Different Types of Loans for Your Home

01 Feb 2021

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Different Types of Loans for Your Home

With property rates rising with each passing year, it is almost impossible to buy one from your savings. Thankfully, you do not need to worry about exhausting all your savings to become a property owner. You can get the necessary funds with the help of a Home Loan. You can also get a loan for construction or land purchase. Each type of loan is designed to help fulfil a specific objective. You can choose the type of Home Loan that best serves your needs. Let us take a look at the different kinds of Home Loans provided by banks in India.

A Standard Home Loan

The Standard or Basic Home Loan is the most common type of House Loan. You can take this type of loan to purchase residential property, which could be brand new, under-construction, or even a pre-owned.

A Home Construction Loan

If you do not want to buy an existing property but instead build a house on a piece of land you own, you can also opt for a Home Construction Loan. In this type of loan, the bank disburses the loan amount in instalments based on how the construction progresses. You have to provide an estimate of the amount of money you need at every stage of construction.

Land or Plot Loan

Just as you can buy an already existing property with a Standard Home Loan, so can you buy a piece of land. This type of Home Loan is known as the Land or Plot Loan. To be eligible for this loan, you must ensure that the property documents like ownership, a title deed, etc., are clear as the bank is not responsible for checking the same. Further you are also required to construct residential house within 3 years. More on that below!

Home Improvement and Extension Loan

If you want to remodel your existing property, you need to apply for a Home Improvement Loan. You can apply for this loan if you wish to paint your home, fix a leaky ceiling and hanging wires, or give your property a face-lift. A Home Extension Loan enables you to enlarge your home's size by adding rooms, extending floors, etc.

Top-Up Home Loan

The Top-Up Home Loan is one where you can get more finance on your existing Home Loan for any purpose. For instance, you may want to construct a property while still repaying your Home Loan or remodel your house while still repaying your Standard Home Loan or you need fund for marriage of your daugher. To be eligible for a Top-Up Home loan, you should ensure that you've repaid all your EMIs on time.

Pre-Approved Home Loan

Bank of Baroda offers a special type of Home Loan known as the pre-approved Home Loan, wherein you can apply for the loan first and then start looking for a property based on the loan amount you are eligible for. The bank determines your eligibility based on your income and repayment capacity. This type of loan allows you to choose a property that suits your eligibility.

PMAY Loan

Banks in India (in partnership with the government) offer home loans at subsidised interest rates. Members of economically weaker sections, light, and medium-income groups are eligible for such a loan. This loan is known as the Pradhan Mantri Awas Yojana or PMAY loan, wherein qualified applicants can become owners of 'pucca' houses in urban and rural India. Family should not have any other residential house other than proposed to be purchased/constructed.

Balance Transfer Home Loan

Do you have an existing Home Loan with a bank or NBFC? Are you paying a high-interest rate on that loan? Now you can transfer your Home Loan to Bank of Baroda under a special type of House Loan – The Balance Transfer Home Loan. Transferring the loan to a bank offering a lower interest rate can reduce your Home Loan's actual cost.

How to Apply For Home Loan Online?

You can apply for different types of home loans online. Bank of Baroda offers standard home loans, top-up, balance transfers, pre-approved or PMAY loans. You need to visit the website to begin the online application process. Fill an online form and provide your personal and income details and the loan amount you need. The bank assesses your eligibility and informs you of the maximum loan amount you can get, as well as the interest rate you will be charged. The online process reduces the need to visit the bank frequently, with documents in tow - ????.

So what are you waiting for? Visit Bank of Baroda to choose the type of Home Loan that suits your needs. Begin the process of becoming a homeowner today!

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  • Sangita Rajaram Magar
    29 September, 2021

    Z p p s lohgaon

Difference Between Credit Card & Debit Card

4 Differences between Credit Card and Debit Card
When you open a bank account, you are provided with a cheque book, a passbook and an ATM-cum-debit card, also known simply as a debit card. After you’ve held your account with the bank for some time, the bank may even offer you a credit card. However, many people are often confused about the difference between debit and credit card and often assume them to be the same. So, we’ve listed the differences to help you understand. Let’s start with understanding the meaning of each card.
What is a debit card?
A debit card is a card that is linked with your savings or current bank account. When you open your bank account, the bank issues a card that you can use at ATMs and PoS terminals to withdraw money or pay for your expenses, respectively. The sums are automatically and instantly debited or deducted from your debit card. Banks provide free debit cards and charge a small annual maintenance fee.
What is a credit card?
A credit card is another type of bank card through which you can borrow money for a bank or financial institution. The issuer provides you with a line of credit, also known as a credit limit. This limit is determined based on your income and can be increased from time to time. The issuer bills you for your credit card expenses, and you need to pay them off by a stipulated date. If you fail to repay the sums borrower on credit, the issuer levies an interest rate on the money borrowed.
Credit card vs debit card
Having explained the meanings of credit and debit cards, let’s find out what is the difference between credit card and debit card. They are as under:

Bill vs account statement

People who have a credit card are sent a bill for the expenses incurred on the card each month. The issuer sends a bill explaining the minimum and total sums due. In the case of debit cards, the account holder can directly access the savings account to see the expenses incurred.


Linking the card


The debit card is linked to your savings account, whereas the credit card is linked to the financial organisation or issuing bank offering the credit facility.



Credit vs spending limit



Typically, credit card companies provide a credit limit, and you cannot borrow sums exceeding the credit limit. In the case of debit cards, banks issue daily cash withdrawal as well as PoS spending limits.




Interest charged




The credit card issuer levies an interest rate if one is unable to repay the amounts borrowed on time. However, in the case of debit cards, money is not borrowed on credit, so no interest is charged.
Apart from the points mentioned above, a significant aspect of difference between debit and credit card is that debit cards are provided free of charge by the bank. In contrast, credit cards may be availed through an application or by invitation only.

Does a Co-Applicant's Income Improve Your Chances of Getting a Higher Home Loan Amount?

Does a Co-Applicant's Income Improve Your Chances of Getting a Higher Home Loan Amount?
A Home Loan is considered a once-in-a-lifetime opportunity for many people. That is why it would help to maximise your potential loan amount. The best to go about is to opt for a joint Home Loan. Let's find out what is a joint Home Loan and how you can improve your chances of getting a higher Home Loan amount.
What is a Joint Home Loan, and What is a Co-Applicant in Home Loans?
A joint Home Loan is one that you can take along with another applicant or a co-applicant. A co-applicant is simply an additional applicant who is just as involved in the underwriting and approval process of the same Home Loan. When you take a loan with a co-applicant, it is deemed as a joint Home Loan.
A co-applicant may be named as the secondary applicant on the joint Home Loan but may share the same loan repayment responsibilities and benefits that go with a Home Loan. Co-applicant may or may not be joint owner of the property. However a joint owner has necessary to be a co applicant even if he / she is not having any income (e.g. In case of house wife). If joint owner is not having any income, then eligible loan amount would be calculated solely on the basis of income of main applicant.
Having a co-applicant on your Home Loan can also increase your chances of getting the loan approved. Furthermore, it also helps you procure a higher loan amount to buy the house of your dreams. However co-applicant must be your close relative.
Benefits of Having a Co-Applicant in Home Loan
Having explained what is a joint Home Loan and the definition of a co-applicant, let's take a look at a few benefits of having a co-applicant on your Home Loan.
The bank considers the income of both applicants
When you apply for a Home Loan, the bank considers various factors that can affect your eligibility. This includes your income, outgoing expenses, credit scores, and so on. While you may be eligible for the loan, you may not get a higher loan amount as the sole applicant. But when you apply for a Home Loan jointly with another applicant, the bank also considers their income. A higher income typically results in a higher loan eligibility amount, enabling you to buy a better property without compromising.
A joint Home Loan reduces your loan burden by half
Another advantage of taking on a joint Home Loan is that your loan burden is reduced considerably. You and your co-applicant can devise a strategy that distributes the loan repayment equally. This way, if either of you is faced with unpredictable circumstances leading to a loss of income, the other can ensure that EMIs are paid on time. Doing this ensures you never default on your EMI payment.
Conclusion: Now that you know what a co-applicant is in a Home Loan, you should consider applying with one. A co-applicant reduces your loan burden and shares financial responsibility.
So are you looking for a Home Loan? Apply now with Bank of Baroda

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