In India, buying a new home is an important landmark event in one’s life. Being a homeowner not only guarantees you of having a safe space for your family, but also it reflects your financial stability and status. And, with the easy availability of home loans, buying a home has become easier than before; you can easily get the desired funds and accomplish your dream.

However, to ensure that you have the borrowing experience, you must equip yourself with sufficient knowledge about the different types of home loans in India. If you are a first-time loan applicant, knowing the difference about the loan types will help you make an informed borrowing decision.

Plot loan

If you want to build your own house, you must invest in a piece of land on which you can build the home as per your specific needs. However, like buying a home, getting a plot requires a significant investment. And to get the funds, you can apply for a plot loan with any lender of your choice. Generally, the financial organisations offer plot loans for both new and resale plots.

Home purchase loan

As the name suggests, a home purchase loan is specifically meant for buying a new home. You can apply for home loans in Delhi to buy a new row house, an apartment, a bungalow, from a private builder or a government authority. You can also avail this type of to buy a resale property or for construction of a home on the piece of land you own.

Today, with the intense competition among home loan providers, you can easily get this type of loan at a competitive interest rate starting from 6.70% per annum. However, to get the desired amount you must meet the lender’s specific eligibility requirements.

Home renovation loan

Over the years, the home interiors tend to get old and look dull and unappealing. And, you would want to redo the interiors and give your home a fresh look. Home renovation also infuses positive energy in the house.

However, undertaking any renovation project may incur a significant cost. A home renovation loan can help you with the funds you need. You can borrow funds for any purpose you want such as changing tiles, redoing the plumbing and electrical works, painting, fixing the roof repairs, etc.

Getting a home renovation loan is a better choice than getting a personal loan as you can get the funds at a lower interest rate.

Home extension loan

This is another type of home loan that may come in handy if you want to extend your existing home or add a new room or floor. As your family grows, you may need a bigger home and instead of buying a new home, which would be expensive, you can extend the home. Such loans can help you fund the cost of building a new bedroom, extending the kitchen or adding a new floor.

Reach home loan

Reach home loan is specifically meant for individuals who work in the unorganised sector. And, just like the standard home loan, you can use this type of loan to purchase a new ready-to-move or an under-construction property at any location of your choice.

Final Word

Now that you are aware of the different types of home loan options available in India, assess your specific needs and apply for the right loan type to get the best borrowing experience.