Buying a home, is a major milestone in life. It is a significant investment that requires careful planning and consideration, especially when it comes to financing. While it can be an exciting journey, it can also be a daunting task for many. However, it’s important to know that you don’t always have to break your savings or compromise on your daily expenses to achieve this goal, in fact, one of the most common ways to buy a new home is by obtaining a home loan.

A home loan is an amount of money that you borrow from a financing company, such as a bank or financial institution, in exchange for the house itself serving as collateral. The lender provides you with a substantial sum of money, which is to be paid back over a set period of time, usually ranging from 15 to 30 years. The loan is paid back in regular installments that include both principal and interest payments.

While the concept of home loans may seem straightforward, there are many factors to consider when choosing the right loan for your needs and budget. So, here we are unraveling everything you need to know related to housing loans so that you can make an informed choice.

It’s important to understand the different types of home loans available, each designed to meet the specific needs of borrowers. Hence it is equally important to compare the features and benefits of each type of loan and choose the one that best fits your financial goals and requirements.

• Basic Home Loans: This is most common sort of loan where the buyer borrows money to purchase a property/home of their own choice. The lender may lend 80%-90% cost of property as home loan.
• Home Construction Loan: Home construction loans are used for financing the construction of a new house or apartment. As per the status of the construction status, the loan amount is disbursed in phases.
• House Renovation Loan: House renovation loans are used for financing the cost of renovating or repairing an existing house or apartment. The loan amount can be used for interior and exterior renovations, electrical and plumbing work, painting, and other repairs.
• Home Extension Loan: Home extension loans are used to finance the cost of extending an existing house or apartment. The loan amount can be used for constructing more rooms, balconies, or other extensions.
• Plot Loan: Plot loans are used for purchasing a residential plot of land on which you plan to construct a house or apartment. The loan amount can be used for purchasing the land or plot and financing the cost of construction.
• Balance Transfer Loan: Balance transfer loans are used for transferring an existing home loan to a new lender for better terms or interest rates. This can help borrowers save money on interest payments and reduce their monthly EMI payments.
• Top-up Loan: Top-up loans are used for financing additional expenses on an existing home loan. The loan amount can be used for home renovation, extension, or any other expense related to the house or apartment.
• Composite Home Loan: Composite home loans are a combination of a plot loan and a home construction loan. The loan amount is disbursed in stages, based on the construction progress, and can be used for purchasing the land or plot or for financing the cost of construction.
• Bridged Loan: Bridged loans are used to finance the purchase of a new house or apartment before selling an existing property. The loan amount is repaid once the existing property is sold.
• NRI Loans: NRI loans are designed for non-resident Indians (NRIs) who want to purchase a house or apartment in India.

Overall, taking a home loan in India can be a wise financial decision. It not only helps you fulfill your dream of owning a home but also makes your home-buying journey smoother and more affordable. However, it’s essential to do your research, compare different loan options, and choose the one that suits your needs and financial profile the best. At the end of the day, the goal is to make an informed choice that aligns with your financial goals and helps you achieve your dream of owning a home.