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Different Types of Home Loans in India

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 daughter. 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.

• NRI Home Loans

NRIs (Non-Resident Indians), residing out of the country can easily invest in homes through Bank of Baroda’s NRI financing schemes. They come at competitive rates, with a no-fuss documentation process. Home loan is available depending on the repayment capacity of the borrower. The maximum moratorium period is 36 months.

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 home loan 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!