Different Types Of Home Loans

Home loans are the best option for anybody wishing to buy a home in India. It allows you to purchase a home in monthly payments while also providing tax benefits. Purchasing a house is a significant financial and emotional investment. And besides, owning real estate is an investment that will provide you with high returns in the long term. You must find the best type of house loan with the best offer and interest rates. You should also be aware of some tax benefits on the home loan repayments.

Land purchase, construction, house repair and extension are all possible uses for home loans. The following are the types of property related loans available from Indian banks.

Photo: Different type of home loans

6 Types Of Home Loans:

1. Home Purchase Loan: This is the most common type of loan. It is applied while buying a new flat or house.

2. Home Extension Loan: This loan can be used to extend your present home or apartment such as adding an extra bathroom or another room to accommodate your growing needs.

3. Home construction loan: This is used when you need money to build a new home on an existing plot. This loan is commonly confused with a home purchase loan, although the terms and circumstances of this loan are very different from those of purchase loans.

4. Home conversion loans: This loan is used when you want to relocate to a new home and want more funds. This avoids the need for the previous loan to be repaid.

5. Bridge loans: These are for when you are selling your old house and purchasing a new home. This loan amount allows you to purchase a new home while you wait to sell your old property.

6. Home Improvement Loans: This loan is used when you want to renovate your home. This loan also covers major repairs.

Tax Benefits on Home Loans in India:

A considerable amount of money is required to buy a new home. To reduce the financial load on the ordinary individual, the government offers tax benefits on home loans. Here are a few crucial details regarding them:

Purchase and construction loans are eligible for tax benefits. Such benefits apply to the principal and interest components.

As per the income Tax Act 1961 you can get below tax benefits on the home loan payments.

There are many institutions like banks and NBFC’s that provide home loans. You may avail loan based on the ease of process, EMIs and track record. Lenders compete with one another in a significant way to get customers. The home loan application process is available both online and offline.