Types of Home Loans

Buying a home is a dream come true for many people. However, it is difficult to purchase a home as the prices are increasing. This is where home loans come into the picture. A home loan offers financial assistance to the borrower in order to help them purchase a house. Many people don’t have the money to buy a home. However, banks lend them financial help with home loans. A home loan is one of the ways many people are buying a house of their dreams.

However, what many don’t know is that there are different types of home loans. Banks offer a home loan for different types of purchases such as a property purchase, house purchase, etc.

Some of them are-

Home Loan

A home loan is a loan offered to purchase a house. It is the most popular type of home loans. A person can borrow a home loan on a fixed rate or a floating rate.

The interest on a home loan on a fixed rate stays the same for the tenure of the loan. However, the interest on a floating rate can go up or down.

Loan for Land Purchase

If a person wants to buy land, then they can get financial assistance with land purchase loans. The loan borrower can construct a house when they have the money.

Loan for House Construction

House construction loan offers financial help for the construction of a home. The price of the land impacts the loan approval. The loan is disbursed in one go or instalments. The rough estimate of the construction expense is calculated for the loan amount.

Loan for House Expansion

If a person wants to construct a balcony or a bedroom, then they can get a house expansion loan. It helps people when they want to construct new rooms in a house.

Loan for House Conversion

A house conversion loan helps people who have a home loan but want to purchase a new home. In such a case, the loan is transferred to the new house. However, a home conversion loan can be expensive.

Loan Transfer

If a bank offers better interest rates and services, then a person can transfer their loan to that bank. Many people transfer their loans to a different bank in order to pay loans at a lower interest rate.

Home loan EMI calculator–

One of the most important factors of a home loan is EMI. A home loan borrower must repay the loan in EMIs. A person should know the amount of EMI they can pay after meeting daily expenses. A home loan EMI calculator can help a person know the EMI they have to pay for the tenure of the loan. The loan amount, the interest rate, and the tenure are calculated to find EMI.

A person needs to look for banks that offer loans on a low interest rate. It can help them repay the loan fast. However, it is important that a person doesn’t fail to repay the loan.