Are you looking to buy a new home? A Home Loan is the ideal way to fund such large expenses. It is a form of secured loan taken by individuals to meet housing costs, either for acquiring or constructing a home, extending an existing house’s size or repairing and improving any residential property. In this article, we will be discussing the various types of Home Loans available in India and the eligibility criteria a person needs to fulfill in order to get approved for one. So, let’s get started!
Contents
What is Home Loan?
As the name suggests, a home loan is an amount an individual borrows from a bank or other financial institution, including a housing finance company, to construct their dream house and revitalize the exciting one. The money a loan lender provides at a specific interest rate must be repaid in Equated Monthly Installments (EMI) within a certain period.
Types of Home Loans Providers in India
In India, banks and other financial institutions provide a range of Home loans to fulfill the customers’ specific needs. Some of the most demanding types of home loans offered by the financial market are described below-
Home Loan
This is the most common type of loan purchased by many people. This loan is simple to buy a flat, bungalow, or an apartment from a developer authority. You can also take this loan to buy an under constructed or fully built house.
Home Construction Loan
You can purchase a construction loan when you own a property and want money for further construction.
House Renovation Loan
You can purchase a house renovation loan to revitalize your existing home by painting, roof repair, tile changing, etc. Also, if you’re willing to go for another loan, then you can check on the personal loan app.
Home Extension Loan
As the family grows, bigger accommodation is required to live comfortably with all the members. A home extension loan will be helpful in such a situation.
Plot Loan
You can obtain a plot loan if you plan to purchase a plot to build your own home.
Balance Transfer Loan
Housing Finance Companies provide a special service that enables you to move your current home loan from one lender to another. This process called a Balance Transfer, is typically used to secure loans with lower interest rates, more flexible repayment options, and other advantages.
Eligibility Criteria
To determine your eligibility for a home loan, lenders consider various factors such as your age, credit score, monthly income, and credit history.
Your Age
Age plays a pivotal role in determining whether you are eligible for the loan. It is easier to avail loan at a younger age for a longer duration.
Financial Profile
Your ability to borrow money is affected by your income stability and the revenue you generate. It is important to have a consistent income whether you are a salaried employee or self-employed.
CIBIL
Then comes the CIBIL score. The loan provider analyzes your CIBIL and decides whether you are eligible for it. It is advised to maintain your cibil Between 700 to 900.
Existing Liabilities
Lenders evaluate your existing loans, such as personal and other vehicle loans, to confirm whether you can repay the home loan. If you don’t have any existing liabilities, you can get your loan approved smoothly.
Conclusion
Taking Home Loan is one of the major decisions you take in your life. This is why it is important for you to understand and take advice from your financial advisor before taking the loan. There are multiple types of loans provided to people according to their needs. But to purchase such loans, one must fulfill the eligibility criteria.