the most favoured method for financing purchase or construction of houses in India. And recognising this trend, many banks and finance institutions offer diversified options in home loans.
Listed below are 4 common types of housing loans available in our country.
Home purchase loans
This is the common variant available in the home loan category. A home purchase loan can be used to buy a new ready-to-move-in unit, an under-construction apartment
/property or a resale home. With a maximum tenure of 20 years, these loans range between 2 lakhs to 200 lakhs depending on the applicant’s income profile and repayment capacity.
Land purchase loans
One cannot avail a home purchase loan for buying a plot for house construction or as a long-term investment and hence, for this purpose, a land loan should be obtained. Land purchase loan is offered for residential plots only and its maximum tenure is 15 years. Also, unlike home loans, land loans are not eligible for tax deduction for payment of interest and principal.
Home construction loans
These loans are best suited for individuals who want to build a house rather than acquiring a ready-to-move-in unit. For applying for a home construction loan, the applicant should make a rough estimate of the construction cost and then apply for a loan for that amount. The loan amount might be sanctioned at one go or in instalments according to the construction progress and loan size.
Home renovation loans
Home renovation loans can be availed for renovating a property that has been constructed already. These can be availed for up to 15 years and can be paid back in EMIs. Home renovation loans can also be availed for bathroom fittings, furniture, etc. apart from major renovation works.
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